The new UK regime for public offer platforms: the FCA consults on further proposals

An important element of the UK’s new public offers and admissions to trading regime is the introduction of the public offer platform (POP), which will enable companies to make large offerings of securities to the public outside a public market. The FCA has recently published a consultation paper (CP25/3) setting out further proposals to support the implementation and operation of the new POP regime. CP25/3 builds upon the FCA’s proposals on the POP regime in its earlier consultation paper (CP24/13), explained in our previous blog post. 

The activity of operating a POP will be similar to investment-based crowdfunding. The latest consultation paper outlines the FCA’s proposals on how it intends to authorise firms seeking to operate POPs, including its initial views on how a potential transitional regime could operate. The CP also sets out the FCA’s proposed supervision approach for firms operating POPs.

In addition, the FCA is seeking feedback on specific Handbook and non-Handbook changes, which include:

• The extension of the compulsory jurisdiction of the Financial Ombudsman (FOS) to the new regulated activity of operating a POP.
• The fees the FCA proposes to charge POP operators, including the FOS and Financial Services Compensation Scheme (FSCS)-related levies.
• PERG guidance on, among other aspects, the regime for firms approving the financial promotions of unauthorised persons.

Background 

Currently, UK companies offering securities in excess of €8 million are obliged to publish a prospectus, which may put some companies off a public offer. The POP regime is intended to facilitate companies making public offers of securities to a broad range of investors outside public markets when raising more than £5 million. The proposals aim to ensure a comprehensive regulatory framework for firms operating POPs to encourage issuer capital raising and enhance consumer protection and market integrity.

The POP regime is part of the Public Offers and Admissions to Trading Regulations 2024 (POATRs), which will replace the UK Prospectus Regulation. This initiative follows recommendations from the UK Listing Review and the Gloster Report, aiming to provide more targeted regulation for public offers of securities outside public markets. The POP will enable companies to make large offerings without requiring a prospectus, by giving platform operators a gatekeeping role. For more information on the POP regime, see our blog post on the FCA’s engagement paper published in July 2023. 

The proposals 

Authorisation for operating POPs

The FCA proposes an authorisation process for firms wishing to operate POPs, including a potential transitional regime, which would allow existing authorised firms to apply for authorisation by requesting a Variation of Permission (VoP) during the potential initial application period. This transitional regime would allow existing authorised forms to be treated as holding Part 4A permission as ‘temporary’ permission for operating a POP while the FCA assesses their VoP application during the familiarisation period. The transitional period would apply from the point the firm has submitted its VoP application and would cease when the FCA determines the application or it is withdrawn by the applicant.

Under the FCA’s current proposals, firms would have a six-month period to familiarise themselves with the authorisation process before the rules come into force in January 2026 alongside the full POATRs. After this period, firms could still apply for the new permission at any time, but they would not be able to benefit from being able to conduct POP activity on a temporary permission basis while their application is being reviewed.

The FCA’s approach to this potential transitional regime, including the details on how it could in practice work, requires legislative change and as a result, it is being explored with HM Treasury.

Supervision for firms operating POPs

The FCA intends for firms operating POPs to be integrated into the FCA's broader supervisory framework as part of Regulated Activity Group (RAG) 3. This would require the firm operating the POP to:

• comply with specific reporting requirements, including disclosing financial information, and submit any other reports that may apply (depending on the prudential requirements applicable to the specific firm);
• report complaints data under the form in DISP 1 Annex 1;
• submit the Financial Crime Report under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 if the firm has a total revenue of £5 million or more; and 
• familiarise themselves with the process and associated return to pay the Economic Crime Levy (ECL). 

Alongside CP25/3, the FCA also published a consultation paper (CP25/2) in which it is consulting on further proposals to support the POATRs and to change UK Listing Rules. CP25/2 includes proposals to amend the Decision Procedures and Penalties Manual (DEPP) and the Enforcement Guide (EG) to reflect the POATRs, which grant the FCA a range of supervisory and enforcement powers. The FCA has indicated in CP25/3 that the overarching enforcement powers in the POATRs will also be relevant to public offers facilitated by a POP operator. 

The Financial Ombudsman Service

The FCA also proposes to extend the compulsory jurisdiction of the FOS to cover complaints related to POP operators. This would be consistent with the current approach for other activities, including investment-based crowdfunding. It ensures that eligible investors can seek redress if they are dissatisfied with how a POP operator has handled their complaint, aiming to encourage investor confidence in POP operators. Issuers of securities seeking to raise capital through a POP operator could also be eligible to refer complaints to the Financial Ombudsman. 

The Financial Ombudsman has proposed not to extend its voluntary jurisdiction to cover complaints related to POP operators. This is in part due to the fact that complaints would be covered by the compulsory jurisdiction anyway and that any extension of the voluntary jurisdiction would only lead to a limited increase in scope. 

Amendments to FCA guides 

The FCA proposes to make some consequential amendments to its Handbook and non-Handbook guides as a result of the new regulated activity, including to DEPP and the Professional Firms sourcebook (PROF) in the Handbook, EG and the Perimeter Guidance Manual (PERG). 

In particular, the FCA has proposed an amendment to PERG guidance to clarify its understanding of the reference in the Financial Services and Markets Act 2000 (Exemptions from Financial Promotion General Requirement) Regulations 2023 to the person who has ‘prepared’ the content of the communication. The FCA expects that financial promotions relating to offers will often be prepared by the issuer rather than the POP operator and so the exemptions will not apply. The POP operator will therefore need specific permission to approve those promotions under the financial promotion approval gateway regime. The FCA has indicated that it is considering feedback on this point and will clarify this in its policy statement on the new regime. 

Next steps 

The FCA is seeking responses to this consultation by 14 March 2025, which will be analysed alongside the feedback received from CP24/13, and final rules for the POP regime will be published in summer 2025. The new regime is expected to come into force in January 2026, alongside the broader POATR framework.

Similar to other UK regulatory developments, the POATRs should be read in light of the UK government’s growth agenda and the FCA’s secondary competitiveness and growth objectives. The FCA notes that its proposed rules aim to support capital raising activity and encourage investment by consumers, based on robust but proportionate standards. In particular, the FCA considers that the proposals for POPs may help to make the UK markets more attractive from a business standpoint. It was interesting to note the FCA’s acknowledgment that “[w]e know that the pursuit of higher, more meaningful economic growth may involve more risk to investors who choose to engage in certain investment opportunities.” The success of the POP will depend in part on the balance struck by the FCA in its regulatory approach. The regime will need to be sufficiently attractive to both POP operators and issuers, otherwise the current cliff-edge of €EUR 8 million will simply be replaced by a new one of £5 million.