The UK is trying to reinvigorate its moribund public markets by making it easier to list shares and updating new rules. Today, the Financial Conduct Authority (FCA) is announcing final rules that will replace the current prospectus regulation to become a public firm. A consultation has commenced, closing in October.
The new rules are said to “strengthen the UK’s capital markets,” making the marketplace more globally competitive.
The proposed rules will establish a new Public Offers and Admissions to Trading Regime (POATRs). While companies will still need to publish a prospectus to list shares, a prospectus will not be required if the company seeks additional capital—except in certain situations.
The FCA also said it is consulting on new platforms that will offer an alternative path for companies to raise funds outside public markets, including retail investors. These new platforms must support smaller firms in need of capital.
The FCA says it has engaged extensively in developing these rules seeking to make new platforms operationally efficient but also make sure it secures an appropriate degree of protection for consumers.
Sarah Pritchard, Executive Director, Markets and International at the FCA, said the new reforms will strengthen the UKs position in wholesale markets, allowing capital to thrive while protecting investors.
“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 on the final regime. Putting the right information in the hands of investors and removing unnecessary costs will help further bolster the market.”
As there are multiple securities crowdfunding platforms operating in the UK one would anticipate they would participate in the consultation. The FCA itself indicates that crowdfunding platforms may consider becoming a public offer platform (POP) under updated rules.
The consultation explains:
“This new activity will supplement existing regulation, such as existing investment-based crowdfunding that is already regulated. Firms wishing to operate a POP will either need to vary their permissions, or seek authorisation from the FCA.”
As these platforms are already providing this type of service an extension under the new rules makes a lot of sense.
In general, the UK is striving to burnish its solid Fintech industry and boost the UK as a top global financial services market. This also includes digital assets. Policymakers recognize the vital importance of financial services to the UK economy.
