Briefly
The Monetary Conduct Authority (FCA) has revealed a coverage assertion (PS25/9: New guidelines for the general public gives and admissions to buying and selling regime) underneath which it units out the foundations for the brand new regime that can apply in respect of prospectuses. This follows the session course of the FCA undertook through the earlier publication of session papers CP 25/2 and CP 24/12. The Public Presents and Admissions to Buying and selling Rules 2024 (POATRs) will change the UK Prospectus Regulation (UKPR).
The POATRs are usually in keeping with the proposals consulted on, with some modifications to replicate suggestions from market individuals. The brand new guidelines will come into impact on 19 January 2026.
This alert summarises the important thing factors to pay attention to underneath the brand new regime.
Following the introduction of the considerably revised UK Itemizing Guidelines this time final yr, the brand new guidelines for the prospectus regime are equally targeted on lowering the burden on listed corporations, lowering prices, making the UK market extra aggressive internationally and inspiring wider entry to the UK capital markets (particularly by retail buyers).
The FCA will seek the advice of later within the yr on steering to be revealed in technical notes in relation to numerous key areas together with climate-related disclosures, the takeover exemption, working capital statements and guarded forward-looking statements.
It’s encouraging that the FCA has been receptive to suggestions from market individuals and the brand new regime represents one other vital step in direction of bettering the worldwide competitiveness of London as an inventory venue of alternative.
The coverage assertion units out the FCA’s closing guidelines to implement the brand new Public Presents and Admissions to Buying and selling Rules 2024, which can change the UK Prospectus Regulation. The important thing factors to pay attention to will be summarised as follows:
- The edge at which a prospectus is required for an extra issuance of transferable securities might be elevated from 20% to 75% of those self same securities already admitted to buying and selling. That is as anticipated and in keeping with the suggestions of the Secondary Capital Elevating Evaluate. Issuers will retain the flexibility to publish a prospectus on a voluntary foundation which the FCA will evaluate and approve.
- The opposite present exemptions from the requirement to publish a prospectus (in Article 1(5) of the UK Prospectus Regulation) might be carried ahead into the brand new guidelines.
- The prospectus necessities for decrease denomination bonds might be aligned with these for greater denominations by requiring a single set of minimal disclosure content material for prospectus paperwork for non-equity securities – this constitutes a leisure of the necessities for decrease denomination bonds and is meant to encourage (or at the least take away disincentives for) issuers to increase bond choices to retail buyers.
- Different deterrents within the FCA handbook to itemizing low denomination bonds might be eliminated for “non-complex listed company bonds” (primarily bonds listed by an ESCC listed issuer or a completely owned subsidiary which bear curiosity at a hard and fast or floating charge, are unsecured, are usually not convertible or asset backed and are usually not contractually subordinated), although these will now as an alternative be named “plain vanilla listed bonds”.
- The variety of days a prospectus must be publicly obtainable for Preliminary Public Choices (IPOs) might be diminished from six working days to a few working days. This displays the prevalence of on-line entry and is once more supposed to take away disincentives for choices to be prolonged to retail buyers.
- Minor modifications might be made to the prospectus abstract to extend the utmost variety of pages (from 7 to 10), to introduce cross-referencing and to scale back contents necessities (particularly, the annex of monetary info will now not have to be included).
- No change might be made to the requirement for a working capital assertion to be included, though the FCA will later this yr seek the advice of on two proposals to amend present working capital steering through a Main Market Bulletin.
- A definition might be launched for the sorts of statements that might be topic to the legal responsibility regime for protected forward-looking statements (PFLS), which makes use of a recklessness/dishonesty legal responsibility customary with the burden of proof on the claimant (in comparison with the overall regime utilizing a negligence legal responsibility customary with the burden of proof on the defendant). To fall throughout the PFLS legal responsibility regime an announcement will, broadly, want to fulfill the next standards:
- The assertion comprises sure monetary or operational info;
- Whether or not the assertion is unfaithful, deceptive, or omits materials info can solely be decided by reference to occasions or units of circumstances that happen after the assertion has been revealed;
- The assertion contains an estimate as to when the occasion or set of circumstances to which the assertion relates is anticipated to happen; and
- The assertion comprises info {that a} affordable investor can be doubtless to make use of as a part of the premise of their funding selections.
A PFLS will even have to be accompanied by a content-specific accompanying assertion, while the prospectus will even have to comprise a normal accompanying assertion.
- Additional issuances of securities of the identical class as these already listed will now not require an extra itemizing software course of however as an alternative might be handled as mechanically listed when issued, although a market notification might be required (the intention is that it is going to be potential to align these notifications with the entire voting rights notification underneath Disclosure Steerage and Transparency Rule (DTR) 5 and keep away from confusion).
- A brand new climate-related disclosure rule might be launched for sure fairness issuers (those that have recognized climate-related threat components, or the place climate-related alternatives are materials to their prospects), while if a transition plan has been revealed and its contents are materials a abstract ought to be offered in addition to particulars of the plan and the place it could be positioned and inspected. Elective disclosures will even be launched to enhance transparency of sustainability-labelled debt devices. The FCA has sought to align the climate-related disclosures with the Job Pressure on Local weather-related Monetary Disclosures (TCFD) reporting regime and the Worldwide Sustainability Requirements Board (ISSB) requirements (upon which the forthcoming UK Sustainability Reporting Requirements might be based mostly).
- The FCA plans to seek the advice of through Main Market Bulletins later in 2025 on further steering for numerous key areas, together with the takeover exemption, climate-related disclosures, working capital statements and guarded forward-looking statements.
