UK prospectus regime - HMT publishes its consultation paper

HM Treasury has published a consultation paper outlining wide-ranging proposals to reform the UK's prospectus regime. This follows Lord Hill's recommendation, in his UK Listing Review, that the Government carries out a fundamental review of the existing regime (see The UK Listing Review - seizing the opportunity for reform? for more information) and the Government confirming, on 19 April 2021, that it would take forward all of Lord Hill's recommendations.

The consultation paper is undoubtedly ambitious and raises some existential questions as to the role the prospectus should play in the UK's capital markets. The Government's objectives are to:

• facilitate wider participation in the ownership of public companies by making it easier for retail investors to participate in securities offerings;

• simplify the regulation of prospectuses and remove unnecessary duplications, without lowering regulatory standards;

• improve the quality of information investors receive under the prospectus regime, including by making it easier for issuers to provide forward-looking information to investors; and

• ensure that the regulation of prospectuses is more agile and dynamic by empowering the FCA to make changes where it deems necessary.

Whilst it is too early to see precisely how this will play out - as the process will require a further, more detailed consultation by the FCA, who will be responsible for formulating most of the actual rules - the key objectives from the Government are clear.