The Investor Access to Regulated Bonds working group (IARB) has met with the UK’s Financial Conduct Authority (FCA), as the regulator mulls broadening access to the UK bond market.
In a meeting on 16 July, IARB said it welcomed the news that the FCA is considering consulting specifically on the delivery of a lower denominated bonds regime in 2024, supporting the availability of a broader range of products, to all investors.
Additionally, the Association of Corporate Treasurers (ACT) has asked that the next government, as part of a broader effort to enable the market to access diverse sources of capital, to simplify the disclosure requirements in order encourage low denomination bonds to be offered more widely.
FCA CEO Nikhil Rathi, speaking at the ACT Conference in May 2024, said, “In the capital raising space, we also have broad support for facilitating the issuance of low denomination bonds – which would be a new approach to the inherited regime – and will work with treasurers to realise the significant benefits wider participation could bring.
“Wealth managers and those who manage smaller portfolios have also indicated that they would welcome lower denomination bonds and for you these could represent an attractive additional source of demand for UK corporate bonds.”
Stacey Parsons, IARB chair and head of fixed income at PrimaryBid, said, “Today is welcome news to our members. IARB will continue to engage with industry stakeholders and the UK regulator, securing education and understanding of debt capital markets, whilst ensuring the right guardrails are in place for investor access.”
Working in collaboration with government, The London Stock Exchange (LSE), regulators and industry over the last two years, IARB has sought to highlight regulatory and market barriers, within debt capital markets, that have impeded access to bonds.
Founded in July 2022 by Stacey Parsons, Tom Capon and Nick Dilworth, the IARB working group was formed by a small number of industry professionals and practitioners, growing to more than 30 regulated entities today, representing key stakeholders, to include retail and wealth intermediaries.
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