The Financial Conduct Authority (FCA) has published its updated listing rules in an effort to support a wider range of companies to issue their shares on a UK exchange and increase opportunities for investors.

It has set out a simplified listings regime with a single category and ‘streamlined eligibility’ for companies looking to list their shares in the UK, aiming to better align the UK’s regime with international market standards.

Furthermore, the watchdog said the new rules will ensure that investors, such as pension schemes, will have the information they need to make decisions, while maintaining ‘appropriate’ investor protections to hold the management of the companies they co-own to account.

The updated rules will remove the need for votes on ‘significant or related party’ transactions and aim to offer flexibility around enhanced voting rights.

Shareholder approval for ‘key’ events, such as reverse takeovers and decisions to take the company’s shares off an exchange, will still be required.

The FCA said it had been clear that the new rules involve allowing greater risk, but it believed that the changes would better reflect the risk appetite the economy needed to achieve growth.

The new rules will take effect from 29 July 2024 and will see the removal of the FCA’s ‘premium’ and ‘standard’ listing segments in favour of a new commercial companies category for equity shares.

Commenting on the updated rules, FCA executive director, markets and international, Sarah Pritchard, 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.”

However, Railpen acting head of sustainable ownership, Caroline Escott, said the firm was “deeply disappointed” with the final listing rules.

“UK pension schemes naturally want thriving UK capital markets,” she noted. “As such, we are deeply disappointed with the final UK listing rules and feel an opportunity has been lost to truly make UK capital markets an environment where all the parties necessary to creating long-term value can cooperate and have a voice.

“We presented compelling evidence in support of the benefits of robust investor protections, both to the UK as a global financial centre, and to outcomes for everyday savers. It is a shame that this evidence, and the widely-held concerns of investors and consumer representatives, have not been heeded.

“We are pleased the FCA is open to our suggestion of class-by-class vote disclosure at companies with dual-class share structures (DCSS). This information would be useful to boards and investors in helping them understand the independent shareholder perspective on material issues. The methodology for doing so will need to be carefully considered, and we look forward to working with the FCA and others on this.”

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