FCA eases fundraising rules to lower costs, promote growth

(Sharecast News) - The UK financial regulator has eased rules for fundraising in an effort to lower costs for companies, increase access to investment opportunities and encourage growth. In a statement on Tuesday, the Financial Conduct Authority said it was taking "bold shifts" to make it easier for UK companies to raise the money they need to grow.

These measures include doing away with (in most cases) lengthy prospectuses for listed companies to issue more shares. The FCA's new rules mean that public companies will only have to publish a prospectus when raising 75% of its existing share capital, up from the current 20% threshold, which is estimated to save UK companies £40m per share.

It is halving the amount of time needed between issuing a prospectus and an initial public offering six days to three days.

Meanwhile, the FCA will also make it easier for companies to issue corporate bonds to retail investors, and launch a new public offer platform to help smaller growth companies raise cash, which it said will work similarly to crowdfunding platforms but for larger deals.

"These bold shifts promote innovation, lower costs, and enable a broader investor base for growing businesses. They are the latest in a programme of reforms shifting the balance from pre-emptive checks to market disclosures," said Simon Walls, the executive director of markets at the FCA.

"Our capital markets are world leading. They're our economic engine, and we want to keep them roaring in support of sustained growth and prosperity for the whole country."