The Financial Conduct Authority (FCA) has introduced a set of strategic measures to enhance the UK’s capital markets and strengthen its position in the financial sector.
The British regulator proposed rules to establish the new Public Offers and Admissions to Trading Regime (POATRs), which will replace the current UK Prospectus Regulation.
Under the new framework, companies will be required to continue publishing a prospectus when initially admitting securities to public markets.
However, a prospectus will not be necessary for a company when it raises subsequent capital, except in specific, limited circumstances, said the financial regulator.
The proposals, together with existing obligations, would ensure that investors receive essential information while significantly reducing the costs for companies raising additional capital.
FCA markets and international executive director Sarah Pritchard 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 is also seeking feedback on a new proposal for the operation of public offer platforms.
The platforms are set to provide companies with an alternative means to raise capital outside traditional public markets, including from retail investors.
Their introduction is expected to help smaller companies raise scale-up capital, allowing investors to get adequate information about the key terms and risks associated.
In addition, FCA confirmed that its new regulations provide asset managers with enhanced flexibility in funding investment research.
The new rules allow the bundling of payments for research and trade execution, to improve competition in the market for the benefit of investors.
During the development of the new rules, FCA has engaged in extensive consultations, incorporating significant feedback to refine the conditions for the new payment option.
Furthermore, FCA’s package also includes consultation on proposed changes to the derivatives trading obligations, aimed at enhancing the regulation of secondary markets.
