The Financial Conduct Authority (FCA) released on 31 January 2025 a new consultation Paper “CP25/2”, proposing further changes to the Public Offers and Admissions to Trading Regulations (POATRs) and the UK Listing Rules.
A recent analysis by Barclays questioned the effectiveness of previous FCA’s initiatives to enhance retail investor access to corporate bonds.
Read more: https://www.fi-desk.com/barclays-study-challenges-fca-proposals-on-retail-access-to-corporate-bonds/
The FCA’s CP25/2 new consultation paper outlines several key proposals. As regards the disclosure requirements for low-denomination bonds, the FCA proposes aligning the disclosure requirements for bonds with denominations below £100,000 with those for higher denominations. This change aims to simplify the capital-raising process for issuers and make investment opportunities more accessible to a broader range of investors. To streamline the listing application process, the consultation seeks to address inefficiencies in the listing application process for further issuances of securities. The proposed changes are designed to make the process more efficient for companies, reducing administrative burdens and facilitating quicker access to capital markets. Finally, The FCA suggests removing the requirement to publish listing particulars when seeking admission of certain securities to a regulated market or listed MTF. This proposal aims to streamline the regulatory framework and reduce the compliance burden on issuers.
The FCA is seeking feedback on these proposals and encourages stakeholders to respond by 14 March 2025. The regulator plans to finalise the rules and publish a policy statement in the summer of 2025.
The Investor Access to Regulated Bonds (IARB), an industry working group sponsored by the London Stock Exchange, welcomed the FCA’s consultation, calling it a “once-in-a-generational shift” toward increasing investor access to bonds. The consultation aligns prospectus requirements for non-equity securities under a single standard, based on current disclosure rules for wholesale bonds, instead of maintaining separate frameworks for lower-denomination issuances. The FCA expects this change to encourage more admissions of low-denomination bonds and widen investment opportunities for retail and wealth investors.
Read more: https://www.fi-desk.com/iarb-welcomes-fca-consultation-on-broadening-access-to-uk-bonds/
IARB, which includes some of the UK’s largest retail and wealth investment firms, has long advocated for these reforms and engaged in significant stakeholder collaboration over the past three years. Stacey Parsons, IARB chair, said, “Change can only be achieved with the modernisation of both regulation and historic market practices. Today’s consultation from the UK Regulator allows exactly that—offering industry stakeholders the opportunity to support a simplified and renewed regime removing complexities and delivering broader investor participation to the largest capital market in the world: Bonds. It is critical we support these changes, alongside the right education and guard rails for investors.”
The FCA’s proposals form part of a wider regulatory effort to enhance capital market access and ensure the UK remains competitive as a global financial centre.
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