New UK POATRs regime – what it means for debt issuances

The transition to the new POATRs regime marks a significant conceptual shift in the way that access to, and participation in, capital markets is regulated in the UK.  

Under the previous UK PR regime, a public offer or an admission to trading on a UK regulated market could be made provided an FCA-approved prospectus was published.  In contrast, the new POATRs regime puts in place a general prohibition on public offers of relevant securities, subject to a list of exceptions.  

Several of these exceptions are carried over substantively (or with limited adjustments) from the previous regime, such as:

• offers where the total consideration within a 12-month period does not exceed £5 million or an equivalent amount (previously the threshold was €8 million) 
• offers to qualified investors
• offers to fewer than 150 persons un the UK
• offers where the minimum denomination per unit is at least £50,000 or an equivalent amount (previously the threshold was €100,000)
• offers where the minimum consideration per investor is at least £100,000 or an equivalent amount

However, one of the new exceptions to the general prohibition on public offers is where the offer is conditional on the admission of the transferable securities to trading on a UK regulated market.  Where this exception applies, the new POATRs regime requires an FCA-approved prospectus to be published unless a relevant exemption applies.

• Single disclosure standard: The new POATRs regime removes the distinction between wholesale and retail disclosure requirements and replaces these with a single disclosure standard for all non-equity securities.  The new disclosure standard is based substantively on the wholesale disclosure standard under the previous UK PR regime.
• No requirement for debt prospectus summaries:  As a consequence of the move to a single disclosure standard (based on wholesale requirements), there is now no longer any requirement to provide a prospectus summary (or provide an issue-specific summary to Final Terms) for issues of low-denomination non-equity securities.
• Forward incorporation by reference:  For non-equity base prospectuses, it will be possible (on a voluntary basis) to forward-incorporate annual and interim financial information, audit reports and financial statements.  Subject to the comments below about significant change/material adverse change statements and the supplements regime more generally, for many issuers this could alleviate the need to prepare a supplementary prospectus for periodic financial information.
• ‘Evergreen’ significant change/material adverse change statements:  For issuers wishing to benefit from the new forward-incorporation regime, it should also be possible to give clean significant change and no material adverse change statements on an evergreen basis, meaning such statements would refer to ‘the most recent’ financial information incorporated by reference, rather than by reference to a specific date.  However, it is expected that the evergreen regime would not be applicable where any such statements had been qualified.
• Supplementary prospectus requirements: 
  • The new POATRs regime carries forward the general obligation under the previous UK PR to supplement a prospectus in the event of a significant new factor, material mistake, or material inaccuracy. 
  • A nuance of the new regime is that the publication of information that is forward incorporated by reference does not in itself trigger the requirement for a supplementary prospectus as a significant new factor, but if such information causes a material mistake or material inaccuracy in any other information already appearing in the base prospectus a supplementary prospectus would be required in the normal way.
  • Also, of particular relevance to non-equity base prospectuses, there seems to be a certain amount of additional flexibility in the new regime to allow supplements in circumstances which do not amount to a significant new factor or material mistake/inaccuracy (which would not have been permitted under the previous UK PR regime).  In particular, the new regime allows supplements to be used to make changes to the terms and conditions and/or the final terms, provided that either:
    • such changes result in securities which might be issued after the changes are made ‘remaining fungible with’ securities which might have been issued before the changes were made, or
    • where the above fungibility test is not met, new securities are not asset backed or linked to an underlying asset, and the supplementary prospectus in question must include the minimum information required by the relevant disclosure annex

The detailed disclosure and content requirements, including the new single standard annexes, are set out in a new sourcebook section of the FCA Handbook, the Prospectus Rules: Admission to Trading on a Regulated Market (PRM), replacing the previous Prospectus Regulation Rules (PRR).

In its policy guidance and statements, the FCA has spoken of the new POATRs regime “removing multiple barriers to allow wider retail investor opportunities to invest in and benefit from the growth of UK companies”.  

In connection with this, the FCA has introduced the concept of a ‘plain vanilla listed bond’ (PVLB) suitable for a “mass retail market”.  The technical PVLB definition is fairly extensive, but the essential features are that they are unsubordinated, unsecured, exhibit non-complex economic features (fixed rate or floating rate by reference to a widely understood benchmark such as Bank of England base rate), not subject to write-down or conversion (i.e. issued by a corporate rather than a bank/financial institution), and issued by an issuer which already has (or is the subsidiary of an entity which guarantees the securities and has) equity securities listed on a UK regulated market.  Although, by definition, PVLBs will fall under the same prospectus and disclosure requirements as any other non-equity securities being admitted to trading on a UK regulated market, the ambition is that they benefit from a lighter distribution and marketing regime.

While the removal of additional retail-specific content and disclosure annexes (and requirements for summaries) from the PRM and the introduction of the PVLB concept are indeed indicative of an ambition to foster greater retail access, issuers should always be mindful that they remain under the overarching obligation to ensure that the prospectus contains all necessary information which is material to an investor for making an informed assessment of the assets and liabilities, profits and losses, financial position and prospects of the issuer and the rights attaching to the securities. 

As we transition to the new POATRs regime, we find issuers and other market participants asking particular questions around the impact of the new POATRs regime on existing debt issuance programmes (EMTN):

• New or tap issuances post-19 January 2026 under a pre-existing base prospectus that was approved pre-19 January 2026:  As part of the grandfathering of the previous UK PR regime, new or tap issuances under an existing base prospectus which was approved under the previous UK PR regime prior to 19 January 2026 (and which remains within its 12-month approval window and (where required) fully supplemented) may continue to be made under such a base prospectus using the applicable final terms.
• Post-19 January 2026 supplements to a pre-existing base prospectus that was approved pre-19 January 2026:  Similar to the above, the grandfathering of the previous UK PR regime means that the requirements for supplementing an existing base prospectus which was approved under the previous UK PR regime prior to 19 January 2026 (and which remains within its 12-month approval window) will continue to be governed under the UK PR regime.  That means that supplements should still be used for periodic financial information that issuers wish to incorporate by reference, and issuers may not avail themselves of the more flexible supplements regime for any non-material information.
• Market abuse and transparency: 
  • Issuers and other market participants are reminded that the introduction of the new POATRs regime does not materially alter the application of the requirements of the UK Market Abuse Regulation or related disclosure and transparency requirements.
  • However, in this regard, it is worth noting that the existing exemption under DTR 4.4.2R in respect of annual financial reporting (under DTR 4.1) and half-yearly financial reporting (under DTR 4.2) has expanded to include issuers of debt securities in denominations of at least €100,000 or an equivalent amount (as was previously the case) as well as SPV issuers of PVLBs. In other words, issuers of lower-denomination debt securities may only use this exemption if their securities are also classified as PVLBs.