The FCAs plans to make it easier for companies to issue smaller bonds are a step in the right direction, but if the UK truly wants to unlock its corporate bond market for retail investors, more must be done, says Tim Focas

The Financial Conduct Authority’s (FCA) plans to cut red tape around the corporate bond market are a step in the right direction. By making life easier for companies to issue smaller bonds, the regulator is leaving the door at least slightly ajar for retail investors to access an asset class that has long been only open to the big financial institutions.

This is welcome news. The UK has lagged behind the US and even parts of Europe in democratising access to corporate bonds. As Barclays recently pointed out, US retail investors held a staggering $6.2 trillion in debt securities by the end of last year, while the UK’s retail bond market remains minuscule in comparison. The FCA’s reforms are designed to change this, but while their intentions are sound, the proposals do not go far enough. If the UK is serious about boosting its corporate bond market, additional measures are imperative.

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