On 20 April 2026, the Financial Conduct Authority (FCA) published its findings following its analysis of the impact of market soundings on market quality in equity capital market (ECM) transactions in UK listed shares.
Background
The FCA explained that market soundings help determine interest in a transaction before it is announced and support price discovery, and that it conducted this work as it wanted a more representative view of whether market soundings were affecting market quality.
As a result, the FCA asked five banks active in ECM for their UK equity and equity-linked transactions over £50 million between January 2023 and June 2025 where they acted as a bookrunner and then combined this with order book data and transaction reporting data that the FCA already held.
Summary
The FCA set out some key findings including:
- Trading volumes fell by an average of 13% during the market sounding period but the FCA did not observe material impacts on our other market quality metrics, such as effective and quoted spread and market depth.
- Firms completed transactions across a wide range of sizes, indicating that the UK equity markets have the liquidity to absorb substantial transactions.
- On average, 33 investors were sounded but in one transaction this was as high as 90, in particular the accelerated book builds that achieved high coverage from the sounding after approaching an above average number of market sounding recipients (MSRs) did not meaningfully grow in overall demand or oversubscription after launch.
- The FCA don’t prescribe the number of MSRs that can be market sounded but remind firms that the risk of inside information leaking may increase as the scale of a market sounding grows (for example, approaching a greater number of MSRs or a longer market sounding exercise).
- As a result, firms may wish to consider whether their policies and procedures appropriately consider the scale of their market soundings.