• Companies that are already listed won’t need to publish lengthy prospectuses to issue more shares, in most cases.

• The length of time between a prospectus being issued and an initial public offering (IPO) is being halved, helping companies list more quickly on the stock exchange.

• Companies will be able to issue corporate bonds to retail investors more easily and a new public offer platform (POP) will help smaller growth companies raise cash to scale up.

Simon Walls, executive director of markets at 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.

“Our capital markets are world leading. They’re our economic engine, and we want to keep them roaring in support of sustained growth and prosperity for the whole country.”

The FCA said: “Companies will not be required to publish a prospectus when raising further capital, except in limited circumstances.

“The threshold for when a prospectus is required for a listed company to raise more shares has increased to 75% of existing share capital, up from its current 20% level.

“This will reduce costs for UK companies seeking new funds by an estimated £40 million per year, unlocking more capital for growth and investment.

“IPOs that include the wider public can come to market three days after the publication of their prospectus, replacing the previous 6-day window and removing barriers to retail access.”

On corporate bonds, the FCA said: “The FCA has set out a single disclosure standard for corporate bond prospectuses, covering both large and small bonds. This reduces costs for companies and will make it easier for corporate bonds to be issued in smaller, more investible sizes and support retail investment.

“Corporate bonds offer a valuable investment opportunity for retail investors and can provide later life income, helping people navigate their financial lives.”

On public offer platforms (POPs), the FCA said: “The regulator has set up a new platform for public offers to make it easier for growth companies to get the investment they need and increase opportunities for investors.

“It will enable companies to make larger offers of shares or bonds without a lengthy prospectus, above £5 million.

“Offers will be made available to a broad investor base outside of public markets via an authorised firm. This will work similarly to crowdfunding platforms but for larger deals.”

REACTION:

Susannah Streeter, head of money and markets, Hargreaves Lansdown: “London has struggled to compete with super-star valuations on Wall Street and has been facing an exodus of listed firms leaving for pastures new.

“The City needs a leg-up and the Financial Conduct Authority is attempting to provide support by making it cheaper and easier for companies to raise funding in London. Companies have long bemoaned the difficulties of raising money in a tangle of red tape, which this shake up is designed to cut through.

“These changes in prospectus rules should encourage more companies to raise money on the London market and make the UK more attractive place to list. In addition, it will result in more capital raisings being open to retail investors.

“At Hargreaves Lansdown we know there’s huge demand for participation from long term retail investors but all too often they’ve be cut out. These new rules present a sea change from the regulator, its now time for the funding pipeline to do their bit, opening up more offers to retail investors.

“By revising the rules on the documents companies need to produce before a public offer, it should make it simpler for them to open up secondary capital raising round to retail investors. The threshold rule change for when a prospectus is required for a listed company to raise more shares is considerable.

“It has increased to 75% of existing share capital, up from its current 20% level. The FCA estimate this could reduce costs for UK companies seeking new funds by an estimated £40 million per year, money which can be ploughed back into investing and growing the company.

“The FCA wants to get the IPO pipeline moving again, revitalising what has appeared to be the lethargic nature of the listing process. The length of time between a prospectus being issued and an initial public offering is being halved, to help fast track new listings.

“The new rules will also mean that companies will be able to issue corporate bonds to retail investors more easily, given that they mean that only a single disclosure standard will be needed, reducing costs for companies and enabling bonds to be issued in smaller batches.

“One of the big challenges faced by companies hoping to raise capital was knowing where to look and which levers to pull. The lack of a centralised funding platform made it a much harder slog. So, the establishment of public offer platforms marks a big step of progress.

“Companies will be able to use the platform to offer big chunks of bonds or shares without needing to compile a costly and lengthy prospectus. Crucially, offers will also be available to retail investors via authorised firms. The public are used to the crowdfunding concept so this should help spark the imagination and revitalise interest in investing.

“By fostering a retail investment culture and making UK markets a more attractive place for listings, it will help build a more dynamic and equitable financial ecosystem. It’s still not going to be easy to compete against the might of New York, but with continued collaboration across the industry, these changes should provide more fuel to power an engine of growth and innovation.‘’