UK Listing Regime: FCA publishes proposals for simplified regime

On 20 December 2023, the FCA published its proposals for a simplified UK listing regime. The proposals reflect the UK's growth agenda and concerns that the existing Class 1 regime puts UK listed companies at a competitive disadvantage when participating in auctions.  

Key features of the proposals include:

• the introduction of a simplified listing regime with a single listing category (Equity shares commercial companies (ESCC), with streamlined eligibility and ongoing requirements;
• moving to a disclosure-based regime;
• disclosures for significant transactions (the new name for Class 1 transactions) while keeping sponsor scrutiny of related party transactions, rather than the current mandatory shareholder votes. Shareholder approval for key events such as reverse takeovers and de-listing would, however, remain; and
• removing Class 2 transactions from the Listing Rules completely.

The FCA notes that: “The proposals could entail an increased possibility of failures, but the changes set out would better reflect the risk appetite the economy needs to achieve growth.”

The FT's commentary on the changes can be accessed here: UK financial regulator says listing rules overhaul could lead to more failures (ft.com)

The FCA's detailed proposals are set out in CP23/31: Primary Markets Effectiveness Review: Feedback to CP23/10 and detailed proposals for listing rules reforms (fca.org.uk). 

This follows the publication of CP23/10: Primary Markets Effectiveness Review: Feedback to DP22/2 and proposed equity listing rule reforms (fca.org.uk) in May 2023.

The FCA intends to gather views on the proposals until late March 2024 with a view to publishing final rules in the second half of 2024.

We will be publishing a series of articles on the proposed changes to the Listing Rules. 

How can we help?

If you would like to discuss the changes to the UK Listing Regime, please speak to your usual contact at Burges Salmon or Nick Graves, head of the firm's Corporate Group.

Sarah Pritchard, Executive Director, Markets and International, at the FCA said: "We are working to strengthen the attractiveness of UK capital markets and supporting UK competitiveness and growth. As we do so, it is important that others consider what they in turn can do, to make sure the UK remains an attractive place for companies to raise capital."