The Association for Financial Markets in Europe (AFME) welcomes the Financial Conduct Authority (FCA)’s final rules for a new, simplified and more competitive listing regime, aiming to boost growth and innovation on UK stock markets.

Commenting on the publication of the final rules, Gary Simmons, Managing Director of Equity Capital Markets at the Association for Financial Markets in Europe (AFME), said:

“The final rules in Policy Statement 24/5 set out a simplified listings regime with a single category and streamlined eligibility for those companies seeking to list their shares in the UK. We applaud the FCA on a bold overhaul of the current listing regime, which we believe, is a significant step towards increasing the attractiveness of the UK capital market and aligning the regime with international market standards.

The new regime features a more flexible, disclosure-based approach, representing a move towards economic growth and accommodating increased risk appetite within the market. The rules retain the sponsor role, but outline a recalibrated declaration requirement and will play an important role alongside the forthcoming changes to the public offers and admissions to trading regime this summer.

“We thank the FCA for the continued engagement over the past three years and we look forward to further engagement with the FCA as this develops.”

Source: AFME

FCA Overhauls UK Listing Rules

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 published rules, 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.’

Source: FCA