Secondary capital raising regime

Digitisation Taskforce: Interim Report

On 11 July 2023, the Digitisation Taskforce published its interim report setting out a number of potential recommendations for UK government, regulators and market participants. The Taskforce was established in July 2022 as recommended by the Secondary Capital Raising Review (see further below), which identified digitisation of the UK’s shareholding framework as a key reform to enhance the efficiency of capital markets, including eliminating the use of paper share certificates and improvements to the UK’s intermediated share ownership system. For a summary of the interim report see here. 

The deadline for feedback on the interim report is 25 September 2023. A follow up report taking account of comments received, and setting out final recommendations, will be issued within six months of the closing date.

Recommendations of the UK Secondary Capital Raising Review

In July 2022 the UK Secondary Capital Raising Review published its report (Report) setting out a series of bold and wide-ranging recommendations for improving the secondary capital raising regime in the UK designed to make it quicker, more flexible, more inclusive of retail investors and more cost-effective, as well as moving towards digitisation and making better use of technology. The recommendations are closely inter-linked with a raft of other recent and ongoing reforms triggered by the Hill Review intended to modernise, enhance and maintain the attractiveness and competitiveness of UK capital markets on the global stage.

Whilst the Report is detailed in its recommendations, responsibility for taking these forward is allocated to other bodies including the FCA, HM Treasury, the FRC and the Pre-emption Group (PEG). However, given the broad market support for the conclusions of the Report we can expect rapid implementation of many of the recommended changes, although others will necessarily take longer to come to full fruition.

For our views on the recommendations see our briefing Bold recommendations outlined in UK Secondary Capital Raising Review

Updated PEG Principles

In November 2022, the Pre-emption Group published an updated Statement of Principles and template resolutions reflecting recommendations made by the UK Secondary Capital Raising Review in its report. PEG also noted that it is committed to implementing the report’s recommendations in full, and is working to establish the governance and membership proposed and will make a further announcement when this is complete.

For further information on the impact of the updated Statement of Principles see our briefing New PEG pre-emption guidance: Consequences for listed issuers.

Digitisation Taskforce: Interim Report (July 2023)

Investment Association: Updated Share Capital Management Guidelines (February 2023)

2022

PEG Statement of Principles, template resolutions and associated press release (November 2022) 

UK Secondary Capital Raising Review: Report (July 2022)

Digitisation Taskforce: Terms of Reference (July 2022)

2021

UK Secondary Capital Raising Review: Call for Evidence (October 2021)

UK Listing Review (Hill Review) (March 2021)