Capital markets – Treasury review of secondary capital raisings in the UK

HM Treasury has launched a UK Secondary Capital Raising Review to look into improving the capital raising process for publicly traded companies in the UK.

Lord Hill’s UK Listing Review made a series of recommendations to the Government to increase the attractiveness of the UK as a destination for IPOs and optimise the capital raising process for companies on UK markets (see this blog post for further information). One of those recommendations was to bring together an expert group to improve the efficiency of further capital raising processes by companies that are already listed.

The UK Secondary Capital Raising Review will look at a number of issues including:

• whether the overall duration of the secondary capital raising process can be reduced (for example by reducing, on a rights issue, the period during which shareholders can trade their rights);
• whether new technology can be used to ensure shareholders receive relevant information and exercise their rights more rapidly; and
• whether other fund-raising mechanisms are worth considering in the UK, including structures to facilitate retail investor participation in capital raisings.

The Review is seeking views from interested parties, including market participants, by 5pm on 16 November 2021 and will report back to the Treasury with recommendations in the spring of 2022.

For a summary of all the UK Listing Review recommendations and the progress made so far see our short overview here.