The Financial Conduct Authority has opened a consultation on proposed rules for companies seeking to admit securities to a U.K. regulated market or "primary" multilateral trading facility under the new Public Offers and Admissions to Trading Regulations. The Public Offers and Admissions to Trading Regulations, which were published in January, provide a new framework to replace the U.K. Prospectus Regulation. The FCA proposes to create a new Prospectus Rules: Admission to Trading on a Regulated Market sourcebook, removing the Prospectus Regulation Rules sourcebook. The FCA will also add a new chapter to the Market Conduct sourcebook.
The FCA proposes to keep a large degree of consistency between the new and the current U.K. prospectus regime, though proposes some changes, including:
- increasing the threshold for triggering a prospectus for further issuances from 20 percent (of existing fungible securities) to 75 percent;
- supplementing existing minimum content requirements for issuers seeking admission of equity securities to a regulated market to include certain climate-related disclosures, where the issuer has identified climate-related risks as risk factors, or climate-related opportunities as material to the issuer's prospects;
- requiring issuers to disclose whether their debt instruments have been marketed as 'green', 'social' or 'sustainable' or issued under a bond framework or a similar document;
- providing a clear framework to give issuers legal certainty on what information can be deemed to be protected forward looking statements; and
- requiring an MTF admission prospectus for all initial admissions to trading in such markets, and reverse takeovers (with exceptions for existing simplified routes to admission).
The deadline for comments is October 18, 2024. The FCA intends to finalize rules for the regime by the end of H1 2025, however, there would be a transitional period before the rules entered into force. The FCA states that it expects to undertake a follow up consultation later this year in relation to rules on low denomination retail bonds, certain transitional provisions, and minor changes to make the applications process for further issuances of securities more efficient. The FCA is also consulting on the new regime for public offer platforms. The timing of entering into force of the FCA rules will need to coincide with the repeal of the current U.K. Prospectus Regulation and the full commencement of the Public Offer and Admissions to Trading Regulations 2024.
