Thursday, July 25, 2024

Biggest overhaul of UK listing rules in three decades

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The Financial Conduct Authority has announced the biggest overhaul of listing rules in the UK for more than three decades.

They aim to support a wider range of companies to issue their shares on the UK’s stock markets amid competition from the United States and elsewhere.

The financial regulator has set out a simplified listings regime with a single category and streamlined eligibility for those companies seeking to list their shares in the UK. 

It says the overhaul better aligns the UK’s regime with international market standards and also ensures investors will have the information they need to make decisions about their money, while maintaining appropriate investor protections to hold the management of the companies they co-own to account.  

The new rules remove the need for votes on significant or related party transactions and offer flexibility around enhanced voting rights. Shareholder approval for key events, like reverse takeovers and decisions to take the company’s shares off an exchange, is still required.  

The changes to listing rules follow extensive engagement across the market. The FCA has been clear that the new rules involve allowing greater risk, but believes the changes set out will better reflect the risk appetite the economy needs to achieve growth. 

The new rules will apply from 29th July 2024. 

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“A thriving capital market is vital in delivering investment to growing companies plus returns and choice to investors,” said Sarah Pritchard, executive director, markets and international at the FCA.

“That’s why we are acting to make it more straightforward for those seeking to list in the UK, while retaining vital protections so investors can help steer the businesses they co-own.  

“Regulation is only part of the answer in helping the UK achieve sustainable growth. Other factors also play a significant role in influencing where a company decides to list. We’re committed to continually working together with all those who have a part to play in supporting a thriving UK capital market and thank everyone who has contributed to this work so far.”

Chancellor of the Exchequer Rachel Reeves said: “The financial services sector is central to the UK economy, and at the heart of this government’s growth mission.

“These new rules represent a significant first step towards reinvigorating our capital markets, bringing the UK in line with international counterparts and ensuring we attract the most innovative companies to list here.”

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