The United Kingdom’s Financial Conduct Authority announced new guidelines on Thursday for the country’s stock market listings in an attempt to encourage growth following a slowdown in IPOs.
The new rules, which take effect on July 29, will bring the UK’s listing system in line with those in other countries while also making it simpler and more streamlined, according to the FCA.
The FCA stated that the changes represent the most significant reform to the listing regime in more than three decades, according to CNBC.
“They aim to support a wider range of companies to issue their shares on a UK exchange, increasing opportunities for investors,” it added.
One significant reform is the removal of the ‘premium’ and ‘standard’ listing section. Instead, there will be one overarching category for equity share listings, known as ‘commercial companies.’
The FCA Executive Director for Markets and International, Sarah Pritchard noted this should very much simplify the process,” according to CNBC Squawk Box Europe.
Previously, there were difficulties between the two categories, and the standard listing segment was not well understood, she explained.
“We had overwhelming feedback and support from all parts of the market on the need to simplify and move to one straightforward category,” Pritchard expounded.
Premium listings historically had higher requirements than normal listings. Some of these will be carried forward and applied to all listings, while others have been removed.
According to the FCA, The new rules remove the need for votes on significant or related party transactions and offer flexibility around enhanced voting rights. Shareholder approval for key events, like reverse takeovers and decisions to take the company’s shares off an exchange, is still required.
