New UK prospectus rules coming into force next month are likely to deliver only a modest impact to London’s IPO attractiveness, amid mixed City opinions on the package.

The package is intended to make capital-raising quicker and more flexible. At worst, dealmakers warn the package could weaken investor protections; at best, they caution it may make little difference to board behaviour as the effort to meet shareholders’ disclosure demands will remain constant.

Applying from 19 January 2026, the Public Offers and Admissions to Trading Regulations 2024 (POATRs) and the Financial Conduct Authority’s (FCA) new Prospectus Rules (PRM) simplify when a prospectus is required and expand the ability for companies to raise capital without one. The reforms are designed to help the UK compete more effectively post-Brexit.

Their arrival coincides with tentative signs of recovery in the equity markets. Princes Group (which raised USD 526m) and Shawbrook (USD 525m) both completed sizeable IPOs in October, boosting volumes to USD 2.8bn, up from USD 950m the year before.

The improvement indicates that investor appetite is returning, and policymakers hope the new regime will support further activity.

Still, the incoming reforms have met with some scepticism.

Detractors warn they may increase uncertainty around liability standards and lead to inconsistent transparency if issuers rely more heavily on ongoing-disclosure rules rather than a full prospectus. Others argue, the greater discretion given to boards and the FCA risks uneven application across the market.

However, prospectus liability itself will remain unchanged, according to Dan Hirschovits, London capital markets partner at Paul Hastings. “Prospectus liability under the new UK public offers regime is broadly the same as under the EU-derived prospectus regime,” he says. “So, if a statement is misleading or untrue and a loss has been suffered, shareholders can pursue a claim, with a negligence standard of fault for the company and its directors.”

Nonetheless, the new rule changes expand the number of transactions that can be executed without a prospectus.

Companies will be able to raise significantly larger proportions of share capital through market announcements rather than full documentation. This raises the litigation threshold. As Hirschovits notes, “With greater scope for capital raising without a prospectus under the new regime, the bar is higher for similar shareholder claims where capital is raised using a public announcement only, with liability for misleading or untrue statements broadly requiring management to have been reckless or knowingly misleading.”

For critics, this risks eroding the due-diligence discipline that accompanies a prospectus. Investors fear they may lose influence over disclosure quality if more deals can be executed rapidly with fewer intermediaries involved.

Shareholders left in the dust? 

A defining element of the new regime is that pre-emption rights remain central. POATR does not amend company law, meaning existing governance expectations remain.

Pre-emption rights remain a matter of company law, therefore, with boards needing to remain on solid ground.

Hirschovits explains: “If a company wants to raise between 20% and 75% without a prospectus, it will technically be able to do so under the new regime. However, it’s likely that it will still need to go to its shareholders for share capital approvals. Broadly speaking, the existing guidance from the [Financial Reporting Council’s] Pre-Emption Group permits listed companies to seek the customary ‘10% + 10%’ non-pre-emptive authority, but anything larger means a shareholder resolution and disclosure to the market.”

Supporters argue this balance preserves investor safeguards even as regulatory hurdles fall. Critics say it continues the UK’s tradition of regulatory complexity, with multiple overlapping frameworks shaping capital raising.

To litigate or not

The reforms reflect policymakers’ desire to make UK capital markets more responsive, echoing elements of the US model for rapid follow ons.

This appeals particularly to tech and growth issuers. Prospectus rule changes “will make a real difference by allowing companies to tap the market more quickly, closer to US practice,” said Ariel White-Tsimikalis, partner in the Technology and Life Sciences and Capital Markets practices at Goodwin. “With private markets under pressure, having greater flexibility on the public side is valuable.”

However, neither regulators nor participants expect a shift towards US-style litigation.

“The FCA has said that its Listing Rules reforms mean the UK is moving toward a more disclosure-based model. However, it’s still a long way from the US in terms of legal culture and investor behaviour when it comes to securities litigation and class-action lawsuits,” Hirschovits argued.

White-Tsimikalis echoed this. “I do not expect the changes to trigger more litigation, as good disclosure and clear announcements should provide cover. The UK environment is not as litigious as the US, and that is unlikely to change.”

With some investors continuing to argue that the absence of a strong litigation backstop reinforces the need for prospectus-level discipline, especially in more complex sectors, various asset allocators may decide they need to step up their oversight to keep boards on the straight-and-narrow.

Uneven impact

And boards’ capacity to stay on top of disclosures and investors’ transparency requirements depends on scale and resource – the reforms will not affect all issuers equally.

“Larger issuers are better equipped to handle the disclosure burden because they have the resources to do it properly,” White-Tsimikalis said. Smaller and mid-cap companies – central to efforts to revive London – may struggle with the heightened expectations around ongoing disclosure.

Sector dynamics could also play a role. “There may be sector nuances, particularly in biotech where the clinical risk is higher,” she added. In such cases, investors may still expect fuller documentation regardless of regulatory flexibility.

This could spur more companies to produce prospectuses even when not legally required.

“It is possible we see issuers preparing a prospectus voluntarily, particularly where a significant capital raise is accessing US and international investors,” said Hirschovits. “It is partly about legal cover, partly about investor confidence.”

Governance remains the key constraint. The prospectus reforms create scope for raising more significant amounts of capital without a prospectus, but they don’t remove the governance aspects for boards, according to Hirschovits.

“Ultimately, shareholders will still hold management to account,” he noted. “Flexibility cuts both ways […] The reputational risk is real.”

Amid mixed views over POATR and PRM’s real-world impact, it remains the case that a lasting revival in London listings will likely depend more on market conditions than the regulatory environment. These reforms may sharpen the UK’s capital-raising toolkit, but time saved in drawing up prospectuses may be lost in fielding shareholder queries and pressure for transparency.

Ultimately, market conditions will determine whether London’s full 2026 IPO pipeline delivers on its promise.