The FCA has today (26 July 2024) published its consultation on the new Public Offers and Admissions to Trading Regulations regime (POATRs) (available here: CP24-12). This consultation forms part of the FCA's plan to increase the attractiveness of the UK capital markets and follows on from the recent significant changes to the UK Listing Regime announced earlier this month (UK Listing Regime: new UKLR published: key points for premium listed companies). 

This consultation paper sets out the FCA's proposed rules for companies seeking to admit securities to a UK regulated market (e.g. the LSE's main market) or primary multilateral trading facility (e.g. AIM). The proposals seek to:

  • reduce the costs of listing on UK markets;
  • make capital raising easier on UK listed markets; and 
  • remove barriers to retail participation. 

Given current concerns as to the state of the London market, these proposals are welcome. This recent FT article has the detail on AIM Number of Aim-quoted groups drops to 22-year low in blow to London (ft.com).

Relaxation of requirement to produce a prospectus on secondary issues

With regards to when a prospectus may be required, the FCA proposals are that:

  • in relation to secondary issues of securities already admitted to trading on a regulated market, the threshold for triggering a prospectus for secondary issues will be increased from 20% to 75%; and
  • issuers can produce a voluntary prospectus approved by the FCA for secondary issues below this threshold if that's their preferred approach to raising capital.

No requirement for an FCA approved prospectus on an AIM IPO with retail participation

The FCA intends to make a significant change to the regulatory landscape for AIM IPOs which are typically structured as placings with institutional investors with limited retail investor participation. Under the proposals contained in CP24-12, initial public offers to retail investors by a company applying to have its shares admitted to AIM will have the same prospectus requirement as offers to qualified investors. The FCA hopes that this may “encourage Primary MTF issuers to include retail investors in offers by default, thereby leading to wider participation in the ownership of public companies”. 

MTF admission prospectus required for all initial admissions to trading on a primary MTF

Instead an MTF admission prospectus would be produced and that would not require FCA approval. An MTF admission prospectus would be required for all initial admissions to trading on a primary MTF and reverse takeovers (with exceptions for existing simplified routes to admission of those markets).

Secondary issues by AIM Companies: discretion as regards requirement for MTF admission prospectus

In the consultation paper the FCA has proposed that operators of primary MTFs (such as the London Stock Exchange) should have discretion as to whether an MTF admission prospectus is required in the case of secondary issues by companies which already have their securities admitted to trading on a Primary MTF such as AIM. The proposed relaxation for regulated markets (threshold potentially increased from 20% to 75%) may become the threshold for secondary issues by AIM Companies by default.

Consultation deadline

The FCA has asked for comments by 18 October 2024.

Further information

If you would like to discuss this update and the FCA's proposals, please speak to your usual contact at Burges Salmon or Nick Graves, head of the firm's Corporate Department.