UK bolsters company debt market to fend off Dublin, Luxembourg

By Huw Jones LONDON (Reuters) - Britain's financial watchdog on Wednesday announced improvements to how companies raise funds from listing debt, saying further changes may be needed to catch up with Luxembourg and Dublin. The package of measures from the Financial Conduct Authority (FCA) aims to make listing of company debt securities for institutional investors more "user friendly" while maintaining high standards to protect investors. The measures will be implemented in the coming weeks and include extending the FCA's "same day" service for reviewing routine prospectus supplements, more help for overseas issuers, and other ways to speed up and simplify the listing. "These proposals have done just that and we are confident that they are measures the industry will welcome and wishes to see," FCA acting Chief Executive Tracey McDermott said in a statement. The move dovetails with the European Union's capital markets union project to encourage companies to raise more funds on markets rather than relying on banks which are struggling to fashion sustainable business models. "The government is determined to maintain the UK's position as the premier global financial centre," Harriett Baldwin, Britain's financial services minister, said. "The new initiatives reinforce the UK's position as setting the standard for world-class listing and advisory services." The FCA had set up a market participants forum to help devise the package. "In order to identify these measures, the early sessions of the forum sought to explore perceived problems with the UK debt listing regime," the FCA said. Galina Dimitrova, director of capital markets at the Investment Association trade body and a member of the forum, said the watchdog's "firm and tangible recommendations could go a long way to improving the UK's primary debt markets". Figures from EU regulators showed that Britain's share of total prospectus approvals across debt and equity markets fell to 12 percent in 2014 from 20 percent in 2010. Forum members said Britain's Professional Securities Market (PSM) for listing debt does not offer the range of options seen at rivals in Dublin and Luxembourg. Dublin's Global Exchange Market (GEM) and EuroMTF in Luxembourg allow exemptions from the EU's rules on prospectuses and now attract significant amounts of issuance, the FCA said. GEM hosts nearly 9,000 securities, with over 3,000 on EuroMTF, while there are fewer than 400 debt securities on PSM. There could be a "potential gap" in Britain's market infrastructure, and this will be looked at in a broader review of the effectiveness of Britain's listing regime, the watchdog said. (Editing by Ed Osmond, editing by Louise Heavens)