The FSA has published a discussion paper reviewing the structure of the UK listing regime. The drivers behind the review include the evolution of global markets and the increasing competition and choice in primary and secondary market services and products. A number of market participants have also raised concerns that there is confusion in the market as a result of the different markets and segments offered by the FSA and the LSE, such as primary listing, secondary listing, GDRs and AIM, which are all loosely referred to as a "London listing".
Issues raised in the paper include:
- Whether the 'super-equivalent' standards (those imposed over and above the minimum requirements of EU directives) applied to those companies with a primary listing should be retained and whether the FSA should continue to set those standards.
- Whether the standards for UK and overseas companies should be aligned in relation to corporate governance and pre-emption rights.
- Whether UK companies should have access to secondary listing.
- How the listing regime should be segmented and labelled.
Two options are outlined in relation to improving the segmentation and labelling of the listing regime:
- Under Option 1 there would be a single listing segment for equity securities, which would be the 'premium brand' of the Official List, with super-equivalent standards (currently primary listing of equity securities). Secondary listing of equity securities and the listing of GDRs would be dropped from the Official List. Securities which would previously have received the secondary or GDR listing label could however still be admitted to trading on a regulated market on a 'directive minimum' basis.
- Option 2 involves maintaining the 'super-equivalent' and 'directive minimum' equity security segments of the listed market. Irrespective of which option is followed, it is proposed that the label "Tier 1 Listing" will be used to denote the primary listing of equity shares and "Tier 2 Listing" will be applied to all other listed segments.
The full discussion paper is available on the FSA website at http://www.fsa.gov.uk/pubs/discussion/dp08_01.pdf. Comments should be submitted by 14 April 2008 and the FSA aims to publish feedback during the third quarter of 2008.