UK FCA findings on market soundings in UK equity capital markets

The UK Financial Conduct Authority (FCA) has published findings from its multi‑firm review examining the impact of market soundings on market quality in UK equity capital market (ECM) transactions. The review analysed data from 63 UK equity and equity linked transactions conducted by five wholesale banks between January 2023 and June 2025. The FCA found that trading volumes fell by an average of 13% during market sounding periods but did not observe material impacts on other market quality metrics, including effective and quoted spreads and market depth. On average, 33 investors were market sounded per transaction, with one instance approaching nearly 90 recipients; however, transactions that sounded above average numbers of recipients did not meaningfully increase overall demand or oversubscription after launch.

While the FCA does not prescribe limits on the number of market sounding recipients, it notes that the risk of inside information leakage may increase as the scale or duration of a market sounding grows and suggests firms consider whether their policies and procedures adequately reflect this. The FCA will continue to engage with banks and other market participants through supervisory work. In addition, the FCA sought feedback on Article 11 of the UK Market Abuse Regulation (MAR) with some banks suggesting improvements, including closer alignment with the EU market soundings regime and reduced record keeping requirements. The FCA will consider this feedback when assessing any future changes to UK MAR.

Return to main website.