Finance
UK regulator to ease path for retail investors to buy bonds
Published by Global Banking and Finance Review
Posted on January 31, 2025
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Published by Global Banking and Finance Review
Posted on January 31, 2025
LONDON (Reuters) -Britain's financial watchdog laid out plans on Friday to make it easier for retail investors and wealth managers to buy corporate bonds and for companies to raise capital from these smaller investors.
The Financial Conduct Authority is consulting on a single standard for corporate bond prospectuses for all bond sizes, including below 100,000 pounds ($124,150), to cut costs and barriers for companies seeking more capital, the regulator said.
The aim is to encourage listed companies to offer bonds in smaller sizes.
"We're opening the door for corporates to issue bonds in small sizes so that a wider range of investors can invest in them. That's more funding for companies, more easily, and more choice for investors too," said Simon Walls, interim executive director of markets at the FCA.
The regulator said new public offer platforms would lead to alternative routes for companies to raise capital, enabling companies to make larger offers of shares or bonds to a wider investor base, "similar to crowdfunding platforms".
The proposals come as the FCA seeks ways to support the government's drive to pull more levers to kickstart Britain's lacklustre economic growth.
Britain's Finance Minister Rachel Reeves has urged regulators to eliminate barriers to growth by stopping a focus on "excessively" managing risk.
That prompted the FCA chair this month to warn the government that while it was on board with taking greater risks, such an approach would lead to more failures and harm to consumers and businesses.
($1 = 0.8055 pounds)
(Reporting by Yamini Kalia in Bengaluru and Tommy Reggiori Wilkes in London; Editing by Savio D'Souza, Sonia Cheema and Bill Berkrot)