The UK’s financial watchdog is set to enforce new rules overhauling the public markets in what it claims is the “biggest change to the listing regime in over three decades”.
The Financial Conduct Authority (FCA) said it was setting out a “simplified listings regime” with a single category and “streamlined eligibility” for firms seeking to list shares in the UK.
Under the new rules, listed companies will no longer require votes on significant transactions and will have greater flexibility in voting rights policy.
Shareholder approval will still be required for key events such as reverse takeovers and decisions to take shares off an exchange.
The rules will come into force on 29 July this year after a brief implementation period, starting today. Changes to the FCA’s official list of company prospectuses will start to appear from 26 July.
“A thriving capital market is vital in delivering investment to growing companies plus returns and choice to investors,” said Sarah Pritchard, executive director of markets and international at the FCA.
“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.”
Pritchard said the regulatory overhaul is only “part of the answer” to achieving sustainable economic growth and that “other factors” that influence a company’s listing destination must be addressed.
The change comes in response to calls to reform the UK public markets amid concerns it lacks competitiveness, losing out on major listings like Arm and Imagination.
The FCA said it took extensive recommendations for the rule changes, including from Lord Hill’s Listing Review and the Kalifa Review on UK Fintech.
The Listing Review found that the number of listed companies in the UK has fallen by about 40% since 2008. The review also noted that between 2015 and 2020, the UK accounted for just 5% of global IPOs.
Chancellor 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.”