Jurisdiction(s):
United Kingdom

Key definition

Equity definition

What does Equity mean? In corporate finance practice, equity means the risk-bearing capital provided by a company’s owners, usually through ordinary shares, as distinct from debt finance. Equity holders have the residual interest in profits and assets: returns are by dividend or capital growth, and they rank behind all creditors on insolvency. Equity commonly carries voting and control rights and is subject to company law capital maintenance and distribution rules (for example, dividends only out of distributable profits and statutory pre-emption on new share issues unless disapplied). It is central to capital structure, M&A, venture capital and private equity transactions. Practitioners also describe certain...

Risk factor disclosure trends in 2019 UK IPO prospectuses and AIM admissions: Prospectus Regulation and ESMA Guidelines, Brexit, categorisation, conciseness, and standard listing risk

Published by a LexisNexis Corporate expert

Practice notes

ARCHIVED: Lexis+® UK Corporate carried out research to assess prevailing market trends in Equity capital markets (ECM) transactions during 2019...

Background and approach

For this review of risk factor disclosure, we examined 38 Prospectuses connected to 2019 Main Market IPOs or new admissions, along with ten AIM admission documents issued in 2019. This work forms part of our annual trend report, designed to offer insight into the current dynamics of UK ECM Activity. The other components of our 2019 trend report are:

IPOs in 2019—Main Market and AIM [Archived]
Secondary Offers in 2019—Main Market and AIM [Archived]
Standard listings in 2019 [Archived]
Legal and regulatory developments in Equity Capital Markets 2019 [Archived]

Prospectus Regulation risk factor disclosure requirements

The Prospectus Regulation (EU) 2017/1129 introduced more detailed and prescriptive standards for risk factor disclosure in prospectuses from 21 July 2019. The central aim of these rules is to enable investors to evaluate all relevant risks and reach an informed decision about purchasing the issuer’s securities. Under Article 7 of the Prospectus Regulation, for an equity prospectus the summary must include no more than 15 risk factors, arranged into two sections...

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Web page updated on 21/05/2026

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