UK eases rules for companies to raise funds

UK’s revamped framework for raising capital came into force on Monday, aiming to make it easier and cheaper for listed and private companies to secure funds as it replaces the EU-inherited prospectus regime.

The Public Offers and Admissions to Trading Regime, set out The by UK’s financial regulator last year, removes the requirement for listed companies to publish costly and time‑consuming prospectuses in most cases when raising additional capital.

The reforms are part of a wider package of changes from the Financial Conduct Authority (FCA) intended to boost the appeal of the London Stock Exchange after a prolonged downturn in new share issuance.

Just nine companies floated on the LSE’s main market last year, far below historic levels, according to exchange data.

Under the new rules, companies will only be required to draw up a prospectus if issuing shares equal to 75% of their existing capital, compared with the current 20% threshold. Jonathan Parry, a partner at law firm White & Case, said the move would help streamline fundraising for listed companies and allow them to compete more effectively for deals.

Finance minister Rachel Reeves withdrew from an LSE event on Monday at the last minute to join Prime Minister Keir Starmer at an emergency press conference over President Donald Trump’s plan to implement tariffs until the U.S. is allowed to buy Greenland.

According to pre-released excerpts of her speech, Reeves had been expected to say: “By cutting paperwork and speeding up access to capital, these reforms back the entrepreneurs, innovators and investors who drive our economy – while preserving the high standards and investor protections that make the UK one of the most trusted markets in the world.”

Pointing to the regulatory changes and record highs for the FTSE 100 share index, Reeves had also been due to say that the City of London financial hub is set for a “new golden age.”

The FCA told Reuters it expects the new rules to make a noticeable difference. “We got early feedback from advisors and from investment banks about deals … which couldn’t have been done under the old rules. So we knew pretty quickly that these rules would be effective,” Jamie Bell, head of capital markets, said.

The regulator estimates the reforms will save companies around 40 million pounds ($54 million) a year.

Three lawyers told Reuters that although the reforms were welcome, their impact may be limited because issuers seeking US. investors will still have to meet U.S. standards.

“These changes are a major unburdening under UK law, but for larger offerings U.S. liability still applies and no FCA reform changes that,” Nicholas Holmes, partner at Pinsent Masons, said.

As a result, many fundraisings well below the 75% threshold are still likely to require issuers to produce documents similar to a prospectus, Holmes said.

To encourage greater participation from retail investors in fundraising, the FCA will also push companies to issue corporate bonds in smaller, more investible sizes.

LSE’s Chief Executive Julia Hoggett said: “The FCA’s world‑leading Prospectus Rules will make it easier, faster and more efficient for companies to raise capital and create value in doing so, while opening the door for more retail investors to participate in the growth of exceptional UK companies.”