- New rules come into force today on corporate equity and bond issues, and IPOs (FCA | PS25/9: New rules for the public offers and admissions to trading regime)
- The changes could have significant benefits for retail investors
- What’s the difference between the old and new rules?
- Why it supports the chancellor’s push to get more people investing
- AJ Bell has signed an open letter to the Treasury calling for greater retail participation in IPOs
Dan Coatsworth, head of markets at AJ Bell, comments:
“Retail investors should find it easier to take part in company fundraisings, stock market flotations, and corporate bond offers under new rules that come into effect today (19 January 2026).
“New ‘Public Offers and Admissions to Trading Regulations’, or ‘POATRs’, simplify the process for raising capital. This includes IPOs (initial public offerings) and secondary offerings where a company already on a stock market taps investors for more cash by issuing new shares.
“The new rules could encourage more companies to raise money on capital markets to support their growth plans. Easier access to fundraisings could also help to broaden companies’ shareholder base and be a stepping stone for retail investors to become more active with their ISA and pension portfolios.
“This potential uplift in activity chimes with efforts by the government to encourage more people to invest. Chancellor Rachel Reeves is keen for people to stop hoarding money in cash savings accounts as history suggests investing can deliver better returns over the long term.
“Building wealth could not only give individuals more options on the lifestyle they choose to live but also strengthen the potential for greater spending to help drive the economy.”
What are the rule changes?
- Better access to share placings
“Under the old system, UK-listed companies had to follow EU rules and could only raise up to 20% of their existing share capital without producing a prospectus. Furthermore, they could only raise up to €8 million in a share placing from retail investors without a prospectus. Both companies and retail investors found this situation frustrating.
“Certain companies might not have the luxury of time to produce detailed documents if they wanted to access cash quickly, such as for working capital or an opportunistic acquisition.
“There was often a rush by investors to take part, with fundraisings typically launching immediately after the market close and being full within a matter of hours or minutes. Anyone who didn’t keep a close eye on their emails or stock market announcements risked missing out on offers, which were often available at discounts to the market price.
“The new rules mean companies on the stock market can now raise up to 75% of their existing share capital without having to publish a prospectus, and the €8 million cap for retail investor involvement is removed.”
- Potentially wider access to IPOs
“For years, retail investors could not access most IPO offers and had to wait until the first day of dealings to buy the shares. In doing so, they missed any bump in valuation that often occurred as soon as the shares hit the market, and which only benefited those who bought at the IPO offer price.
“The limited amount of retail IPOs was partially down to companies often finding it easier and quicker to restrict access to professional investors during the flotation. Any IPO offer that included retail investors had to be open for six working days, which is quite long from a risk perspective.
“Companies spend months preparing for an IPO and the offer part is the final stage, at which point they just want it wrapped up, not be left waiting while people stew over a prospectus. This might seem odd as it is important not to rush into making investment decisions, but six days can be a long time on the market. Adverse macroeconomic or corporate news during the offer period could potentially dampen demand for an IPO, negatively influence its pricing, and lead to under-subscription or the flotation scrapped in a worst-case scenario.
“Under the new system, the offer period for retail investors has been halved to three days.”
- Wider retail investor access to corporate bonds
“Corporate bonds have historically been the domain of institutional investors rather than retail investors due to complexities around documents and disclosures. Certain bonds have a minimum subscription level beyond the reach of retail investors. Companies eager to include retail investors had to publish an additional prospectus to issue bonds in denominations below €100,000.
“New regulations make the corporate bond world more accessible for retail investors. A single set of rules is in place, and there is no longer a requirement for bond issuers to publish prospectus summaries. Importantly, retail investors should be able to subscribe for bonds alongside institutional investors.
“It’s possible we start to see more frequent bond issues to appeal to the retail investor market, broadening choice and firing up interest in fixed income as a portfolio diversifier.
“Corporate bonds can be higher risk than the type of government bonds that retail investors have typically bought in the past, such as gilts. Therefore, there might be a learning curve for people dipping their toe into buying individual corporate bonds for the first time. It’s therefore important that anyone looking to invest in corporate bonds does so as part of their long-term investment strategy and has an understanding that things can occasionally go wrong.”
