FCA reviews effectiveness of UK primary capital markets

14 Feb 2017 03:51 PM

The Financial Conduct Authority (FCA) has yesterday published a Discussion Paper which seeks feedback on how the UK primary capital markets can most effectively meet the needs of issuers and investors.

The UK’s primary capital markets support the wider economy by bringing together investors seeking investment opportunities, and issuers wanting to access capital to finance their businesses.

The FCA is interested in views on:

• Whether the current boundary between the standard and premium listing categories is appropriate, particularly in relation to overseas issuers and exchange traded funds, and looking more broadly at the role that standard listing plays in practice.
• The effectiveness of UK primary equity markets in providing capital for growth, particularly for early stage science and technology companies.
• Whether there is a role for a UK primary debt multilateral trading facility, and its potential structure.
• Measures that could be introduced to support greater retail participation in debt markets.

The FCA has also launched a consultation on proposed technical enhancements to the Listing Rules. This considers improvements to FCA rules and guidance to ensure the Listing Rules continue to service the needs of issuers and investors.

The proposed changes include:

• Clarifying the eligibility requirements for premium listing.
• Introducing a concessionary route to premium listing for property companies.
• Updating how premium listed issuers may classify transactions and changing our requirements on when they should consult with us.
• Changing our approach to the suspension of listing for reverse takeovers.

Andrew Bailey, FCA Chief Executive, said:

“The FCA has an overarching strategic objective of ensuring markets function well, and a key part of that is ensuring the UK’s primary markets remain effective.

“This review considers some important questions about the primary markets, and some potential enhancements, to ensure they continue to meet the needs of investors and issuers effectively.”   

Today’s publications are part of the FCA’s wider work on the efficiency and effectiveness of UK primary markets to ensure they meet the needs of issuers and investors, as set out in the 2016/17 Business Plan.

The FCA will also consult shortly on how to improve the information available in the UK initial public offering (IPO) process, following a Discussion Paper on this issue which was published in April 2016.

Notes to editors

1. DP17/2: Review of the Effectiveness of Primary Markets: The UK Primary Markets Landscape (PDF)
2. CP17/4: Review of the Effectiveness of Primary Markets: Enhancements to the Listing Regime (PDF)
3. DP16/3: Availability of information in the UK Equity IPO process (PDF)
4. The FCA 2016/17 Business Plan contained an overall outcome to achieve 'an increase in the efficiency and effectiveness of primary markets to ensure they meet the needs of issuers and investors.'
5. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
7. Find out more information about the FCA.