Britain eases rules for companies raising funds

Britain's Public Offers and Admissions to Trading Regime came into force, replacing the EU‑inherited prospectus regime; it raises the prospectus threshold from 20% to 75% of existing capital and aims to reduce costs and paperwork for fundraising.

Britain's revamped framework for raising capital took effect on Monday. The new Public Offers and Admissions to Trading Regime replaces the EU‑inherited prospectus rules for most offers. Regulators say the change is intended to cut paperwork and lower costs for listed and private companies seeking funds. The move follows a period of weak new share issuance on the London Stock Exchange. Key points: - The regime removes the requirement for listed companies to publish prospectuses in most cases when raising additional capital. - The threshold that triggers a prospectus rises from 20% to 75% of a company's existing capital. - The Financial Conduct Authority estimates the reforms could save companies about 40 million pounds a year. - Exchange data show just nine companies floated on the LSE main market last year, below historical levels. - Lawyers cautioned that issuers seeking U.S. investors will still need to meet U.S. standards and may produce documents similar to a prospectus. - The FCA will encourage smaller corporate bond sizes for retail investors and ease liability for forward‑looking information in prospectuses. Summary: The reforms are intended to make it quicker and cheaper for firms to access capital and to support the attractiveness of the London market. Officials say early feedback indicates some deals that were impractical under the old rules could now proceed. Undetermined at this time.