Corporate law update: 18 April - 1 May - Macfarlanes

FCA consults on rolling back rules on connected and unconnected IPO research

The Financial Conduct Authority (FCA) has published Consultation Paper CP26/14, in which it is consulting on changes to its rules regarding connected and unconnected analyst research on an initial public offering (IPO) of equity securities.

The FCA’s current rules were put in place in 2018 as part of an effort to:

address perceived risks of bias arising from the publication of investor research produced by analysts linked to the syndicate banks that provide services to a company in connection with its IPO (connected research); and

improve the availability during an IPO of independent information produced by analysts not connected with syndicate banks (unconnected research).

Connected IPO research cannot be published before the new issuer’s prospectus is published.

Where syndicate banks provide their own research analysts with information so as to produce connected research, they must, at the same time, either provide the same information to a range of unconnected research analysts or hold a joint briefing with the connected and unconnected analysts. (In practice, joint briefings are very rare.)

Connected research cannot be published until at least seven days after that information is provided to the unconnected analysts (or one day after a joint briefing is held).

The FCA has received feedback that these reforms are not working as well in practice as intended, lengthening the UK IPO process without creating an appreciable increase in unconnected research. Indeed, feedback is that the reforms are likely adding friction to the IPO process, resulting in fewer IPOs than hoped for.

As a result, the FCA is proposing to abolish:

the requirement to identify a range of unconnected analysts and share the same information with them as with connected analysts; and

the seven-day waiting period to publish connected research (as well as the one-day period following a joint briefing).

The result of these changes is that it would be possible to publish connected research much earlier in the IPO process.

The FCA is proposing to keep the existing rule that connected research cannot be published before the IPO prospectus, thus preserving the primacy of the prospectus as a source of information for potential investors. However, the FCA is:

proposing to allow connected research to be published at the same time as the IPO prospectus; and

seeking views on whether this restriction is in fact beneficial and whether it should explore any other potential alternatives.

The consultation is open until 29 May 2026.

Read the FCA consultation (CP26/14) on connected and unconnected analyst research on a UK equity IPO (opens PDF)

Expert’s determination of a mathematical formula was final and binding

The Court of Appeal has overturned a decision of the High Court and found that an expert’s determination of the meaning and application of a mathematical formula in a contract was free from manifest error and so was final and binding.

Contracts often provide that the parties can submit disputes over aspects of the contract to an expert to decide. Expert determinations are generally final and binding, unless the determination contains a manifest error.

In WH Holding Ltd v London Stadium LLP (formerly E20 Stadium LLP) [2025] EWHC 140 (Comm), the High Court found that an expert had made two “obvious errors” when interpreting and applying a mathematical formula, finding that the formula could be interpreted in only one way. It therefore declared the expert’s determination invalid.

On appeal, the Court of Appeal overturned this decision. It found that the formula was ambiguous and capable of being interpreted in multiple ways. As a result, although the Court of Appeal might have reached the same interpretation of the formula as the High Court, it was not possible to conclude that the expert had obviously made an error.

The court also considered in some detail the interesting arguments put forward by the parties and, in so doing, set out some useful principles for dealing with expert determination mechanisms.

You can read our colleague’s in-depth piece for more about the Court of Appeal’s decision that an expert did not make a manifest error in interpreting a mathematical formula in a contract.

Access the Court of Appeal’s decision in WH Holding Ltd v London Stadium LLP (formerly E20 Stadium LLP) [2026] EWCA Civ 153 that an expert did not make a manifest error in interpreting a mathematical formula in a contract