The FCA has introduced proposals to simplify corporate bond issuance, making it easier for wealth managers and retail investors to invest in listed companies.

The FCA is consulting on a unified standard for corporate bond prospectuses, covering both large and small bond sizes (below £100,000). This move aims to lower costs and reduce barriers for companies raising capital while ensuring investors receive the necessary information to make informed decisions.

By encouraging listed companies to issue smaller bond sizes, the FCA seeks to expand investment opportunities for wealth managers and retail investors. Streamlining capital-raising processes will support UK businesses in their growth and enhance market accessibility.

Additionally, the FCA is proposing to simplify requirements for listed companies issuing additional securities. This includes reducing administrative burdens and cutting unnecessary regulatory steps to make fundraising more efficient.

New public offer platforms will provide an alternative avenue for companies to raise capital, including from retail investors, facilitating scale-up funding for smaller businesses. These platforms, operated by authorised firms, will function similarly to crowdfunding services, offering clear and consistent regulatory standards to build investor confidence and attract a broader range of participants.

Simon Walls, Interim Executive Director of Markets at the FCA, commented:

“We’re making it easier for companies to issue smaller bonds, allowing a wider range of investors to participate. This means more accessible funding for businesses and greater investment choices for individuals. Our goal is to ensure investors have the right information to assess risk while removing unnecessary costs and broadening market access.”

The FCA recently outlined plans for a new private stock market, PISCES, where shares in private companies can be traded. This initiative is part of broader efforts to enhance the UK’s financial markets, including:

• Expanding listing opportunities for a wider range of companies.
• Simplifying and reducing costs for capital-raising in the UK.
• Giving asset managers greater flexibility in funding investment research.
• Launching the Digital Securities Sandbox to test emerging financial technologies.
• Establishing a framework for regulating cryptoassets.

These reforms reflect the FCA’s commitment to fostering a more competitive and dynamic financial landscape in the UK.