The Financial Conduct Authority is proposing an amendment to the UK listing regime that would create a new premium listing category for companies controlled by a shareholder that is a sovereign country.
A consultation paper on the proposal, which would see the new listing available to commercial companies, was launched this morning by the authority. The proposal aims to enable companies which may be the subject of major privatisation transactions to choose the higher standards of premium listing, rather than standard listing.
- February, the FCA launched a discussion paper to assess the role of listed primary markets as an important component of the broader capital markets landscape, and the structure of the UK listing regime in supporting that role. While the work on that review continues, the authority said it is bringing forward the proposed changes to the premium listing regime ahead of other possible proposals arising from the review.
“Regulatory protections for investors lie at the core of the listing regime,” Andrew Bailey, FCA chief executive, said. “However, it is important that these protections remain well-targeted. Refining the listing regime in this way would make UK markets more accessible while ensuring that the protections afforded by our premium listing regime are focused and proportionate.
“Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature. Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries.”
The new premium listing category would include the “full suite of investor protection” applicable to companies in the existing premium listing category, with two modifications. The related party rules would operate on a modified basis, with the sovereign controlling shareholder not considered a related party for the purposes of the UK listing rules, and the controlling shareholder rules will not apply to companies in the new category in respect of the sovereign controlling shareholder.
The “highly targeted modifications to the regime recognise that sovereign countries are different from private sector entities,” the FCA said in a statement. The new listing category will also be open to companies who want the listing of their interests in their equity to be in the form of Depositary Receipts (DRs), it said.
The FCA review that launched in February will continue, with feedback summarised in “due course,” along with detailed proposals for reforms should the authority consider those desirable.
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