The UK's Financial Conduct Authority (FCA) 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.
In a statement today (11 July), the regulator said the overhaul of listing rules better aligns the UK’s regime with international market standards.
It would also ensure investors 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 29 July 2024.
Sarah Pritchard, executive director, markets and international, at the FCA said: “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 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.”
In reaction, Tom Lee, head of trading proposition, Hargreaves Lansdown said: “A successful listings regime which supports our home market is essential. However, making the UK an attractive place to list has to be balanced with rights for shareholders and ensuring that the quality of the market is not diluted. We will watch closely as these new rules embed, we have been concerned that the plan to remove shareholder votes on significant and related party transactions would dilute investors’ rights.
"As we look forward to further regulatory change planned, we are keen that retail access to IPOs and secondary capital raising rounds are at the heart of changes. The current regime is a barrier to retail investment. At the recent Raspberry Pi IPO we were significantly over subscribed.
"The demand from retail investors to buy into the equities market is there, and regulatory change should support this demand. Boosting retail investment on the stock exchange will have wider market benefits providing depth and liquidity, as well as boosting interest in investment with the wider public, unlocking further capital for UK-listed companies.
"Building an understanding of how investment plays a part in long-term financial resilience is essential.”
