CP24/13: New regime for public offer platforms

Read the Consultation Paper 24/13 (PDF)[1]

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[2] 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)[3], made in January 2024, to replace the UK Prospectus Regulation. This follows the Government-commissioned UK Listings Review[4].

In summer 2023, we published an Engagement Paper[5] 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[6], with Chapter 6 focusing on public offer platforms.

You can read more background on the wider POATR framework in CP24/12[7], 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[8].

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