Ryan FowlerThe Financial Conduct Authority (FCA) has announced proposals aimed at making it easier for listed companies to issue corporate bonds in smaller sizes, broadening investment opportunities for wealth managers and retail investors.
The regulator is consulting on a single standard for corporate bond prospectuses, covering both large and small bond sizes under £100,000. The move is designed to lower costs and reduce barriers for companies raising capital while ensuring investors receive the necessary information to make informed decisions. The reforms could encourage more companies to issue smaller bonds, offering greater choice for investors and facilitating growth for UK-listed firms.
The FCA is also looking to simplify the process for listed companies issuing additional shares by cutting unnecessary red tape. The regulator believes that these changes will make capital raising more flexible and affordable, particularly for smaller businesses seeking to scale up.
In addition, new public offer platforms will provide an alternative way for companies to secure funding, including from retail investors. These platforms, similar to crowdfunding models, will allow companies to raise capital through authorised firms. The FCA says clear and consistent requirements will help build confidence in these platforms while broadening investor access to new opportunities.
Simon Walls, interim executive director of markets at the FCA, said: “We’re opening the door for corporates to issue bonds in small sizes so that a wider range of investors can invest in them. That’s more funding for companies, more easily, and more choice for investors too.
“We want to make sure investors have the information they need to make informed decisions about risk while removing unnecessary costs and widening access.”
The FCA’s announcement follows its wider efforts to boost UK market competitiveness. Recent reforms include proposals for a new private stock market, PISCES, which would allow shares in private companies to be traded more efficiently. Other initiatives include making it easier for companies to list on UK exchanges, simplifying capital-raising processes, expanding the Digital Securities Sandbox for fintech firms, and developing a framework for regulating cryptoassets.
