We welcome today's publication by the FCA of the final version of its new prospectus rules, which will replace the existing UK prospectus regime, and expect that the new rules, when implemented, will increase the speed and efficiency with which listed companies can execute larger fundraises. It is hoped they will provide a much-needed boost to the UK's capital markets and to London's global competitiveness as a listing venue as well as enabling companies to be more competitive in M&A processes. These new rules support London's ambition to be the "go to" European capital market.
The new Prospectus Rules: Admissions to Trading on a Regulated Market sourcebook will take effect on 19 January 2026, allowing for a six-month familiarisation period. These changes have been a long time coming: what do you really need to know? We set out our key takeaways below.
IPOs – business as usual
Although the framework of the new public offers and admission to trading regime will be different going forward, it is important to note that the process of transacting IPOs on the main market will be unchanged: an FCA-approved prospectus (including a registration document) will still be required.
Secondary fundraisings – threshold for prospectus raised to 75%
By contrast, the landscape for secondary fundraisings will look very different. The current limit on issuing over 20% of a company's issued share capital in a 12-month period, beyond which a prospectus is required, will be raised to 75%. This is significantly higher than the EU threshold, which has been raised to 30%, giving London a meaningful competitive advantage. Unless there are specific marketing requirements or a company is in a rescue situation, an open offer or rights issue by a main market company will not trigger a prospectus provided the shares being issued are under 75% of the issued share capital. A general meeting and circular may still be required if a company will exceed its existing allotment authority.
For transactions marketed in certain overseas jurisdictions, particularly the United States, there are likely to be occasions when an offer document will need to be produced to satisfy customary disclosure requirements and market expectations even in circumstances when a prospectus would not otherwise be required under the new rules. For example, companies with a significant US shareholder base or US investor demand may find it necessary to produce a voluntary prospectus or similar offer document in order to accommodate large US institutional investors in secondary fundraisings. We expect that market practice will vary while the market adjusts to the new rules, and the decision whether or not to produce a voluntary prospectus or offer document will depend on a number of factors, including the type of issuer, the investment banks involved, the size and nature of the transaction and level of US demand.
New liability regime for "protected forward-looking statements"
Issuers will be encouraged to disclose forward-looking statements in prospectuses to assist investors to make better informed investment decisions. A reduced civil liability regime will apply to protected forward-looking statements and the FCA will issue additional guidance on this new concept later in the year.
More flexible regime for companies with a complex financial history
Where an issuer has a complex financial history (that is, it has made one or more acquisitions during the period covered by the financial information contained in a prospectus), the FCA has announced that it will carry out an additional consultation later this year with a view to providing more comprehensive guidance on the treatment of such companies. In response to feedback, this guidance will also contain additional examples of the FCA's approach to this issue.
Greater scope for involvement by retail investors
The effect of the changes is that the current threshold of EUR 8 million, which effectively acted as a cap on retail offers without a prospectus, no longer applies to offers by main market and AIM companies. The period for which a prospectus must be made public before shares can be admitted to trading in an IPO has been reduced from six working days to three: another welcome change to encourage retail participation.
Impact on AIM
An "MTF admission prospectus" will be required for all AIM IPOs (even if there is no fundraising) and reverse takeovers undertaken by AIM companies, subject to exemptions for admissions of new classes of securities and admissions resulting from the imposition of a new holding company. The LSE will have discretion to set rules governing the content of such documents, but we envisage that this will look similar to the current AIM admission document, the contents of which is based on the existing prospectus rules. The AIM Rules will also determine whether and when a prospectus will be needed for a secondary fundraising. Although this was not addressed in their recent discussion paper, we expect the LSE to comment on this soon.
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