From Morningstar:
The City regulator has proposed rules to encourage companies to list on UK markets and improve the existing regime, building on consultations started in May. The proposed changes are designed to work alongside government efforts to enhance the appeal of UK stock markets. The aim is to make the UK’s listing regime more accessible, effective and competitive in response to Brexit’s impact, the legacy of the financial crisis, and the government’s push to loosen existing rules.
The Financial Conduct Authority’s (FCA) proposals, which include changes to the “bond market consolidated tape,” will impact how retail shareholders interact with the domestic market and how data and information are presented in the coming years. The FCA plans to simplify the listing regime with a single category and “streamlined” eligibility requirements, as well as a “disclosure-based” system aimed at putting sufficient information in the hands of investors.
Under the proposed new regime, “significant transactions” and related-party transactions will be subject to official disclosures, removing stumbling blocks related to mandatory votes on corporate actions. However, the plan has received pushback from commentators concerned about diluting shareholder rights and the potential creation of a permanent two-tier share structure.
Commentators, including those from investment management trade body The Investment Association, have expressed concerns that the proposed regulatory reforms may not strike the right balance between risk and investor protections. In November, the Chancellor disappointed some in the industry by not supporting a “British ISA” designed to attract capital to domestic companies, while others believe the opportunity to boost retail access to IPOs was missed in the review of listing rules.
The FCA’s proposals are criticized for missing an opportunity to support domestic retail investors, with calls for the forthcoming review of the prospectus regime in 2024 to put retail investors’ rights at its heart. Boosting retail investment on the stock exchange is seen as essential for wider market benefits and unlocking further capital for UK-listed companies.
Read more: UK Listing Regime Proposals Full of Red Flags, City…
