FCA plans fast-track route to raising cash

The Financial Conduct Authority (FCA) Chief Executive, Nikhil Rathi, has introduced a series of reforms aimed at making it simpler for companies to raise capital on the London Stock Exchange (LSE). These changes form part of a broader strategy to enhance the competitiveness of London’s financial markets and align with the UK Chancellor’s pro-growth agenda.

Under the new reforms, companies already listed on the LSE will no longer be required to produce a comprehensive prospectus when seeking additional funding, except in specific circumstances. Previously, businesses were limited to raising 20 per cent of their value without issuing a prospectus, whereas the new rules will allow them to raise up to 75 per cent. This move is expected to reduce costs and speed up funding processes.

“There is a huge growth imperative,” Rathi stated in an interview, emphasising the urgency to support the UK economy and retain London’s appeal in a competitive global market. He highlighted that regulatory barriers are no longer seen as significant deterrents for companies considering listing in London, with factors such as founders’ preferences and growth strategies now playing a more prominent role in decision-making.

The FCA has also begun reviewing its extensive 10,000-page rule book to streamline regulations further. Earlier revisions, including the removal of shareholder voting requirements for certain takeovers, represent the regulator’s ongoing efforts to reduce red tape and facilitate economic growth. Recent changes to capital requirements have already cut the volume of related legal text by 70 per cent.

In addition to easing fundraising rules, the FCA is exploring other methods to improve financial accessibility and confidence among investors. A review of distinctions between regulated “financial advice” and unregulated “financial guidance” is underway, with the aim of providing individuals with clearer pathways to investments. Rathi also expressed a desire for the FCA to play a more prominent role in advancing financial education, enabling people to make more informed monetary decisions.

Discussions around crypto regulation are also progressing as part of the FCA’s growth-focused reforms. Rathi confirmed that final rules for regulating crypto assets are expected within the next 12 months, cautioning that these remain high-risk investments. The FCA remains firm in its stance to safeguard consumers while supporting innovation in this rapidly expanding sector.

These initiatives come as the FCA works to bolster London’s status as a premier financial hub amid declining initial public offerings and increasing global competition. By addressing longstanding regulatory challenges and facilitating market access, the FCA aims to drive meaningful economic growth and strengthen investor confidence.