The FCA welcomes the publication of Mark Austin’s Secondary Capital Raising Review (SCRR) final report on 19 July 2022, which was commissioned by the Government in October 2021.
The final SCRR report[1] recommendations aim to promote the ability of companies to finance their businesses through public capital markets. They provide a valuable and timely contribution to the ongoing market reform agenda and complement the FCA’s ongoing Primary Markets Effectiveness Review[2].
The SCRR report aligns with the FCA’s strategic priority to ensure UK wholesale markets continue to be regarded as one of the leading global markets of choice for issuers, intermediaries and investors by identifying ways to streamline further capital raising by publicly traded companies and promote access for investors.
The Government has previously announced that it will put in place a new framework for the public offer of securities following Lord Hill’s UK Listing Review[3]. This will allow the FCA to determine when prospectuses are required, including for publicly traded companies raising new capital. Many of the SCRR recommendations directly relate to existing prospectus rules and so the FCA will carefully consider them when proposing future changes to that regime, which would be subject to further consultation and cost-benefit analysis.
We also welcome the recommendation accepted by the Pre-Emption Group[4] (PEG) to enhance its governance and provide new guidance on when shareholders are likely to accept companies raising further capital without observing full pre-emption rights. In making these forthcoming changes, PEG – which is an industry body comprised of listed companies, investors and intermediaries – has carefully considered how to balance enabling access to capital for companies with adequate investor protections.
The FCA will continue to work closely with the Government and industry stakeholders in taking forward the relevant recommendations for the FCA as part of the UK Listing Review agenda.