In rules published today, the UK’s Financial Conduct Authority (FCA) has set a simplified registration regime with a single class and improved eligibility for companies wishing to list their shares in the UK.
The review of import rules better aligns the UK regime with international market standards. It also ensures that investors have the information they need to make decisions about their money, while maintaining adequate investor protections to hold the management of companies they co-own accountable.
The new rules remove the need to vote on significant or related party transactions and offer flexibility on enhanced voting rights. Stockholder approval is still required for key events such as reverse buybacks and decisions to delist the company’s stock from a stock exchange.
The changes to import rules follow extensive market-wide engagement. The FCA has been clear that the new rules involve more risk, but believes the changes set out will better reflect the risk appetite the economy needs to achieve growth.
The rules will become operational on 29 July 2024 after a short implementation period. The FCA believes that this timing will allow the benefits of the reforms to materialize as soon as possible.
According to the UK List Review, the number of listed companies in the UK has fallen by around 40% since a recent peak in 2008. Between 2015 and 2020, the UK accounted for only 5% of Initial Public Offerings (IPOs) globally .