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The new rules are the biggest changes to the listing regime in over 3 decades. They aim to support a wider range of companies to issue their shares on a UK exchange, increasing opportunities for investors.
In rules published today, the 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.
The overhaul of listing rules better aligns the UK’s regime with international market standards. 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 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.'
Notes to editors
Read the Policy Statement.
The rules will go live on 29 July 2024 following a short implementation period. We considered all the feedback received and have proceeded to finalise the implementation in line with the timeframes and approach consulted previously. We believe this timeline will enable the benefits of the reforms to be realised as soon as possible.
According to the UK Listing Review, the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008. Between 2015 and 2020, the UK accounted for only 5% of Initial Public Offerings (IPOs) globally.
The FCA has already published final rules on some of the recommendations from Lord Hill’s UK Listing Review and the Kalifa Review on UK fintech. Read PS21/22: Primary Market Effectiveness Review: Feedback and final changes to the Listing Rules.
TheUK Listing Review, Chaired by Lord Hill, also made a recommendation to the FCA to consider changes to the Listing Rules in relation to SPACs (Special Purpose Acquisition Companies) in its final report published on 3 March 2021. The FCA publishedfinal rules on strengthening investor protections in SPACs in July 2021 andfeedback to our discussion document in May 2022.
The new rules support the FCA’s primary objective to protect consumers and markets, as well as its secondary objective to promote competition.
As well as complying with the new regime, companies must also continue to have corporate governance in place and engage with their shareholders.
Changes to the Official List will start to appear from 26 July 2024 ahead of the implementation date of 29 July 2024.
The date of publication of this Policy Statement and the UK Listing Rules Instrument 2024 (FCA 2024/23) is 11 July 2024. An applicant for the admission of securities that has made a complete submission to the FCA for an eligibility review for listing by 4:00pm on 11 July 2024 will (where the securities have not been admitted to listing prior to 29 July 2024) be treated as an ‘in-flight applicant’ under the UK Listing Rules Instrument.
Find out more information about the FCA.
https://www.fca.org.uk/news/press-re...-stock-markets
