The Financial Conduct Authority (FCA) published a multi-firm analysis of whether market soundings affect market quality around equity capital market transactions in UK-listed shares. Using information from five active equity capital markets banks and FCA-held order book and transaction reporting data, the FCA found that trading volumes fell by an average of 13% during market sounding periods, while other market quality measures showed no material impact. The review covered 63 equity and equity-linked transactions over GBP 50 million between January 2023 and June 2025, with 90% involving market soundings, and focused its market quality assessment on 50 accelerated bookbuilds (ABBs) worth around GBP 32 billion. Volume fell in 70% of cases and the difference was statistically significant versus several control groups, while spreads moved by one basis point or less and depth fell by 1% to 2% on average, neither of which was deemed meaningful; the FCA also did not identify consistent evidence of unusual price behaviour or broader “market cleanliness” issues, aside from isolated cases it has already explored. Across ABBs, an average of 33 investors were sounded across the syndicate, with one exercise involving 87 investors, and deals that approached above-average numbers of market sounding recipients did not see a meaningful increase in overall demand or oversubscription after launch. The FCA does not prescribe how many investors can be sounded under the UK Market Abuse Regulation (UK MAR) but highlighted that leakage risk may increase as the scale or duration of a sounding grows and noted that firms may wish to assess whether their policies and procedures appropriately reflect that. The FCA will continue engaging with banks and other market participants on market soundings and, where appropriate, examine approaches and controls through supervisory work. It also gathered views on Article 11 of UK MAR, with most banks viewing the regime as clear but suggesting possible improvements including closer alignment with the EU market sounding regime and a reduction in record-keeping burden, which the FCA will consider in any future UK MAR changes.
Financial Conduct Authority 2026-04-13
Financial Conduct Authority analysis finds market soundings in UK equity transactions reduce trading volumes without material spread or depth effects
The Financial Conduct Authority’s multi-firm analysis found that market soundings around UK equity capital market transactions are associated with an average 13% fall in trading volumes but no material impact on spreads, depth or market cleanliness. Reviewing 63 transactions over GBP 50 million, mainly 50 accelerated bookbuilds worth about GBP 32 billion, it also found that sounding more investors did not meaningfully increase demand and highlighted greater leakage risks as soundings scale. The FCA will continue supervisory engagement and consider feedback on possible changes to Article 11 of the UK Market Abuse Regulation, including closer EU alignment and reduced record-keeping.