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Guidance on financial position and prospects procedures

By Anthony Connolly, Risk Advisory Manager

Given that IPOs are an increasingly popular means of generating capital, this article explores applicants’ assessments of their financial position and prospects.

The use of the Initial Public Offering (IPO) vehicle is gaining momentum as a means of generating capital amongst Irish companies, particularly in the property development sector. Applications to the Main Market of the London Stock Exchange (LSE), (Premium and High Growth Segment listings), the Alternative Investment Market (AIM) of the LSE and the ISDX Growth Market of the LSE require the establishment of procedures that allow the directors to assess the financial position and prospects (FPP) of the applicant and its group on an ongoing basis. Irish companies wishing to pursue a dual listing on Euronext Dublin (formerly the Irish Stock Exchange) and the LSE are therefore subject to FPP requirements.

FPP impacts a number of stakeholders in the IPO process and is currently a hot topic with the UK regulator. The Financial Conduct Authority (FCA) issued a technical note in August 2017 (August 2017/ UKLA/TN/708.3) setting out the sponsor’s obligations in relation to FPP. Responsibility for the development and maintenance of FPP procedures rests with the applicant directors. This article will explore FPP from a company perspective, focusing in particular on directors’ obligations with regard to FPP requirements, and highlight points for consideration in order to carry out those obligations as efficiently and effectively as possible.


This article first appeared in Accountancy Ireland August 2018.

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