06 September 2024

The FCA’s new listing rules and what's to come

After undertaking the biggest change to the listing rules in over three decades, we followed up weeks later with a package of measures to further boost the UK’s position as a global and vibrant financial centre... Success is measured in the long-term economic growth of UK capital markets.

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Likewise for capital markets, it's not about one individual player. It’s about the entire ecosystem coming together so participants can compete, grow and achieve the best results. And for the greater good of a thriving economy.

With your support, we continue to deliver on our ambitious programme of work to strengthen the UK’s position in global wholesale markets.

While we have crossed many milestones, we are not finished yet. Like a long-distance runner attempting to complete the six major marathons across the world to receive the coveted six-star medal, we have many races to come.

Listings reform

Regulation has a role to play in making sure UK capital markets are race fit. That is why we have undertaken the biggest change to the listing rules in over three decades. 

It is now exactly 6 weeks since our FCA overhauls listing rules to boost growth and innovation on UK stock markets">new listing rules became operational on 29 July.

Over the years the rules governing listed companies in the UK had grown in reach and complexity. With fewer people taking advantage of those complex rules.

Taken as a package, and in light of market evolution, we were told that the regime created disproportionate burdens and restrictions on companies with ambitions to innovate and grow.

Some went so far as to say that listing in the UK was being lost as a consideration. The regime was just too complex with too many barriers. And in the low-interest rate environment, private equity markets were racing ahead. Maintaining the status quo wasn’t an option if we wanted to reverse long-term decline. But it wasn’t easy either.

That’s why we engaged extensively with all parts of the market to listen to all views. Our aim throughout was to start an inclusive and thorough debate to make sure all voices were heard.

We tried to build consensus as much as possible rather than compromise on everything. That can result in decisions no one supports.

And we sought consensus through a discussion on risk appetite – to inform the decisions we have now made which we hope will support capital markets for decades to come.

We looked at our regime holistically and determined that a change in philosophy was needed – moving towards a more disclosure-based regime, which puts the right information in the hands of investors so they can make their own decisions.

This is a better approach for modern markets. It recognises that investors make their own decisions, daily, on where, how and what to invest in.

We concluded that a 'one size fits all' regulator-prescribed approach, written in 2024, would not provide sufficient flexibility for the range of companies who may wish to list. And risks becoming out of date very quickly.

The new rules introduce a simplified regime that maintains high standards, one that is right for the UK, compares well internationally and one which we hope will help boost UK stock markets.

Companies listed in the UK will still be expected to uphold high standards regarding disclosure and corporate governance. And shareholders retain the ability to exercise good stewardship to influence company behaviour and hold the management of the companies they co-own to account.

These remain important and longstanding pillars of the UK markets. We want investors in UK listed markets to have access to timely and appropriate disclosures to make informed investment choices, in a more diverse market of opportunities. ...

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