CP24/13: New regime for public offer platforms

Read the Consultation Paper 24/13 (PDF)

Why we are consulting

We are consulting on rules to support the new regulated activity of operating a public offer platform.

Firms operating a public offer platform will allow companies to raise capital by offering securities outside a public market to a broad investor base, including retail consumers.

We want to:

• promote efficient and effective capital raising for companies seeking to scale up and grow their businesses
• make sure investors have confidence in this market to take appropriate and informed investment decisions, based on their risk appetite

We are proposing rules that seek to make sure:

• public offer platforms carry out appropriate due diligence on companies
• investors receive the right information

We also outline:

• our proposed approach to liability and redress
• how we intend to apply other cross-cutting requirements to firms that choose to operate a public offer platform

Who this is for

• Companies who are considering making a public offer
• Firms who may consider becoming public offer platform operators (such as crowdfunding operators or corporate finance firms)
• Investors
• Investment advisors
• Law firms advising on public offers
• Accountancy firms
• Other firms or professional bodies involved in public offers
• Trade associations and groups representing any of the above
• Academics and other stakeholders interested in capital markets

Next steps

We welcome comments on our proposals by Friday 18 October 2024.

Complete our online response form or email [email protected].

Background

Our consultation forms part of the wider fundamental reforms to introduce the Public Offers and Admissions to Trading Regulations 2024 (POATRs), made in January 2024, to replace the UK Prospectus Regulation. This follows the Government-commissioned UK Listings Review.

In summer 2023, we published an Engagement Paper asking for feedback on our initial thinking on public offer platforms, as part of a series of papers exploring the new POATR framework.

In December 2023, we published a Summary of Feedback, with Chapter 6 focusing on public offer platforms.

You can read more background on the wider POATR framework in CP24/12, published in parallel to this consultation paper.

At present, a company offering transferable securities to the public can raise capital of up to EUR 8m without needing to publish a prospectus. This allows smaller businesses to raise capital without getting a prospectus approved. Over time, however, this has effectively capped how much capital smaller companies raise while also failing to prevent misconduct such as the offer of ‘mini-bonds’ that were the subject of the Gloster Report.

The new regime for public offer platforms aims to:

• rebalance regulation in a way that promotes effective capital raising
• ensure market integrity
• provide an appropriate degree of consumer protection