In December 2008, the Financial Services Authority published a consultation paper on proposed amendments to the Listing Rules. The consultation paper follows on from the FSA's January 2008 discussion paper entitled 'A review of the structure of the Listing Regime' and feedback received from market participants.
The FSA's key objective for undertaking its review was to explore how the structure of the Listing Regime can best contribute to striking an appropriate balance between the objectives of investor protection and ensuring that the UK Listing Regime remains competitive in a continuously evolving global markets environment.
The following is a brief overview of some of the key proposals contained in the consultation paper:
- Re-labelling the two-tier Listing Regime – whilst the existing two-tier Listing Regime will be retained the FSA propose to re-label the existing Primary and Secondary Listings as Premium and Standard Listings respectively. The Premium Listing regime will continue to be super-equivalent to EU Directive minimum requirements. The Standard Listing regime will continue to apply EU Directive minimum requirements.
- 'Secondary Listing' for UK companies – it is proposed that the Secondary Listing regime set out in Chapter 14 of the Listing Rules (which is currently only available to overseas companies) be opened up to UK companies. This would enable UK companies to obtain a Secondary Listing (labelled differently) applying the EU Directive minimum requirements.
- Corporate governance and pre-emption rights – while the FSA does not consider it appropriate to extend the UK corporate governance regime to overseas companies, it does propose to amend the corporate governance disclosure requirements for overseas companies with a Primary Listing to make them more meaningful. Similarly, it is proposed that overseas companies with a Primary Listing be required to disclose whether or not they offer pre-emption rights.
- Mechanism for migrating between Listing segments – as stated above, under the proposed changes the FSA will retain the existing two-tier segments of the UK Listing Regime re-labelling them Premium and Standard Listings. These two segments will be sub-divided into sub-segments (called Listing Categories) relating to the type of company and securities that are being listed. The FSA's proposals include a new migration mechanism for companies with a listing of equity securities to transfer to another type of listing without necessitating a cancellation and re-listing.
Comments on the proposed amendments to the Listing Rules should be submitted by 1 March 2009. The FSA has indicated that it aims to provide feedback on this consultation paper by the summer of 2009.
View the Consultation Paper (72 page pdf).