From Morningstar:

The Financial Conduct Authority (FCA) is proposing changes to the UK’s listing regime that will affect retail investors. The changes will impact shareholder voting, UK listing rules, dual share classes, and founder influence. While it may seem abstract, these changes will ultimately shape how investors interact with their holdings.

Under the FCA’s proposals, investors will lose some voting rights but will be provided with more information. The FCA aims to put more information in the hands of investors to influence company behavior and investment decisions. This has sparked criticism from platforms like Hargreaves Lansdown and industry body The Investment Association.

The proposed changes will merge the hierarchy of listings to reduce red tape for companies and provide less stringent regulatory scrutiny. This could lead to more deals and takeover attempts for UK companies. The FCA hopes these changes will create greater opportunities for investors while still maintaining high standards of disclosure.

The topic of dual share classes is also addressed in the proposals, with firms still being able to create dual or multiple share classes upon admission to the stock exchange. This issue becomes relevant in situations where a struggling company faces a takeover. Additionally, founder influence is highlighted as a risk for investors in high-growth companies.

The changes are still being consulted on and are likely to come into effect this year. While some elements will stay the same, investors may lose some of their rights. The FCA believes this rebalancing of risk is necessary for creating a better marketplace, and it will be interesting to see the impact of these changes on the City in the coming years.



Read more: Are You Ready For The Big Listings Overhaul?