The public offer platform - Engagement Paper 5

Read Engagement Paper 5

Why we are publishing this paper

This regime will allow the FCA to set specific rules for types of public offers of securities that are not admitted to a public market.

We are keen to make sure that this framework provides investors with sufficient information to assess the benefits and risks of investing in securities offered outside of public markets, and that platform operators undertake appropriate due diligence to prevent fraud.

Where possible, we will seek to draw on existing industry best practice and standards when developing rules, which are tailored to the risks of this activity for investors, while ensuring markets work well for businesses seeking funding.

As a starting point, we are focusing on a proposed regime that will set requirements on platform operators to ensure that:

• due diligence and checks on companies are conducted to prevent fraud and to facilitate genuine capital raising, which will strengthen investor protection and support market integrity for such offers
• investors have sufficient, accurate, and useful information, on both the company and the securities being offered, which enables them to understand the opportunity and risks when investing in securities on a platform
• companies can raise capital efficiently and effectively through such platforms, subject to appropriate scrutiny and transparency

This engagement paper is part of a series of papers setting out our emerging policy thinking on how we may use our rule-making powers under the new regime.

Who is this of interest to

• Companies seeking to issue securities that will not be admitted to a public market.
• Existing and prospective investors in securities not admitted to public markets, including institutional and individual investors.
• Exchanges or venue operators, including investment based crowdfunding platforms.
• Intermediaries who may facilitate, including providing execution and/or marketing of investments into securities offered outside of public markets.
• Trade associations representing the various market participants above.
• Wider financial market participants, such as research analysts.

Next steps

We welcome written responses by email to the questions raised by the engagement paper by 29 September 2023.

Please email: [email protected]

We plan to also gather views through focus groups with key trade associations and other relevant market participants and stakeholders later this year.

Feedback on this paper, and the other papers in the series, is intended to create a dialogue which will inform further development of proposed rules which we will consult on formally during 2024.