London just made its biggest move yet to cut red tape and revive its stock market.
The UK’s new Public Offers and Admissions to Trading Regime came into force today, officially replacing the old EU-inherited framework. The goal is clear: make raising capital faster, cheaper, and less bureaucratic to reverse the trend of declining listings (only nine main market floats last year).
📜 THE KEY CHANGE: 75% IS THE NEW 20% The most significant shift is the threshold for requiring a prospectus.
- Old Rule: Companies needed a costly prospectus if issuing shares equal to 20% of existing capital.
- New Rule: That threshold is raised to 75%.
- The Impact: Secondary capital raises—the lifeblood of growing public companies—can now be executed without months of paperwork. The FCA estimates this will save companies £40 million ($54 million) annually.
🏛️ A “NEW GOLDEN AGE”? Finance Minister Rachel Reeves (in prepared remarks) heralded the reforms as the start of a “new golden age” for the City, aiming to back entrepreneurs while maintaining high standards. However, the launch was overshadowed by geopolitical reality: Reeves pulled out of the event last minute to address President Trump’s “Greenland Tariff” threat, highlighting the macro volatility still hanging over the markets.
⚠️ THE “US SNAG”: While the rules are lighter, the market reality is complex. Legal experts warn that the “Brussels effect” might just be replaced by the “Washington effect.”
- Nicholas Holmes (Partner, Pinsent Masons) notes: “These changes are a major unburdening under UK law, but for larger offerings U.S. liability still applies and no FCA reform changes that.”
- Translation: If you want US institutional money, you likely still need full documentation, rendering the UK relaxation moot for large-cap global deals.
💡 ANALYST TAKEAWAY: This is a massive win for UK Mid-Caps. For domestic issuers raising cash from domestic investors, the speed of execution just doubled. But for the FTSE 100 giants looking for global liquidity, US securities laws remain the de facto global standard. The success of this regime will be measured not by the cost of raising capital, but by whether it actually convinces tech founders that London is open for business again.
👇 ECM Bankers & Lawyers: Will the 75% threshold actually speed up deal flow, or will internal compliance teams keep requiring “prospectus-lite” docs anyway?