In an effort to rejuvenate its public markets and catalyze growth, the U.K.’s Financial Conduct Authority (FCA) is undertaking a series of reforms — including measures to make it easier for companies to raise capital from retail investors.
The FCA announced it is adopting a number of reforms aimed at lowering the cost of capital for companies and expanding investment opportunities for retail investors.
For instance, it is revising the rules to sharply reduce the need for a prospectus when listed companies raise new capital. Specifically, the threshold for when a prospectus is required for a new offering will be increased from 20% of existing share capital to 75%.
The FCA said this measure will reduce the cost for companies to raise new capital by an estimated £40 million per year.
Additionally, it is reducing barriers to retail investor access to initial public offerings (IPOs) by cutting the delay between the publication of a prospectus and the offering coming to market to three days from six days.
It is also adopting a single disclosure standard for corporate bond prospectuses, intended to make it easier for companies to undertake smaller, more digestible offerings that facilitate retail investment.
Finally, the regulator is enabling new platforms for public bond and equity offerings that aim to make it easier for companies to raise capital with less-demanding disclosure requirements.
“This will work similarly to crowdfunding platforms but for larger deals,” the FCA said.
“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, in a release.
The changes are slated to take effect in January 2026.