Harry WellsThe FCA has announced a variety of measures with the aim of strengthening the UK’s capital markets.
1. New public offers and admissions to trading regime
A key aspect of the package includes proposals (CP24/12) to replace existing UK Prospectus Regulation with a new Public Offers and Admissions to Trading Regime (POATRs). This would mean that, whilst companies would still have to publish a prospectus when first admitting securities to public markets, this would not generally be required when raising further capital.
The FCA is consulting further (CP24/13) on the proposed new regime for public offer platforms, aiming to facilitate firms in helping companies make public offers of securities outside a public market to investors, including retail consumers. The proposals aim promote public offer platforms to carry out appropriate due diligence on companies, providing accurate information to investors.
Both consultations close on 18 October 2024.
2. Derivatives trading obligation
The FCA is also consulting on proposals (CP24/14) for three aspects of the derivatives trading obligation (DTO). The proposals cover:
- including specific overnight index swaps based on the US Secured Overnight Financing Rate within the classes of derivatives subject to the DTO;
- expanding the list of post-trade risk reduction services exempted from the DTO; and
- how the FCA aims end to use its power to suspend or modify the DTO once transitional powers under the FSMA (Amendment) (EU Exit) Regulations 2019 expire at the end of this year.
The consultation closes on 30 September 2024.
3. Final rules on new payment optionality for investment research
Finally, following its consultation, the FCA has also confirmed that it will give asset managers more choice in how they pay for investment research. By allowing the ‘bundling’ of payments for research and trade execution, the regulator is seeking to increase market competition and consequently improve investor outcomes.
The changes take effect from 1 August 2024.