The Financial Conduct Authority (FCA) has announced significant changes to the UK's prospectus regime as part of a broader effort to boost the UK’s capital markets.
New rules aim to slash the amount of paperwork required from listed companies when raising funds.
Under the new proposals, companies will no longer need to produce prospectus documents for secondary share sales unless these exceed 75% of their existing shares, jumping from the previous 20% threshold.
The FCA is also reintroducing the practice of ‘bundling’ payments for research and trade execution, a move intended to provide asset managers with greater flexibility in funding investment research.
This practice had been previously halted and was partly blamed for a decline in research on UK-listed companies over the last decade.
Sarah Pritchard at the FCA, said: “The package we have set out today, alongside our recent reforms to the listing rules, will help to strengthen the UK’s position in wholesale markets.
“We know we need to strike the right balance between protection for investors and allowing capital markets to thrive.”
The changes are part of ongoing regulatory efforts to rejuvenate the UK stock market, which has experienced a decline in listings over the past two years.
A new type of public offer platform is also under consideration, aiming to provide firms with an alternative means of raising capital outside traditional public markets.
Richard Stone, CEO of the Association of Investment Companies (AIC), said the changes were “a victory for common sense” that “will help the UK capital markets get back on their feet again.”