The FCA has introduced a comprehensive set of measures aimed at bolstering the UK’s capital markets and enhancing its status as a dynamic global financial hub.

Proposals for New Public Offers and Admissions to Trading Regime

Central to these measures are proposed regulations to establish the new Public Offers and Admissions to Trading Regime (POATRs), set to replace the current UK Prospectus Regulation.

According to the proposals, companies will still need to publish a prospectus when initially admitting securities to public markets. However, for subsequent capital raises, a prospectus will only be required in specific situations.

Alongside existing disclosure requirements, these proposals aim to ensure that investors receive the necessary information while significantly lowering the costs associated with additional capital raises for companies.

The FCA is also seeking feedback on the introduction of a new activity: operating a public offer platform. These platforms will provide companies an alternative route to raise capital outside public markets, including from retail investors. This initiative is expected to facilitate scale-up capital raising for smaller companies while ensuring investors receive appropriate disclosures on key terms and risks.

Final Rules on New Payment Option for Investment Research

The FCA has confirmed new regulations allowing asset managers greater flexibility in paying for investment research by permitting the ‘bundling’ of payments for research and trade execution. These rules aim to enhance market competition to benefit investors. This new payment option is also compatible with international regulations, simplifying cross-border research purchases for asset managers.

In developing these rules, the FCA engaged extensively with stakeholders. Following thorough consideration of consultation responses, significant modifications were made to the conditions for using the new payment option. The FCA aims to ensure that the new rules are operationally efficient, adaptable to various firms, and provide appropriate consumer protection, avoiding a return to past malpractices.

The final component of the package is a consultation on proposals to improve the regulation of secondary markets through derivatives trading obligations, aimed at reducing systemic risk and market disruption.

Sarah Pritchard, executive director of markets and international at the FCA, stated: “The package we have presented today, along with our recent reforms to the listing rules, will strengthen the UK’s position in wholesale markets. We recognize the need to balance investor protection with enabling capital markets to flourish.

“With this in mind, we have engaged widely in developing the final set of rules to support a thriving investment research market. We are also proposing significant reforms to the prospectus regime and invite feedback from the sector to ensure we achieve the right balance before finalizing the regime.

“Providing investors with the right information and eliminating unnecessary costs will further enhance the market.”