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UK’s FCA makes case for ‘modernisation’ of listing regime

By Jenni Reid

11:13, 17 September 2021

FCA logo
Current system ‘stuck in 1984’ regulator says – Photo: FCA

The UK’s Financial Conduct Authority (FCA) has set out a case for making “fundamental changes” to the market to modernise the country’s listing regime.

This includes raising the minimum market cap for companies to list on the main market, a targeted form of dual class share structure in the premium segment and a lowering of the minimum free float level.

The FCA said it agreed with the Treasury’s moves to review the UK Prospectus Regulation “from the ground up”.

It will also look at the removal or reform of measures such as the significant transactions regime, the related party transactions rules and the controlling shareholder regime, and consider the value of London listing features like the sponsor regime.

The plans were outlined in a speech today by the FCA’s director of market oversight, Clare Cole.

Failure to change

Cole argued “the listing regime is still stuck in 1984” and “based on rules designed when we still stored data on a floppy disk”.

Cole said the system had failed to adjust in light of events including the financial crisis and subsequent bailouts, increased EU regulations, Brexit, the pandemic, the rise of fintech and cryptoassets, and an increased concern over environmental, social and governance issues.


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The FCA’s proposals follow a government review into why certain companies went public and what rules they found hindered the process, as well as why some chose to avoid a UK listing.

Initial changes to the UK market could be made before the end of the year.

Market moves

Raising the minimum market cap needed to list on the main market would ensure “companies are able to meet the requirements of the markets they are listed on and meet the expectations of the investors who are active on them,” Cole said.

“The UK is fortunate to have multiple markets that function well and provide a forum for both liquidity and transparency suitable for smaller companies,” Cole added.

Changes to dual class share structures and minimum free float levels would aim to create “a more welcoming environment for innovative companies so they will transition to public markets earlier”.

Cole finished by encouraging input on any consultations held into future changes.

Read more: FCA plans to simplify access to UK equity market listings

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