The FSA is consulting on proposed changes to the Listing Rules that will result from the implementation of the Alternative Investment Fund Managers Directive in the UK.The consultation closed on 2 January 2013 and a report is due to be published in the Spring.
The AIFMD is due to be transposed into national law by 22 July 2013. It will be implemented by a combination of Treasury Regulations and FSA (FCA) rules.
The potential changes that may arise include:
Optimising the entry criteria to the Premium segment so as to maintain the strength of the Premium Listing brand:
- implementing the concept of a controlling shareholder and requiring that an agreement is put in place to regulate the relationship between such a shareholder and the listed company;
- insisting on a majority of independent directors on the board where a controlling shareholder exists; and
- prohibiting certain voting arrangements which lower investor protection within the premium segment.
Ensuring that the eligibility requirements continue to apply as meaningful on-going obligations:
- requiring a premium listed issuer to notify the FSA when it is not in compliance with its on-going obligations;
- introducing a new dual voting requirement for the election of independent directors;• providing guidance on what constitutes an independent business that is eligible for premium listing;
- clarifying the requirement for an applicant to control the majority of its business and providing guidance regarding areas where such control may not exist;
- mandating the content of a relationship agreement and requiring that it is adhered to on an on-going basis; and
- empowering independent shareholders to approve material changes to the relationship agreement.
Clarifying the operation of the free-float provisions:
- explicitly excluding shares subject to a lock up for a prolonged period, since they do not provide any liquidity;
- detailing the circumstances where we might consider modifying the 25% free-float requirement, indicating that any modification beneath 20% would be unlikely; and
- removing the requirement for a minimum absolute percentage free float within the standard segment, provided that sufficient liquidity is present.
Providing shareholders with better quality information:
- requiring fuller and more comparable disclosures for smaller related party transactions in the annual report;
- mandating disclosure in an annual report made as a result of the issuer's premium listing to be clearly identifiable as such;
- introducing statements regarding the operation of the relationship agreement on an annual basis; and
- clearly expressing the applicable standard when assessing compliance with the UK Governance Code with respect to directors' knowledge of their responsibilities and obligations, including fiduciary duties (or local equivalent).
You can find further information on the FSA website.