The Financial Conduct Authority (FCA) has set out proposals aimed at making it easier for listed companies to issue corporate bonds that wealth managers and retail investors can buy.

The regulator has launched a consultation on a single standard for corporate bond prospectuses, covering both large and small sizes of bonds.

It argued that these proposals would reduce costs and barriers for companies raising capital and provide investors with the information they need to make informed decisions.

The consultation is seeking to encourage companies listed on stock exchanges to offer bonds in smaller sizes, in an effort to provide investment opportunities for wealth managers and retail investors.

Furthermore, the FCA has proposed a simplification of requirements that apply to listed companies when they issue further securities, including streamlining the process by ‘cutting red tape’.

The new public offer platforms will look to offer companies an alternative route to raise capital, including from retail investors, and promote scale-up capital raising for smaller companies.

The FCA said this would enable companies to make larger offers of shares or bonds to a broad investor base outside of public markets through an authorised firm.

As part of its consultation on proposals for firms operating public offer platforms, the regulator sought clear and consistent requirements for firms, and outlined what firms need to become authorised.

“We’re opening the door for corporates to issue bonds in small sizes so that a wider range of investors can invest in them,” commented FCA interim executive director of markets, Simon Walls.

“That’s more funding for companies, more easily, and more choice for investors too.

'We want to make sure investors have the information they need to make informed decisions about risk while removing unnecessary costs and widening access.”

These consultations follow the more comprehensive proposals set out in July 2024, where the FCA consulted on the main proposals for a new prospectus regime, to follow its listing rules reform, to be in place by summer 2025.

---