The Financial Conduct Authority (FCA), the UK’s financial market regulator, announced that it making significant reforms to the country’s capital markets.
Announced on Tuesday 15 July, these reforms are part of a bid to drive growth and maintain the country’s position as a global leading location in the financial services sector.
The regulator said it is currently in the middle of sweeping reforms to UK capital markets, updating its regulatory requirements to make it easier for businesses to raise capital and boost growth.
It added that capital markets power Britain’s economic engine. The country boasts world-leading derivatives, debt issuance, foreign exchange, and commodity trading sectors, as well as the second-biggest financial services centre in the world — London.
“We are second only to the US in asset management. Those strengths are why the UK is the world’s largest net exporter of financial services,” the FCA said.
‘Risk is good’
Reforms to UK financial markets announced by the regulator today align with its new approach to risk-taking and growth, recently outlined in a speech by FCA executive director of markets Simon Walls.
Speaking at the Global Management Summit 2025 in London, Walls said the FCA wanted to make sure the spirit of risk-taking flourishes.
“Depending where you get your news, it may sound strange to hear a regulator extol the virtues of risk. So let me say it loud and clear: Risk is good. In much of financial markets, risk is the point,” Walls said.
“It drives innovation. It finances infrastructure. It supports employment. And ultimately, through your decisions, it improves lives for the people you invest for.”
“These things, driven by risk-taking, are also the key to growth,” he said.
What is changing?
Up to now, the regulator has already made progress in relaxing restrictions around capital raising and supporting risk-taking through changes that include the following:
- The prospectus regime has been overhauled and a new public offer platform introduced, making it easier for companies to raise money.
- Transparency rules have been streamlined and the FCA has proposed to remove the systematic internaliser regime or bonds and derivatives.
- Regulation around commercial users of commodity derivatives will be simplified.
- The advice guidance boundary was reformed to help support people with pension and investment advice.
- PISCES, a new private stock market for growth companies was introduced to improve investment in innovative technology.
Looking ahead, the FCA also aims to implement the following changes:
- Stripping back regulation to make it easier for UK companies to raise capital, including halving the time between a prospectus and IPO, and allowing companies to more easily issue corporate bonds to retail investors.
- Establishing a consolidated tape for bonds and consulting on a consolidated tape for equities.
- Reviewing the criteria for who is treated as a ‘professional investor’ for investment firms as well as unlocking more opportunities for retail investors.
- Improving the quality of data received by the FCA and reduce associated costs for firms.
- Reviewing securitisation rules to simply and remove barriers to issuing and investing in securities.
“Our reforms in wholesale markets rebalance risk, support new technology and innovation, and shift our regime from pre-emptive gates and checks, towards a world of transparency and disclosures,” the FCA said.
“They give firms more freedom to act and help investors make informed decisions. This will ensure our market remains world-leading, now and in the future.”
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