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FCA overhauls listing rules to boost growth and innovation on UK stock markets

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The Financial Conduct Authority (FCA) writes that in new rules, it 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. 

The overhaul of listing rules better aligns the UK’s regime with international market standards, the FCA writes. “It 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 says that it 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 29 July 2024.

Sarah Pritchard, Executive Director, Markets and International, at the FCA says: “A thriving capital market is vital in delivering investment to growing companies plus returns and choice to investors. 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 says: “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.”

Nick Davis, Senior Partner at Memery Crystal, says: “This is the first step in the biggest shake-up of the UK listing regime for 30 years and, after a challenging couple of years for our markets, is a positive move towards making the UK a more appealing listing destination. In particular, the new International Secondary Listing category is a clear sign that London welcomes overseas companies already listed elsewhere to tap into the UK’s investor base without having to follow excessive additional disclosure obligations. We welcome the changes and are optimistic that the markets will reap the rewards.”

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