The Financial Conduct Authority (FCA) has announced a package of measures to strengthen the UK’s capital markets and enhance its position as a leading global financial centre.
Key to this initiative are proposed rules for the new Public Offers and Admissions to Trading Regime (POATRs), which will replace the current UK Prospectus Regulation.
Under the new rules, companies will need to publish a prospectus when first admitting securities to public markets, but not for subsequent capital raises except in limited circumstances. This change aims to reduce costs for companies while ensuring investors receive necessary information.
The FCA is also consulting on the creation of public offer platforms, offering an alternative route for companies to raise capital outside public markets, including from retail investors. This is expected to help smaller companies scale up while providing investors with essential disclosures.
In addition, the FCA has confirmed new rules allowing asset managers more flexibility in paying for investment research by permitting the bundling of payments for research and trade execution. These rules are designed to improve competition and benefit investors, and are compatible with international regulations to facilitate cross-border research purchases.
Sarah Pritchard, executive director of markets and international at the FCA, said: “The package we have set out today, alongside our recent reforms to the listing rules, will help to strengthen the UK’s position in wholesale markets. We know we need to strike the right balance between protection for investors and allowing capital markets to thrive.
“With that in mind, we have engaged extensively and broadly in developing the final set of rules to support a thriving investment research market. We are also setting out key reforms to the prospectus regime, and welcome engagement from the sector so that we can get the balance right before deciding the final regime.
“Putting the right information in the hands of investors and removing unnecessary costs will help further bolster the market.”
The FCA’s new measures aim to create a more efficient and competitive market environment, fostering growth and reducing systemic risks.
