The Financial Conduct Authority has set out proposals to make it easier for listed companies to issue smaller corporate bonds for wealth managers and retail investors.
The City watchdog is consulting on a single standard for corporate bond prospectuses, covering both large and small bond sizes. It believes this would reduce costs and barriers for companies raising capital, while providing investors the information they need to make an informed decision.
Simon Walls, interim executive director of markets at the FCA, said: “We’re opening the door for corporates to issue bonds in small sizes so that a wider range of investors can invest in them. That’s more funding for companies, more easily, and more choice for investors too.
“We want to make sure investors have the information they need to make informed decisions about risk while removing unnecessary costs and widening access.”
The FCA said more flexible and cheaper capital raising should help UK listed companies to grow.
In addition, it is also proposing to simplify the requirements that apply to listed companies when they issue further shares. It plans to streamline this process by cutting red tape.
The FCA said having clear and consistent requirements for firms, and setting out what firms need to become authorised, will build confidence in the new platforms and enable firms to access a wider pool of investors.
