The UK’s financial markets regulator has announced a series of reforms to reduce the time and costs associated with British firms raising growth capital.
The Financial Conduct Authority (FCA) said its new rules will widen access to investment opportunities for consumers and reduce the burden on companies.
Among the suite of measures announced by the FCA on Tuesday is a stripped back prospectus requirement for listed businesses. Under the current rules, publicly listed companies looking to issue new shares to raise investment must publish a lengthy, detailed prospectus if the amount of shares they are issuing is greater than 20% of existing share capital.
Under the new rules, the threshold for when a prospectus is required for a listed company has increased to 75% of existing share capital, which the FCA estimates will save businesses as much as £40m a year.
Furthermore, the length of time required between the issuing of a prospectus and an IPO has been halved to three days.
“These bold shifts promote innovation, lower costs, and enable a broader investor base for growing businesses. They are the latest in a programme of reforms shifting the balance from pre-emptive checks to market disclosures,” said Simon Walls, executive director of markets at the FCA.
“Our capital markets are world leading. They are our economic engine, and we want to keep them roaring in support of sustained growth and prosperity for the whole country.”
The regulator has also simplified the process of issuing corporate bonds and has set up a new Public Offer Platform (POP) scheme through which companies can make larger offers of shares or bonds without requiring a prospectus.
The reforms follow the launch of the FCA’s PISCES framework, a system allowing private companies to temporarily open access to share sales to institutional investors.
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