Panoramic view of Dragon’s Border sign and City of London (capital’s financial district) skyline as the Bank of England raises UK interest rates to 4%.
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Britain’s Financial Conduct Authority on Thursday announced new rules for the country’s stock market listings in a bid to boost economic growth after a slowdown in initial public offerings.
The FCA said in a statement that the new rules, which will come into effect on July 29, will ensure that the UK’s listing regime is more consistent with those in other markets and will make it simpler and streamlined.
The FCA said the measures marked the biggest changes to the listing regime in more than three decades. The regulator added: “Their aim is to support a wider range of companies to issue shares on UK exchanges, increasing opportunities for investors.”
One key change is the removal of the “Advanced” and “Standard” checklist sections. Instead, there will be an entire category of stock listings known as “commercial companies.”
Sarah Pritchard, FCA’s executive director of markets and international, told CNBC’s “Squawk Box Europe” on Thursday that this “should simplify the process significantly.”
Previously, she said, there were complexities between the two categories that were not well understood in the standard listing segment.
“We received overwhelming feedback and support from all aspects of the market about the need to simplify and move to a simpler category,” Pritchard explained.
Advanced listings used to have additional requirements compared to standard listings. Some of these will be carried over and applied to all lists, while others have been deprecated.
“The new rules remove the need to vote on major transactions or related-party transactions and provide flexibility for enhanced voting rights. Key events, such as reverse takeovers and decisions to remove a company’s shares from the exchange, will still require shareholders to approved,” the FCA said.
Some rules regarding listing eligibility will also change, such as removing the requirement for companies to provide revenue tracking records.
Chris Haynes, a corporate partner at law firm Gibson Dunn, told CNBC in emailed comments that the rules were a positive move for the UK IPO market but could have gone further.
He said: “The move to a single listing category with simplified eligibility criteria, together with ongoing disclosure-based obligations, is one of a number of important initiatives that together should lead to more UK IPO activity.”
Haynes added: “I think there are areas where the FCA could create more flexibility, such as the dual-class share structure, but overall it’s a good outcome.”
The new rules come as European listings, particularly those in the UK, are already in decline. dejectedly. Major tech companies have recently favored US listings, including the UK Chip designer Arm Last year it chose to list on NASDAQ in New York.
euronext report Last year, the number of stocks listed on its platform was 64, a significant decrease. from 2022 will welcome 83 listed companies.
The new rules come in response to the 2021 UK Listing Review Report, which showed that the number of UK listed companies has fallen by about 40% since 2008, while only 5% of global IPOs took place in the UK between 2015 and 2020.
