UK Prospectus Regime: a consultation

Lord Hill’s UK Listings Review proposed reforms to the UK listing regime with the aim of attracting the most innovative and successful firms and helping companies access the finance they need to grow.

This consultation takes forward three of his recommendations, including that the government carry out a fundamental review of the UK’s prospectus regime. In doing so, it seeks to achieve four key objectives:

• to facilitate wider participation in the ownership of public companies;
• to improve the efficiency of public capital raising by simplifying regulation and removing the duplications that currently exist in the UK prospectus regime;
• to improve the quality of information that investors receive;
• to improve the agility of regulation in this area.

This consultation first considers what the fundamental purpose of a prospectus is, suggesting that a prospectus should be a device to provide potential investors with the information that they need to make reliable investment decisions in a security. It proposes that the two regulatory issues which the Prospectus Regulation deals with – admissions of securities to stock markets and ‘public offer rules’ – are dealt with separately in future. The consultation then proposes that the FCA is granted new powers to make rules, in place of the current Prospectus Regulation.

Additionally, companies on overseas markets and the extent to which they can extend offers into the UK are considered, as well as the interaction of future rules with issuers listed on Multilateral Trading Facilities, and private companies and their existing right to offer securities to the public.