On July 15, 2025, the Financial Conduct Authority (FCA) published its Policy Statement PS25/9 setting out the final rules to implement the Public Offers and Admission to Trading Regulations 2024 (POATRs).
These rules, which replace the UK Prospectus Regulation and take effect from January 19, 2026, are designed to simplify capital raising, reduce costs for issuers, enhance market competitiveness, and broaden retail investor participation, while maintaining robust investor protections. They form part of the government’s broader strategy of ensuring that regulation is targeted, proportional and supports growth and competitiveness.
This bulletin summarises the key points relevant to offers of shares and other equity capital markets transactions.
A&O Shearman’s opinion
The FCA has largely maintained its measured stance from earlier consultations and stakeholder engagement regarding changes to the prospectus requirements for securities admitted to trading on a regulated market at IPO. As a result, it has broadly adopted most of the proposals set out in those consultations.
One of the most significant—and potentially contentious—changes is the decision to increase the threshold for requiring a prospectus for further issuances from 20% to 75% of existing share capital. The fact that feedback on this proposal in CP24/12 was split among respondents highlights the level of debate it has generated.
While not all stakeholders will welcome the FCA’s chosen direction, the regulator remains guided by its secondary objectives: promoting growth, reducing costs for issuers, and enhancing the UK’s competitiveness. The FCA recognises that this change will necessitate an adjustment in market practice, particularly with respect to disclosure and investor communications. Ultimately, it remains to be seen how the market will adapt.
Background
The POATRs, introduced by Parliament in January 2024, establish a fresh legal framework to supersede the previous system inherited from the European Union. The new regulations make it an offence to offer securities to the public in the UK unless a relevant exemption is available.
On July 26, 2024, the FCA published Consultation Paper CP24/12, outlining its proposals for a new prospectus regime for companies seeking to admit securities to a UK regulated market (such as the Main Market of the London Stock Exchange) or a primary multilateral trading facility (such as AIM). These proposals were designed to address issues identified in Lord Hill’s Review of the Listing Regime and the Secondary Capital-Raising Review. Subsequently, in January 2025, the FCA released CP25/2, which set out further proposed reforms to the UK prospectus regime and Listing Rules.
A&O Shearman provided legal support to the joint response to both FCA’s consultations by the members of: (i) UK Finance, the collective voice for the banking and finance industry; and (ii) AFME, the voice of Europe's wholesale financial markets. For further details, please see the joint responses here for UK Finance—AFME response to CP24/12 and here for the UK Finance—AFME response to CP25/2.
Key features of the new regime
Structure and location of proposed rules
The FCA’s Prospectus Regulation Rules sourcebook will be replaced by the new Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM). The new PRM sourcebook has detailed content requirements set out as annexes broadly similar to the current UK Prospectus Regulation structure, although with the benefit of an integrated single sourcebook versus separate assimilated regulations.
Scope of exemptions in the new regime
Most existing exemptions from the requirement to publish a prospectus have been transferred to the new UK prospectus regime. Two exemptions are particularly noteworthy:
Secondary capital raising
A fundamental change in the new regime is the significant increase in the threshold at which a prospectus is required for further issuances of equity securities. The threshold has been raised from 20% to 75% of existing share capital, and up to 100% for closed-ended investment funds. This is intended to make secondary capital raising more accessible and cost-effective by removing the need for a full prospectus in such cases.
The FCA has, rightly we believe, chosen not to introduce a new, alternative disclosure document for issuances below this threshold, instead relying on existing obligations under the UK Market Abuse Regulation (MAR) and the Disclosure Guidance and Transparency Rules to ensure that investors continue to receive timely and accurate information. Below the threshold, issuers may also still publish a voluntary prospectus, which can be either simplified or full.
The decision to raise the threshold at which a prospectus is required for further issuances was perhaps inevitable. Whether the FCA was right to move directly to a 75% threshold, rather than increasing it gradually over time remains to be seen. In the meantime, the FCA will monitor capital raisings to identify any unintended consequences. Since access to US investors is often crucial for many offerings, issuers should assess how to preserve their ability to raise capital in the US and ensure ongoing compliance with US securities requirements.
There are two main risks associated with the FCA’s more ambitious approach.
- First, there is a risk that other information published by a company, upon which investors are anticipated to rely, may not be of sufficient quality to support a capital raise.
There are differences between periodic disclosures (such as annual reports), ad hoc disclosures (such as MAR announcements), and prospectus disclosures. For example, working capital statements. In addition, periodic and ad hoc disclosures are prepared for different purposes, at a different point in time and are subject to different liability standards. Even if a company and its directors are comfortable relying on these disclosures, banks and other advisers involved in a capital raise are likely to require additional diligence and assurance.
- Second, the higher threshold creates uncertainty and potentially varying market practices regarding what information ought to be published for capital raises between 20% and 75%.
Both risks could create challenges for company directors, who remain ultimately responsible for the adequacy and quality of disclosures supporting a capital raise. Similar issues have arisen in discussions about the new significant transactions regime, and we note differences in the quality of these disclosures, although these differences may be due to differing circumstances.
Over time, market practice will no doubt adapt to address these risks, as is anticipated by the FCA. For example:
1. There may be changes in how periodic and ad hoc regulatory disclosures are produced, presented, and assured such that, if desired, they may better support a capital raise.
2. The market is over time likely to standardise disclosure, diligence, and assurance practices for larger capital raises that do not require a prospectus.
3. To the extent that directors (or their advisers) are not comfortable with any residual risk, new assurance and insurance products may be developed to address the risk.
It is a fair question whether a lower threshold than 75% would have given other disclosures and market practices more time to evolve. Looking ahead, we may become less concerned about the specific format in which information is presented—whether in an annual report or a prospectus—and instead view information as a collective pool of data, focusing on how it is accessed and analysed, particularly as digital solutions become more prevalent.
Securities offered in connection with a takeover
The final rules clarify that schemes of arrangement are included within the scope of the takeover exemption, by removing the reference to “by means of an exchange offer”. This is particularly relevant for UK takeovers, where schemes of arrangement are a common structure. The FCA will publish a Technical Note in 2025 to provide guidance on the content requirements for exemption documents.
Prospectus content and format
The FCA has largely retained the main content and format requirements for full and simplified prospectuses, making targeted amendments to increase flexibility and clarity. Changes are targeted improvements, including:
- increasing the maximum length of the prospectus summary from seven to ten pages
- permitting greater use of cross-referencing, including in the summary
- removing the requirement for a financial information annex in the summary section, reducing administrative burden.
Following investor feedback, the FCA has retained the requirement for a working capital statement, recognising the importance of liquidity and solvency in a capital raising context. The feedback did identify some frictions associated with current practice and, responding to such frictions, the FCA will consult on changes to existing working capital guidance via a Primary Market Bulletin in the autumn.
In a similar vein, additional guidance will be issued to assist companies with complex financial histories understanding what additional information might be required to be included in a prospectus. Such guidance is likely to refer to the nature, size and timing of the event(s) giving rise to the complex financial history as key factors in determining the additional information required. To facilitate, the guidance will be supported by practical examples.
Streamlining the listing and admission process
The FCA has introduced a more efficient process for listing and admitting securities to trading. Once a class of securities is listed, further issuances of that class will be automatically listed without the need for a separate application. This applies to both new and existing issuers and is intended to reduce regulatory friction and administrative costs.
Issuers will, however, be required to notify the market via a Regulatory Information Service when securities are admitted to trading, providing specified information such as the number of securities and a hyperlink to the prospectus (if published). The deadline for admitting further issuances to trading has been set at 60 days from allotment, with a longer period of 365 days for certain overseas issuers. The FCA has also introduced flexibility for frequent issuers, such as those operating share option schemes, to roll up admissions notifications over a 60-day period.
Climate-related and sustainability disclosures
Reflecting the growing importance of ESG considerations, the FCA has introduced a new climate-related disclosure rule for issuers of equity securities (excluding certain funds and shell companies). Where climate-related risks are identified as material, issuers will be required to include disclosures aligned with the recommendations of the Task Force on Climate-related Financial Disclosures and the International Sustainability Standards Board.
We expect practice to evolve such that prospectus disclosures are consistent with disclosures required or desired in other contexts, for example in annual reporting or transition financing reporting, and internationally aligned and interoperable.
Protected forward-looking statements
A significant innovation in the new regime is the introduction of a protected forward-looking statements (PFLS) regime. Historically, liability concerns have discouraged issuers from including forward-looking information in prospectuses. The new rules introduce a distinct liability standard for PFLS, applying a recklessness or dishonesty test (with the burden of proof on the claimant), rather than the existing negligence standard. This is intended to encourage more meaningful disclosure of forecasts, projections, and strategic plans.
To qualify as a PFLS, a statement must:
- relate to future events or circumstances
- be clearly identified as forward-looking
- be accompanied by a general and content-specific statement explaining the nature of the information and the principal assumptions on which it is based.
The FCA has set out detailed criteria for financial and operational information that can be protected and has excluded certain mandatory disclosures (such as working capital statements) from the PFLS regime to maintain investor protections. Further guidance will be issued on the preparation of PFLS, including the use of robust methodologies and the presentation of assumptions.
Sponsor regime: adjustments and clarifications
The sponsor regime has been adjusted to reflect the new processes. Issuers must continue to appoint a sponsor when required to submit certain documents to the FCA, including in connection with a prospectus for further issuances. The previous requirement for a private pricing statement has been replaced by enhanced market notification requirements.
Market transparency and notification requirements
The new regime introduces enhanced notification requirements to improve transparency regarding the number of securities admitted to trading and the availability of a prospectus. Issuers are no longer required to disclose reliance on prospectus exemptions in admissions notifications, reducing administrative burden and the risk of duplicative liability.
Implementation and next steps
The FCA’s reforms are intended to make the UK a more attractive venue for capital raising, while maintaining robust standards of investor protection and market integrity. With the new rules taking effect on January 19, 2026, issuers and their advisers should take proactive steps now to ensure they are ready to operate under the new regime.
Looking ahead, the FCA has indicated that during 2025 it will further consult on and issue guidance in several key areas to support the implementation and operation of the new framework. These include:
Financial
- Guidance on the preparation and disclosure of working capital statements
- Updates to guidance for companies with complex financial histories
Sustainability
- Additional guidance on climate-related disclosures
- Revisions to the Technical Note on sustainability-related disclosures, particularly in relation to matters beyond climate, and to address sector- or geography-specific issues
Other
- Guidance on the takeover exemption, to provide clarity on its application under the new regime
- Guidance on PFLS, including the criteria for their preparation and the use of robust methodologies and assumptions
[View source.]
