Reed Smith Client Alerts

The UK government has published a near-final form set of draft regulations that will replace the current EU-derived regime governing public offers of securities and admissions to capital markets in the UK. The draft regulations have also been accompanied by two further engagement papers issued by the Financial Conduct Authority (FCA) on specific aspects of the new regime. The first of these contains the FCA’s initial thoughts on the regulation of offers of securities on crowdfunding platforms, the operation of which will become an FCA-regulated activity. The second discusses when a company seeking admission of its securities to AIM or another UK multilateral trading facility (MTF) should be required to publish a form of prospectus, and related matters. These engagement papers follow on from the FCA’s engagement papers on other aspects of the new regime published earlier this year, as discussed in our previous article on this topic.

Autores: Delphine Currie James F. Wilkinson Edmund Tyler

Draft Public Offers of Securities and Admissions to Trading Regulations

As outlined in our previous article on this topic, once in effect, the regulations will create a new framework consisting of a general prohibition on offering transferable securities to the public in the UK, subject to specific exemptions. The scope of the new regime will also extend to certain non-transferable debt securities such as mini-bonds. Key exemptions that are currently available will continue to apply, such as those for offers to qualified investors and fewer than 150 other persons, and offers to directors and employees, among others. There will also be new exemptions, including for pro rata offers to existing shareholders and offers made on FCA-regulated crowdfunding platforms (with the FCA determining the regulatory requirements for offerings on these platforms). The latest draft of the regulations envisages that offers of securities to raise £5 million or less (in any period of 12 months) would also be exempt. Offers to raise larger amounts would need to fall within another exemption or be made on an FCA-regulated crowdfunding platform. Although the £5 million threshold is less than the current EU-derived threshold of €8 million, overall, the new UK regime is expected to offer more flexibility for private companies seeking to raise equity finance and for quoted companies making secondary offerings (discussed in our previous article). Offers that would otherwise be exempt will still need to comply with an equality of information requirement, unless they are below a £1 million threshold.

The government welcomes any technical comments on the draft regulations by 21 August 2023, with a view to finalising them before the end of the year. However, the legislation will not come fully into effect until the FCA has consulted on, and brought into force, its own rules for the new regime.