The Financial Conduct Authority (FCA) has confirmed a package of reforms intended to reduce the cost and complexity of raising capital in the UK’s public markets.
The changes are part of broader efforts to strengthen London’s appeal as a listing venue.
Under the updated framework, listed companies will, in most cases, no longer be required to publish a full prospectus when issuing additional shares. The time between the publication of a prospectus and an initial public offering (IPO) will also be shortened, allowing companies to complete listings more quickly.
The FCA is also introducing measures to make it easier for companies to issue corporate bonds to retail investors. A single disclosure standard will be adopted to simplify compliance and lower the cost of issuing bonds in smaller volumes. In addition, a new public offer platform will be created to help smaller, growth-stage firms raise capital more efficiently.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the changes are designed to support companies that have found it increasingly difficult to raise capital through UK markets. She noted that London has lost ground to other financial centres in recent years and suggested the reforms aim to address that by lowering regulatory barriers.
Streeter said the revisions to prospectus rules could make the UK a more viable location for listings while also increasing the likelihood of capital raising opportunities being made available to retail investors. She added that there is strong demand among long-term individual investors to participate in such offers but that they are often excluded.
She explained that the new rules represent a shift in approach by the regulator, and that other participants in the capital-raising process would now need to respond by broadening access for retail investors.
The FCA is raising the threshold at which listed companies are required to publish a prospectus when issuing new shares, increasing the limit from 20% to 75% of existing share capital. The regulator estimates that this could lower annual fundraising costs by around £40 million, which companies may be able to reinvest in business development.
According to Streeter, the updated rules could also simplify secondary fundraising processes for listed firms, making it easier to open up capital rounds to retail participation.
She also highlighted the challenge companies often face in identifying funding sources and navigating capital-raising procedures. She said the lack of a centralised platform has historically added complexity and cost. The introduction of public offer platforms could help address this issue by allowing companies to raise capital without producing a full prospectus. These platforms will also make retail participation possible through authorised firms.
Streeter said the crowdfunding model is already familiar to many retail investors, and the platforms could help renew interest in public market investment. While she acknowledged that London still faces strong competition from global centres like New York, she said the new rules could contribute to a more active and accessible investment landscape if industry stakeholders support the changes.
