ABSTRACT
This chapter deals with the way in which public companies raise capital by issuing shares in the securities markets. Private companies are precluded from issuing shares and bonds to the public. United Kingdom securities regulation is based on EU Directives that set out the high-level principles on which securities regulation across the EU is based, and on technical regulations generated by the Commission that provide for the detailed rules governing securities markets. Therefore, the 'Lamfalussy methodology' was introduced in 2001, which provided both that directives should only create general principles and that the Commission should produce detailed regulations, and that a Committee of European Securities Regulators (CESR) should be created to co-ordinate regulation across the EU. This methodology was tightened by the Larosiere Report in the wake of the global financial crisis. The European Securities Markets Authority (ESMA) now acts as the collective body in which national securities regulators meet.
