The Financial Conduct Authority (FCA) has followed up its 2024 consultation (CP24/12) with a consultation paper on further changes to the proposed new UK public offers and admissions to trading regime and UK Listing Rules (CP25/2).

Background

In CP24/12, the FCA set out its proposals for a new prospectus regime for companies seeking to admit securities to a UK regulated market (e.g. the Main Market of the London Stock Exchange) or primary MTF (e.g. AIM).  These proposals, together with the changes to the UK listing regime that the FCA has already implemented through the new UK Listing Rules sourcebook, aim to reduce the costs of listing on UK markets, make capital raising easier on UK markets and remove barriers to retail participation.¹

In CP24/12, the FCA stated that it would consult separately on certain issues and these are now dealt with in CP25/2.² We set out below the main proposals in CP25/2, except insofar as they relate to non-equity securities.  

Listing applications

The FCA is proposing to remove the further issuance listing application process from the UK Listing Rules sourcebook.  Instead, an issuer will only make a single application to list all securities of the relevant class and the FCA will treat further issues by that issuer of the same class as automatically listed when the securities are formally issued.  This will make redundant the "up to" amount wording that is typically included in a prospectus both for the greenshoe shares or, for GDR issuers, the headroom for future conversions into the GDR programme.  

This streamlining complements the proposals in CP24/12 to increase the threshold at which a prospectus is required for a further issue of securities of a class that has already been admitted to trading on a regulated market.

For issuers that already have a listing of securities when the new regime comes into force, a transitional provision will provide that further issuances of the same class will automatically be listed when the securities are issued, without the issuer being required to make a further listing application.  However, special rules will apply to securities based on listing particulars (see below) and to OEICs that are multi-class or umbrella funds.

The FCA will also make various consequential changes to its sourcebooks, as well as streamlining certain features of the listing process for a new applicant.

Listing particulars

Although the UK Listing Rules currently retain requirements for listing particulars in certain circumstances, the FCA considers listing particulars inconsistent with the proposed new UK prospectus regime.   

It is therefore proposing to amend the UK Listing Rules to remove listing particulars (and supplementary listing particulars) as a form of admission document.  Under this proposal, the London Stock Exchange's Professional Securities Market (PSM) would effectively close to new admissions when the new prospectus regime comes into force.  This would not affect securities already listed and admitted to trading on the PSM.

Given the proposals to remove listing particulars (and supplementary listing particulars) as a form of admission document, the general transitional provision in relation to the automatic listing of further issuances of the same class of securities described above would not apply to securities based on listing particulars.  However, as far as GDR issuers are concerned, an issuer with GDRs already admitted to trading on the PSM - predominantly Indian issuers - should be able to conduct a further issue of those securities, provided that the total number of GDRs in issue does not exceed the "up to" amount specified in the approved listing particulars when the issuer's GDRs were first listed.

Timing and transitional provisions

The FCA is aiming to finalise the rules for the new prospectus and admissions to trading regime, and the related changes to the UK Listing Rules, in the summer of 2025, and anticipates that they will come into force in early 2026. 

Under the Public Offers and Admissions to Trading Regulations 2024, the statutory framework which underpins the FCA's rule-making powers for these purposes, any prospectuses or supplementary prospectuses approved by the FCA before the new prospectus and admissions to trading regime comes into force will remain valid for the period provided for in the current UK Prospectus Regulation.  This is typically 12 months from the date of approval.

However, where issuers are in the process of preparing a prospectus when the new rules come into effect and that prospectus has not yet been approved, those issuers would need to seek approval (or exemption) based on the new prospectus regime rules.  

Transitional provisions in the UK Listing Rules will reflect this position for the purpose of applications for listing and complying with other relevant provisions of those rules.

1. For more information on CP24/12 and the background to it, see our earlier briefing here.  For more information on the new UK listing regime, see our earlier briefing here.↩
2. https://www.fca.org.uk/publication/consultation/cp25-2.pdf↩