The UK Financial Conduct Authority has announced new rules for listing on the country's stock market, including the London Stock Exchange. Liga.net writes about this.
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The rules are changing for the first time in 30 years
The new rules are the biggest changes to the listing regime in the last three decades, the British regulator noted. They aim to support a wider range of companies to list their shares on UK stock exchanges, thereby “expanding opportunities for investors.”
The financial services sector plays a central role in the UK economy and is at the heart of the government's mission to deliver growth, said new Chancellor of the Exchequer Rachel Reeves.
“These new rules are an important first step towards revitalizing our capital markets, bringing the UK on par with international peers and ensuring that we attract the most innovative companies to list here,” she said.
What changes
The updated rules will abolish the two-tier listing system – “standard” and “premium”. From 29 July there will be one general category for listing shares – “commercial companies”.
Premium listing imposed additional requirements on the company in exchange for a more prestigious label and entry into the FTSE-branded indices. The end of the premium means that companies will no longer have to hold shareholder votes before approving large mergers or acquisitions.
Some rules regarding listing eligibility will also change. For example, the requirement for companies to report their income will be scrapped.
Britain is losing companies
The new rules come at a time when the European listing market, including the UK, has collapsed. Large tech companies have recently been favoring US stock exchanges.
The number of companies listed in the UK has fallen by around 40% since its recent peak in 2008, according to the UK Listing Review. From 2015 to 2020, it accounted for only 5% of initial public offerings (IPOs) in the world.
- Shares (securities) Stock market