Financial Conduct Authority Consults on New Public Offer Platform Regime

The Financial Conduct Authority has launched a consultation on proposed rules for a new public offer platform regime, which will allow public offer platforms to facilitate companies making public offers of securities to investors outside public markets when raising more than £5 million. The new regulated activity was created by the Public Offer and Admissions to Trading Regulations 2024, which will replace the current U.K. Prospectus Regulation. This new activity will supplement existing regulation, such as existing investment-based crowd funding that is already regulated. Firms wishing to operate a public offer platform will either need to vary their permissions, or seek authorization from the FCA.

Recognizing that companies offering securities via a public offer platform may have more limited track records and pose risks of information asymmetries, the FCA's proposed rules for firms operating a public offer platform seek to balance two broad aims. First, that investors receive appropriate protections against potential fraudulent offers and receive sufficient information on legitimate securities such that they can have confidence in these markets and can make informed investment decisions on the investments presented to them. Secondly, that companies are able to raise capital efficiently and effectively from a broader investor base according to their needs. As such, the proposals focus on three key areas:

• information gathering and due diligence carried out by public offer platforms on prospective issuers and the securities being offered;
• the specific disclosures provided to investors on an issuer and the security being offered; and
• the application of liability and redress in relation to the content of offers facilitated by public offer platforms. The FCA does not intend to shift investment risk from investors to public offer platform operators, and consumers will remain responsible for their investment decisions and for accepting an appropriate level of risk.

The deadline for comments is October 18, 2024. The FCA intends to finalize rules for the regime by the end of H1 2025. The FCA states that it will communicate further details on its approach to implementation and timing for this new regulated activity, taking into account engagement with the Government on repealing the U.K. Prospectus Regulation and bringing into force of the Public Offer and Admissions to Trading Regulations 2024.

The FCA has also issued a consultation on proposed rules for admission of securities to U.K. trading platforms.

Return to main website.