New UK listing regime - detailed FCA proposals released

The Financial Conduct Authority (FCA) has published draft new UK Listing Rules that will implement its radical restructuring of the UK listing regime. This is intended to attract more companies to list in London, but will also impact on existing listed companies.

Under the new regime, the current premium and standard segments will be replaced by a single segment, the new 'equity shares (commercial companies)' category, which will have just one set of continuing obligations for normal commercial companies. The FCA is also implementing most of its proposals from May this year, as part of the new UK listing regime:

  • shareholder votes will no longer be required for significant/Class 1 and related party transactions;
  • a modified sponsor regime will remain a cornerstone of investor and market protection;
  • relationship agreements with controlling shareholders will remain mandatory; and
  • there will be significant changes to the eligibility requirements for prospective IPO candidates, moving to a disclosure-based rather than rules-based regime.

These changes will rely on greater disclosure and thus put more onus on investor due diligence.

CP 23/31 also includes the FCA’s plans for investment funds, SPACs and overseas issuers with a secondary listing in London. A further consultation on draft rules for these “other shares categories” will follow in Q1 2024, alomg with the remaining rules that will impact all issuers (including the new listing principles). 

The FCA intends that all existing premium listed commercial companies will be automatically migrated to the new commercial companies category. Existing standard listed companies will be migrated to a new transition category – with the same continuing obligations as the current standard listing, and closed to new listings – where they can remain (with no present fixed end date) or make a streamlined application to join the new commercial companies category when they are ready to do so.

FTSE Russell is reviewing the proposals and will provide an update during Q1 2024 on what they may mean for index inclusion going forward.

The consultation on the sponsor proposals closes on 16 February 2024, and on 22 March 2024 for the other proposals. The FCA then expects to publish the final rules at the start of the second half of 2024, with them coming into force two weeks later. 

Published 12 January, 2024

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