FCA introduces new framework for UK wholesale markets

Some of the most important changes include the introduction of the Public Offers and Admissions to Trading Regime (POATRs), which will replace the current UK Prospectus Regulation. Under the new framework, companies will be required to publish a prospectus only when they first admit securities to public markets. For subsequent capital raises, a prospectus will not be mandatory except in specific situations. These measures are designed to provide investors with necessary information while reducing the financial burden on companies raising additional capital. 

Additionally, the FCA is looking for feedback on proposals to establish a new public offer platform. This platform will provide an alternative means for companies to raise capital, including from retail investors, outside traditional public markets. The aim is to facilitate capital raising for smaller firms and ensure investors receive adequate information regarding the terms and risks of investments.

New rules for investment research payments

In another development, the FCA has confirmed new regulations allowing asset managers more flexibility in paying for investment research. The new rules permit the ‘bundling’ of payments for research and trade execution, which is expected to enhance market competition and simplify cross-border research purchases. 

The FCA has conducted extensive consultations during the development of these regulations. Adjustments have been made to ensure the new payment option is practical for different types of firms while protecting consumer interests and preventing the recurrence of past issues. 

The final aspect of the FCA’s announcement involves a consultation on proposed derivatives trading obligations. These are intended to refine the regulation of secondary markets, mitigate systemic risks, and reduce disruptions for firms. 

Regarding these new developments, FCA representatives emphasised that the new package, along with recent reforms to listing rules, aims to reinforce the UK’s position in wholesale markets. They highlighted the importance of balancing investor protection with market efficiency and encouraged ongoing sector engagement to finalise the new regime.