The New UK Prospectus Rules – Significant Change for UK Capital Markets

Executive Summary

What Is Changing?

On 19 January 2026, a new UK prospectus regime, under the Public Offers and Admissions to Trading Regulations 2024 (the “New Prospectus Rules”) took effect. Published by the Financial Conduct Authority (“FCA”), the new rules will introduce significant, and welcome reforms to UK capital markets. These include increasing the threshold at which a prospectus is required from 20% to 75% of an issuer’s share capital for secondary issuances, a new admission prospectus for listings on the Alternative Investment Market (“AIM”) (and other primary multilateral trading facilities (“MTF”)), the introduction of protected forward-looking statements (“PFLS”) in prospectus-related disclosures and measures to increase retail participation in initial public offerings (“IPOs”).

What Effect Will It Have?

The FCA aims to reduce regulatory burdens to attract investors to UK markets. The reforms should significantly simplify procedures and cut costs. For example, the number of exemptions to publish a prospectus will grow considerably, including for offers to the public where securities are already admitted to trading on a UK-regulated market or primary MTF. For takeovers, an offer document or scheme circular can be used as a takeover exempt document in lieu of a prospectus. Retail participation is also encouraged - for IPOs with a retail element, a prospectus will only need to be available to the public three, rather than six, working days before the end of the offer period, which is intended to make the extension of retail offerings more attractive to issuers through the corresponding reduction in market risk.

There are significant, welcome changes that will reduce the need for prospectuses in a number of key scenarios, in particular for secondary capital raises and takeovers (in respect of securities exchange offers), as well as encourage retail participation. However, it remains to be seen whether there will be pressure from (particularly, overseas) investors and investor bodies for issuers to continue to publish prospectuses voluntarily, and how the New Prospectus Rules will interact with the securities laws of the US and other jurisdictions.

The changes will impact issuers, investors and private capital funds seeking to exit investments, as well as current, and future market activity. Please reach out to the team for any further information and assistance.

Introduction

In line with other measures by successive UK governments to revitalise the UK capital markets¹, the UK Prospectus Regulation will be replaced by the New Prospectus Rules. These new rules aim to increase the attractiveness of the UK market by reducing the regulatory burden and simplifying the process to raise new capital, as well as reducing costs. They also seek to align the UK rules more closely with some recent relaxations in EU prospectus rules in some areas.

The New Prospectus Rules have been prepared following a series of public consultations and consist of the Public Offers and Admissions to Trading Regulations 2024 as well as the Prospectus Rules: Admission to Trading on a Regulated Market (also known as the new FCA sourcebook).

In this article, we explore four key aspects of the new regime that we think are most relevant for clients, being:

• The most significant changes compared to the existing regime
• When a prospectus will be required
• Practical impacts of the New Prospectus Rules
• The new prospectus content requirements

What Are The Most Significant Changes?

The key changes include the following:

• In respect of secondary issuances, the threshold at which a prospectus is required is increased from 20% of existing share capital to 75% (and, for closed-ended investment funds (“CEIFs”), to 100%).
• A new MTF admission prospectus for admission to trading on a primary MTF (including AIM).
• Introduction of PFLS relating to prospectus disclosures with a higher liability standard to encourage more useful and accurate disclosures from issuer companies.
• Additional measures to increase retail participation, including reducing the period on an IPO during which the prospectus must be made available to the public from six working days to three working days.

Prospectus triggers

Under the previous UK prospectus rules, the triggers for a prospectus were (i) an offer to the public of securities and/or (ii) admission to trading on a UK-regulated market.

The trigger under the New Prospectus Rules is an admission to trading on a UK regulated market or a primary MTF. Further, an offer of securities to the public is prohibited unless an exemption applies (i.e. this is no longer a trigger to publish a prospectus). Therefore, there will no longer be an option to proceed with an offering of securities to the public that does not benefit from an exemption by simply publishing a prospectus.

When Is a Prospectus Required Under The New Regime?

The New Prospectus Rules – Offers to the public

The general rule is that offers to the public of securities are prohibited unless an exemption applies.

The list of available exemptions has expanded. While exemptions under the old prospectus rules have largely been retained (including the exemptions for offers made only to qualified investors and offers to fewer than 150 persons in the UK (excluding qualified investors)), additional exemptions have been introduced. Significant new exemptions include:

• offerings of securities that are admitted to trading on a UK-regulated market or primary MTF, effectively creating a much simpler regime in many cases where now only the admissions to trading rules apply (where previously the offers to the public rules also applied);
• offerings in connection with a takeover offer (subject to certain conditions);
• offers to persons already connected to the issuer, such as existing shareholders; and
• offerings made via a regulated public offer platform (“POP”), which is a new type of venue for raising capital that has been introduced by the FCA under separate rules² to dovetail with the New Prospectus Rules.

Other changes

The threshold of the minimum offering size exemption has effectively been reduced from EUR 8,000,000 as now only offers below GBP 5,000,000 are exempt. Offerings in excess of GBP 5,000,000 (that cannot rely on any other exemption) will have to be made via a POP. In addition, the minimum denomination threshold has been reduced from EUR 100,000 to GBP 50,000.

The New Prospectus Rules – Admission to trading

As is the case with offers to the public, prospectuses will be required in largely the same situations under the New Prospectus Rules when an issuer is seeking admission to trading on a UK-regulated market.

The exemptions from article 1(5) of the UK Prospectus Regulation have been retained (including the exemptions for securities arising from conversion and securities offered to employees or directors). However, three key areas of change include the following.

Secondary issuances

The first area is, as highlighted above, the further issuance of securities already admitted to trading. In spite of mixed responses received (including pushback from institutional shareholder bodies) during the public consultations, the threshold at which a prospectus will be required has been increased from 20% of existing share capital to 75%.

This brings the UK closer to the EU position, since the EU Listing Act was reformed in this respect, with the changes taking effect on 4 December 2024. Under the modified EU Listing Act, an 11-page information document is required instead of a prospectus for secondary issuances of any size made by issuers that have been listed for longer than 18 months, and, if an issuer has been listed for less than 18 months, only secondary issuances of more than 30% of existing share capital require prospectuses (in addition to the information document).

The position on secondary issuances has been relaxed further for CEIFs. Assuming that the fresh capital will be used in line with a CEIF’s investment policy, prospectuses are only required for issuances of ordinary shares or C shares (shares that typically convert into ordinary shares after a specified period) greater than 100% of the existing capital of that class of share.

Where a prospectus is not required under the New Prospectus Rules for a secondary issuance, the issuer (whether a company or a CEIF) may still decide to publish a voluntary prospectus. In this situation, the issuer will have discretion to publish a full or simplified prospectus and will not require FCA approval.

Takeovers

The New Prospectus Rules will retain the existing exemption from the prospectus requirements if a takeover exemption document describing the transaction and its impact on the issuer is published. Further, FCA guidance has been issued in respect of the form and content of the document (in October 2025)³, which uses EU regulations on this subject as a starting point. The FCA has helpfully clarified that the use of takeover exemption documents will be available to transactions structured as either contractual offers or schemes of arrangement.

In a significant and welcome development, the UK Takeover Code (“Code”) is given particular importance in this context. Takeovers subject to the Code may rely on the takeover offer document (or scheme circular) as the takeover exemption document with no requirement for any additional FCA review or approval. This deference to the Code, which was recently updated in February 2025, demonstrates a cohesive approach to the modifications being made to the regulatory landscape of UK capital markets, which is welcome.

The FCA guidance prescribes the form and content of the takeover exemption document in situations where the takeover is not subject to the Code. FCA approval of the exemption document will only be required in respect of takeovers involving securities that are not fungible with those already admitted to trading, or where the takeover is a reverse acquisition takeover.

The retention of this exemption, combined with the secondary issuance exemption, substantially reduces the number of situations where a prospectus (or takeover exemption document) will be required (see below).

Admission to a primary MTF (e.g. AIM)

For the first time, a prospectus will be required for initial admission to trading on primary MTFs. This will include reverse takeovers where the acquisition leads to the cancellation of the company’s admission to trading but will not extend to offers made to qualified investors only or to secondary issuances. However, an MTF prospectus will not need to be approved by the FCA. Content, format and authorisation processes will fall within the domain of the MTF primary operator (in the case of AIM, the London Stock Exchange (“LSE”)), but MTF prospectuses will be subject to the same “necessary information test” as prospectuses for admission to trading on a UK-regulated market. MTF operators will have significant discretion over how this operates in practice and they will also determine the sanctions that issuers may face if they fail to publish a prospectus.

What Do The New Prospectus Rules Mean In Practice?

IPOs

A prospectus will still be required for an IPO on a UK regulated market (including the LSE), and, for the first time, an MTF admission prospectus will be required for an IPO on a primary MTF (including AIM). With a view to encouraging retail participation, the new regime also reduces the amount of time a prospectus must be made available to the public from six working days to three working days. This is aimed at mitigating the risks, and assuaging concerns, associated with market fluctuations in the lead-up to the IPO.

The timelines for an MTF prospectus may be different due to the individual MTF operator’s discretion as to the process for reviewing and approving prospectus documents. The aim is that the MTF admission prospectus will lead to increased retail participation in IPOs on AIM as opposed to issuers limiting their offering to a low number of participants or qualified investors.

Secondary issuances

The New Prospectus Rules have introduced a significant change to secondary issuances by allowing companies to issue up to 75% of their existing share capital without the need for a prospectus. Given the primary focus of deregulation is secondary issuances, there is an argument that UK authorities have concentrated on preventing further flight of capital from the UK markets, being an easier goal (at least, in the short-term) than attracting more IPOs. The removal of the prospectus requirement for most secondary issuances makes it simpler to raise capital in the UK markets and will facilitate takeover offers with share-for-share consideration.

The New Prospectus Rules (coupled with the changes to the UK Listing Rules) are also intended to reduce red tape around the listing process for secondary issuances. The UK Listing Rules’ listing application process for secondary issuances will be removed and replaced with RIS notification requirements under the New Prospectus Rules. These notifications will be required to be made on the day of the relevant secondary issuance.

The practical usefulness of this change will only be revealed in due course. The two main constraints are that:

• it remains to be seen how this will interact with disclosures required under US securities laws and whether US investors will be able to get comfortable with a relaxation of prospectus requirements. UK issuers generally target sophisticated investors via private placements while relying on the relaxed information standards introduced by Rule 144A of the US Securities Act. However, there is a risk that it may, in any case, become market practice to publish prospectuses and/or proxy statements to the standards set by wider US securities laws; and
• despite the FCA’s decision to change the threshold for a prospectus from 20% to 75% of existing share capital, issuers may still choose to avoid larger placings to comply with guidance from relevant industry bodies that will impact the size of the capital raise. For example, the Pre-Emption Group (the arm of the UK Financial Reporting Council that publishes guidance on the disapplication of pre-emption rights) still limits issuances of more than 20% of existing share capital that do not follow a pre-emption process.

In respect of secondary issuances on primary MTFs, the operators of the relevant MTF will have discretion to decide whether an MTF admission prospectus will be required.

Takeovers

Takeover exemption documents (in place of a prospectus) will only be required where the takeover involves a UK bidder offering over 75% of its share capital listed on UK-regulated markets as consideration.

Where the consideration offered by a UK bidder is less than 75% of its share capital listed on UK-regulated markets, exemptions to the requirement to publish a prospectus are achieved through an (at times, complex) interaction of the exemptions in the New Prospectus Rules as follows:

• A takeover through a scheme of arrangement will fall within:
• a specific exemption to the prohibition on an offer to the public; and
• an exemption to the admission to trading prospectus trigger provided the consideration shares have already been admitted to trading and the new secondary issuances exemption applies (i.e. less than 75% of existing share capital).
• A takeover through a contractual offer will fall within:
• an exemption to the prohibition on an offer to the public provided it involves (even, in part) consideration in the form of shares listed on a UK-regulated market or primary MTF, as it will be considered an admission to trading; and
• an exemption to the admission to trading prospectus trigger provided the consideration shares are of a class already admitted to trading and the new secondary issuances exemption applies (i.e. less than 75% of existing share capital).

Additionally, any type of takeover (i.e. contractual offer or scheme of arrangement) will fall within specific takeover exemptions if the consideration shares are unlisted or listed overseas. To benefit from the relevant exemption to the prohibition on an offer to the public, bidders will be required to publish a four-page information document containing basic details about the transaction (e.g. basic information regarding the bidder, terms of the offer, the bidder’s intentions relating to the target business etc). Assuming the bidder does not intend to list the consideration shares in the UK, the admission to trading trigger will not be relevant.

Similar to the previous rules, the New Prospectus Rules only apply to “transferrable securities”. Therefore, we expect market practice in respect of stub equity deals on public to private transactions to remain the same – being that no prospectus is required if the unlisted shares in the offeror vehicle contain sufficient transfer restrictions such that they would not be considered “transferrable securities”.

In practical terms, the caveat to the progress from this reform is that overseas bidders may still be required to publish prospectuses under the laws of their home jurisdiction, in particular, under US securities laws. Additionally, underwriters and investors may still demand the publication of voluntary prospectuses.

Unlisted Companies and Prospectuses

Private companies and unlisted public companies can no longer offer securities (worth over GBP 5,000,000) to the public by simply publishing a prospectus (unless they fall within one of the exemptions). Such offerings will instead have to make use of a POP.

What Are The Content Requirements For a Prospectus Under The New Regime?

The New Prospectus Rules retain the majority of the prospectus content requirements, however certain requirements have been introduced to encourage more useful and specific disclosure and simplify format requirements.

PFLS: Protected forward-looking statements

The New Prospectus Rules introduce the concept of protected PFLS, which provide a different liability standard for certain forward-looking statements, in particular in respect of future financial performance and sustainability objectives. If a forward-looking statement meets the criteria of a PFLS (see below), it will be subject to a fraud or recklessness liability standard (as opposed to the lower negligence standard). This aims to reduce issuer concerns about the liability burden and encourage disclosure of information that investors will find useful in making informed investment decisions.

Not every statement is considered to be a PFLS, and to qualify as such the statement must (i) be clearly identified as forward-looking, (ii) estimate when the events or circumstances mentioned are likely to occur, (iii) contain information a reasonable investor would use to decide investment decisions and (iv) contain financial or operational information about the issuer, with figures or information that is empirically verifiable. The FCA has stated that PFLS should be prepared so that they are understandable, representative of the issuer’s actual plans and strategies, and comparable. Examples of types of PFLS (provided that specific timeframes are referenced) would include financial forecasts, strategic plans, capital expenditure plans and sustainability goals.

Other changes

To simplify matters for issuers, the permitted length of a prospectus summary will increase from seven to ten pages and allow cross-referencing to other sections. The need for a financial annex will be removed, allowing cross-referencing to relevant financials instead.

The requirement for a working capital statement for a prospectus is retained. The FCA provided additional guidance in a recent Primary Market Bulletin published on 12 January 2026⁴. Amongst other changes, and details on content and calculation requirements, the FCA has proposed that (i) an issuer can provide a ‘clean’ working capital statement where they can state definitively that they have sufficient working capital for present requirements and (ii) an issuer can include a qualified working capital statement, stating that the issuer, in its own opinion, does not have sufficient working capital and explaining how it proposes to provide the additional working capital needed. The FCA also clarified that where an issuer has a complex financial history, or a significant financial commitment, additional financial and non-financial information must be included in the prospectus. The information supplied must be necessary for a material investor to make an informed assessment in relation to the issuer, which will differ on a case-by-case basis.

Finally, additional requirements in respect of climate-related disclosures have been introduced which apply to issuers of equity securities (and depositary receipts representing equity shares). CEIFs, open-ended investments companies and shell companies have been explicitly excluded.

The FCA has recommended using the frameworks set out by International Sustainability Standards Board and the Task Force on Climate-related Financial Disclosures. This may, however, be subject to change with the implementation of the UK Sustainability Reporting Standards expected to be enforced at some point in 2026 or 2027.

1 Please see our previous alert in respect of the updates to the UK Listing Rules published on 30 July 2024 here.

2 See FCA Policy Statement 25/10.

3 See Technical Note 608.1 issued by the FCA in Primary Market Bulletin 58.

4 FCA Primary Market Bulletin 61