27 May 2022

FCA planning reform of the listing regime to boost growth and competitiveness

The FCA has set out an ambitious vision for potential reform to the way companies list in the UK that aims to attract more high quality, growth companies and give investors greater opportunities.

In a paper published today, the FCA is continuing its discussion on how it can make the listing regime, the rules companies must follow to be allowed to list their shares in the UK, more effective, easier to understand and more competitive.    

Under one of the FCA’s suggestions, companies wishing to list in the UK would no longer have to choose between two different segments with different branding and standards. 

Instead, all listed companies would need to meet one set of criteria and could then choose to opt into a further set of obligations. These would be focussed on enhancing shareholder engagement and be overseen by the FCA.   

Feedback to the FCA’s earlier discussion paper, suggested many were keen to keep these additional safeguards. Companies and their shareholders would decide for themselves whether these additional obligations were right for them. 

Last year, the FCA moved quickly to improve the listing regime by lowering free float levels, allowing certain forms of dual class share structures and introducing digital financial reporting.  

These changes promote broader access to listing for a wider range of companies at an earlier stage in their development and help investors use data faster to improve decision-making, while maintaining high standards. 

Clare Cole, Director of Market Oversight at the FCA, said: 

‘The London market is trusted the world over by companies looking to raise capital and those wishing to invest in them.  

‘That trust is created by strong standards and a world-leading concentration of buyers, sellers and the advisers who support them. 

‘The rules for companies who want to list here have not changed since the 1980s. Now is a good time to have an open conversation to make sure our rules are fit for the future, so we have a more accessible, competitive and growing market that is attractive to a diverse range of companies.’ 

Last year, was the best year for raising investment for listed companies since 2007. In all £16.9 billion was raised in UK Initial Public Offerings (IPOs) including 126 companies listing on the London Stock Exchange.  The FCA is aiming to build on this success. 

Notes to editors 

1. Read Primary Markets Effectiveness Review: Feedback to the discussion of the purpose of the listing regime and further discussion (PDF) 
2. The discussion period is open for nine weeks, closing on 28 July 2022. 
3. According to the UK Listing Review, the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008. Between 2015 and 2020, the UK accounted for only 5% of IPOs globally. 
4. The FCA has already published final rules on some of the recommendations from Lord Hill’s UK Listing Review and the Kalifa Review on UK fintech. Read PS21/22: Primary Market Effectiveness Review: Feedback and final changes to the Listing Rules. 
5. The UK Listing Review, Chaired by Lord Hill, also made a recommendation to the FCA to consider changes to the Listing Rules in relation to SPACs in its final report published on 3 March 2021. The FCA published final rules on strengthening investor protections in SPACs in July 2021. 

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