FCA launches consultation on reforms to UK primary markets
05 July 2021 United Kingdom
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The Financial Conduct Authority (FCA) has proposed changes to the UK listing regime designed to widen investor access to growth-sector companies.
These changes aim to lower barriers to listing for companies and to extend the choice of investment opportunities in UK public markets.
The FCA intends also to simplify its rulebook, while safeguarding standards of investor protection and corporate governance.
The financial regulator has today launched consultation on these proposed changes, which include plans for dual class share structures in the premium listing segment and lowering the required free float from 25 per cent to 10 per cent in certain conditions.
The FCA says that these proposals are a response to the changing nature of companies coming to market, as well as a step to ensure the UK remains a dynamic and competitive primary market.
The proposals follow on the back of recommendations from the UK Listing Review and the Kalifa Review of UK fintech, which both advised changes to improve the listings regime as a gateway to the UK’s major public markets.
The introduction of a targeted form of dual class share structure within the premium listing segment is designed to encourage innovative, often founder-led companies, to list on the public markets at an earlier stage.
By lowering the percentage of shares that a company must place in public hands, the FCA intends to reduce obstacles to listing embedded in the current regime and to widen investment choices for UK investors.
However, the FCA also proposes raising the minimum market capitalisation of ordinary commercial companies in the premium and standard listing segments from £700,000 to £50 million to enhance investor confidence and investor protection.
More broadly, the regulator has requested feedback on the current structure of the UK listings regime and whether other reforms are desirable to improve its long-term effectiveness.
The consultation process will be open for 10 weeks and will close on 14 September.
“Our proposals should result in a wider range of listings in the UK and increased choice for investors while we continue to ensure appropriate levels of investor protection,” says FCA director of market oversight Clare Cole.
These changes aim to lower barriers to listing for companies and to extend the choice of investment opportunities in UK public markets.
The FCA intends also to simplify its rulebook, while safeguarding standards of investor protection and corporate governance.
The financial regulator has today launched consultation on these proposed changes, which include plans for dual class share structures in the premium listing segment and lowering the required free float from 25 per cent to 10 per cent in certain conditions.
The FCA says that these proposals are a response to the changing nature of companies coming to market, as well as a step to ensure the UK remains a dynamic and competitive primary market.
The proposals follow on the back of recommendations from the UK Listing Review and the Kalifa Review of UK fintech, which both advised changes to improve the listings regime as a gateway to the UK’s major public markets.
The introduction of a targeted form of dual class share structure within the premium listing segment is designed to encourage innovative, often founder-led companies, to list on the public markets at an earlier stage.
By lowering the percentage of shares that a company must place in public hands, the FCA intends to reduce obstacles to listing embedded in the current regime and to widen investment choices for UK investors.
However, the FCA also proposes raising the minimum market capitalisation of ordinary commercial companies in the premium and standard listing segments from £700,000 to £50 million to enhance investor confidence and investor protection.
More broadly, the regulator has requested feedback on the current structure of the UK listings regime and whether other reforms are desirable to improve its long-term effectiveness.
The consultation process will be open for 10 weeks and will close on 14 September.
“Our proposals should result in a wider range of listings in the UK and increased choice for investors while we continue to ensure appropriate levels of investor protection,” says FCA director of market oversight Clare Cole.
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