07/08/2025
Introduction
In the UK, the need for a prospectus has changed significantly over the past couple of years, following recommendations made in Lord Hill’s UK Listings Review and the UK Secondary Capital Raising Review. These culminated in the Public Offers and Admissions to Trading Regulations 2024 (“POATRs”) which came into effect on 30 January 2024, establishing a new framework to replace EU prospectus regulation post-Brexit.
Key changes introduced by the POATRs
Under the pre-POATR regime, a public offer of relevant securities in the UK required the publication of a prospectus. The POATRs, however, changed this by prohibiting public offers of relevant securities in the UK - effectively meaning that a prospectus would no longer be required for a public offer unless it fell within a specific exemption. The latter, for the time being, meant that a prospectus would be required in respect of the admission of securities to trading on a regulated market or a primary multilateral trading facility (“MTF”). Most of the POATR regulations, however, are not yet in force.
More new rules: the PRM
On 15th July 2025, the FCA finalised its new ‘Prospectus Rules: Admission to Trading on a Regulated Market sourcebook’ (“PRM”). These rules – which will take effect on 19 January 2026 - deal with prospectuses in the context of admission to trading on a UK regulated market, including when a prospectus is required and what it must contain. Many of the rules remained consistent with the POATRs, such as the required contents of a prospectus which were largely unchanged. The remaining POATR regulations will also come into force on the same date.
Below we’ve summarised key changes affecting when prospectuses need to be produced for ECM issues, rather than changes to the contents of the prospectus.
What do these changes mean for companies, legal counsel – and the humble financial printer?
- A prospectus will continue to be a requirement for IPOs and direct listings on a UK regulated market, such as the Main Market of the London Stock Exchange, or on a primary MTF such as AIM (where it will be called an ‘MTF admission prospectus’)
- A prospectus will no longer required for a public offer of transferable securities which are already admitted to, or are conditional upon their admission to trading on, a regulated market or a primary MTF
- A prospectus will no longer be required for secondary fundraisings such as Rights Issues or Open Offers which comprise less than 75%* of a company’s existing share capital (currently the threshold is 20%). *For closed-ended investment funds, the threshold will now be 100%
- Below the relevant threshold, an issuer will still be allowed to publish a voluntary prospectus – either a full or simplified version - approved by the FCA. And where no prospectus is published, it will be up to the issuer to decide the format and contents of the announcement and/or offer document: these will not be prescribed by FCA rules
- For takeovers, a UK-listed bidder will not be required to publish a prospectus provided the consideration shares represent less than 75% of the bidder’s existing share capital –most takeovers will fall into this category. They will, however, still need to publish other documents such as a Scheme circular; and for offers for greater than 75%, a ‘takeover exempt’ or similar disclosure document, although these are still under review.
Summary
The changes coming into effect in January 2026 are designed to reduce costs and simplify the process for companies seeking to raise new capital, as well as encouraging retail participation in UK equity markets.
While it makes sense for some secondary fundraisings to avoid the time and expense incurred in preparing a prospectus, it does still make sense to retain that most critical document for primary issuance – a key protection not just for investors, but for Boards too. And for Boards who have the option to publish a voluntary prospectus for a secondary fundraising, would the same protection argument not also make sense?
So while the humble prospectus may be down for the count, we wouldn’t be putting our money on a knockout any time soon.
This article is provided by Black&Callow for educational and informational purposes only and is not intended and should not be construed as providing legal advice. E&OE.
