Financial Reporting Council Updates Position on Capital Restructuring at UK Audit Firms

News types:

Published: 25 March 2025

The Financial Reporting Council (FRC) has today published an updated letter regarding its approach to capital restructuring at UK audit firms.

The update to the letter, originally issued in September 2024, provides further clarity on the FRC's position amid continued market interest in this topic.

In the updated letter, the FRC reaffirms that while ownership structures remain a matter for the firms themselves, the regulator is not opposed in principle to capital restructuring in the UK audit market. The FRC acknowledges that such restructuring could, under the right circumstances, generate additional investment to enhance audit quality and potentially drive innovation, choice and growth across the sector.

The letter emphasises that audit firms considering capital restructuring should engage with the FRC at an early stage, with assurance that all discussions will be treated in the strictest confidence. The FRC has also extended an invitation to engage directly with potential investors or parties considering new capital structures in the UK audit market.

The updated letter is available on the FRC website.