The Financial Conduct Authority (FCA) has confirmed that it will be introducing a new premium listing category for sovereign-controlled companies (“SCCs”) with effect from 1 July 2018.

The decision follows the FCA’s consultation on the proposal in July 2017. The final rules, which are available in the FCA’s policy statement, differ slightly from the consultation draft.

The key points to note on the new listing category are as follows:

  • An SCC is a company with a shareholder that is a sovereign country and which controls 30% or more of the company’s voting rights.
  • SCCs will be subject to most premium listing requirements, including running an independent business, reporting against the UK Corporate Governance Code, employing a sponsor and applying pre-emption rights.
  • However, unlike other premium-listed issuers, an SCC will not need to put an agreement in place with its controlling shareholder.
  • An SCC will also not need to obtain a sponsor’s opinion or independent shareholder approval before entering into a transaction with its sovereign shareholder. However, in a change from the consultation, SCCs will need to announce transactions with their sovereign shareholders as soon as they have entered into them.
  • A company with an existing premium listing will be able to move to the new category with the approval of its independent shareholders.
  • Finally, SCCs will be able to list depositary receipts (DRs) in the new premium category, as well as equity shares. (Apart from this, DRs will remain ineligible for premium listing.)

In essence, this means that SCCs will be subject to the full premium listing regime, subject to the two modifications described above. The FCA believes these modifications are proportionate and appropriate, and that it will be fully transparent to investors that these modifications apply to an SCC.

SCCs will still be able to apply for a premium listing as a commercial company or a standard listing if they wish to do so.