The FSA has published Consultation Paper 09/24: Listing regime review (CP09/24).

CP09/24 incorporates amendments to the Listing Rules and the FSA’s responses to comments on Consultation Paper 08/21: Amendments to the Listing Rules and feedback to DP08/1 (A review of the structure of the Listing Regime) (CP08/21). These changes relate to the restructuring of the Listing Regime with the primary objective of providing more clarity for all market participants.

In CP09/24 the FSA has included two areas for further consultation:

  • The first relates to the draft rule requiring overseas companies in the Premium segment to offer pre-emption rights to their shareholders. Whilst the FSA has formulated its policy on this issue, it is anxious to ensure that the rule as drafted is workable in practice and it is therefore seeking technical input from market participants on whether the rule achieves its policy objective effectively.
  • The second relates to the draft rule changes in respect of a clarification that equity securities with a Standard Listing must be admitted to trading on a Regulated Market.

The deadline for comments on these two areas is 2 December 2009.

The FSA also reports that CP08/21 was well received. Having considered the feedback from the market, the FSA has introduced amendments to:

  • Restructure the regime into two segments, Premium and Standard - the former denoting the more stringent super-equivalent standards and the latter, EU minimum standards.
  • Strengthen the corporate governance standards for overseas companies by requiring overseas Premium Listed companies to ‘comply or explain’ against the UK Combined Code.
  • Require overseas Standard Listed companies to comply with the EU Company Reporting Directive which requires them, among other things, to provide a corporate governance statement and to describe the main features of their internal control and risk management systems.
  • Make the Standard Listing segment, which is only currently for overseas companies, available to UK companies in order to provide a level playing field.
  • Simplify the process for companies with equity listing wishing to move from one segment to another by clarifying that a cancellation of their listing is not required.

The FSA stated in CP08/21 that it would provide market participants with sufficient notice to enable them to implement the proposals and, as such, the effective date of the new rules is 6 April 2010. However, the FSA has decided to bring forward the timetable for making the Standard segment available to UK companies, so that the rule changes to implement this will be effective from 6 October 2009.

The FSA also states that it is carrying out an exercise to allocate all securities to the relevant listing category. This exercise will require a separate consultation to accommodate necessary rule changes. The FSA envisages that this consultation will be issued in mid-November 2009, with a short period for receiving responses of approximately six weeks, so that all necessary rule changes can be made well before the final implementation date of April 2010.

View Consultation Paper 09/24: Listing regime review, 2 October 2009