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United Kingdom
United Kingdom
Key definition
Underwriting definition What does Underwriting mean? In capital markets practice, underwriting is the contractual commitment by one or more banks or brokers (the underwriters) to subscribe for, or procure subscribers for, any shares or other securities not taken up by investors in an offer, at an agreed price and by a specified closing date. It gives the issuer funding certainty in IPOs, rights issues, open offers and secondary placings, in return for an underwriting commission. The term is a market expression rather than a defined statutory term, although payment of underwriting commission is permitted subject to disclosure and constitutional authority (for example under the UK Companies...
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Underwriting UK public limited company share offers: key agreements, sub-underwriting, Companies Act 2006 commission limits, and standby underwriting
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Practice notes
STOP PRESS : Significant reforms to the UK prospectus regime came into force on 19 January 2026.
The rules now governing public offers of securities and admissions to trading in the UK are set out chiefly in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs) and the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market (PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules have been repealed. These reforms aim to streamline capital raising and materially cut the instances when a company must publish an FCA approved prospectus for a further issue of shares. For full details of the changes, see Practice Note: UK prospectus regime reform. This Practice Note reflects the prospectus regime in force before 19 January 2026. This Practice Note considers the underwriting of an offer of shares by a public limited company, including:
- how an underwriting is documented,
- the company's power to pay the underwriter's commission,
- sub-underwriting,
- and standby underwriting
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Web page updated on 22/05/2026
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