The Financial Conduct Authority (FCA) has revealed a suite of changes that aim to lower the costs for London-listed companies raising growth capital.

The capital markets reforms will see rules stripped back to make it easier for firms to raise the money they need to grow.

The regulator stated that the changes would lower costs for companies and broaden access to investment opportunities for consumers.

As part of the reforms, companies that are already listed will not need to publish prospectuses to issue more shares, except in limited circumstances.

The threshold for a prospectus requirement has increased to 75 per cent of existing share capital, up from 20 per cent.

Additionally, the length of time between a prospectus being issued and an initial public offering (IPO) is being halved from six days to three, to help firms list more quickly on the stock exchange.

Firms will also be able to issue corporate bonds to retail investors more easily and a new public offer platform will be established to help smaller growth companies raise the capital needed to scale up.

The FCA set out a single disclosure standard for corporate bond prospectuses, covering both large and small bonds.

The regulator also set up a new platform for public offers to make it easier for growth companies to get investment and increase opportunities for investors.

This will enable companies to make larger offers of shares or bonds without a lengthy prospectus, above £5m, and offers will be made to a broad investor base outside of public markets via an authorised firm.

“These bold shifts promote innovation, lower costs, and enable a broader investor base for growing businesses,” commented FCA executive director of markets, Simon Walls.

“They are the latest in a programme of reforms shifting the balance from pre-emptive checks to market disclosures.

“Our capital markets are world leading. They're our economic engine, and we want to keep them roaring in support of sustained growth and prosperity for the whole country.”

Association of Investment Companies chief executive, Richard Stone, added: “We’re very pleased that the FCA has taken our feedback on board and removed an unnecessary barrier to investment companies raising more capital.

"Investment companies invest billions into UK-listed companies, private companies, infrastructure, renewable energy and other UK assets. Existing investment companies have raised £52bn over the past 10 years.

"The FCA’s recognition of our sector will make it easier and more cost-effective for investment companies to raise additional capital and further support UK growth.”

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