UK financial watchdog rolls out new rules to boost capital markets

By Charlie Conchie

LONDON (Reuters) -Britain’s financial regulator will scrap the need for most listed companies to publish lengthy prospectus documents before issuing new shares as part of its latest efforts to boost the appeal of the country’s public markets.

After consulting with the industry on the plans last year, the Financial Conduct Authority said on Tuesday that companies already listed on London’s markets will only have to draw up a prospectus document if they are raising more than 75% of their existing share capital, up from the existing threshold of 20%.

Prospectuses offer details on companies raising capital and include information on areas like financial records and the size of the offering. Stripping back those rules would make it easier for companies to raise the money they need to grow, the FCA said.

The change is one of several designed to ease the way that companies can raise money after a slump in activity on Britain's public markets in recent years.

“These bold shifts promote innovation, lower costs, and enable a broader investor base for growing businesses,” said Simon Walls, executive director of markets at the FCA, in a statement.

As part of the wider package of reforms, the time between a prospectus being issued and an initial public offering will also be halved to three days in a bid to help companies list more quickly. Firms will be able to issue bonds to retail investors more easily with a single disclosure standard bond prospectus, the FCA said.

The regulator also has set up a new platform for public offers, akin to crowdfunding but for larger deals, whereby companies can make larger offers of shares or bonds without a lengthy prospectus above 5 million pounds, it said.

The changes were confirmed by the regulator ahead of a speech by Britain’s finance minister Rachel Reeves at the Mansion House in London on Tuesday, in which she will task regulators with lowering barriers to businesses seeking to cut their emissions, a government source told Reuters previously.

The FCA’s latest reforms follow a wider package of changes to the listing rules introduced last July, which it described as the biggest shake up in the rules in 30 years.

(Reporting by Charlie Conchie in London. Editing by Anousha Sakoui and Deepa Babington)