Published On: 6 June 2023

UK Listing Rules: FCA Proposes Reforms to Streamline and Boost Competitiveness 

The UK’s listing rules have come under scrutiny, particularly after Brexit, with critics arguing that the current regime is overly complex. Arm, a British technology firm, recently opted to list in the US instead of the UK, raising concerns about the attractiveness of UK stock markets post-Brexit. Microsoft’s President, Brad Smith, has openly criticised the UK’s business regime, stating that the EU is a better place to start a business. 

According to the UK Listing Review, listings in the UK have declined by 40% since 2008. In response, the Financial Conduct Authority (FCA) has revealed plans to reform and streamline the UK’s listing rules. The proposed changes include replacing the existing “standard” and “premium” listing segments with a single category for equity shares in commercial companies. 

The FCA aims to attract a wider range of companies, foster competition, and provide more choices for investors. Simplifying the rules and enhancing their effectiveness is also a priority. Arm’s decision not to pursue a London stock exchange listing this year was seen as a setback for the UK, despite the company not ruling out a UK listing in the future. Arm Founder Hermann Hausser’s comments regarding the Brexit impact on London’s international reputation have raised concerns among regulators and policymakers. 

Government ministers have expressed strong support for the FCA’s proposals. Economic Secretary to the Treasury Andrew Griffith hailed them as an important step forward in enhancing the UK’s economic competitiveness. However, the announcement has received a mixed reaction. Richard Wilson, CEO of Interactive Investor, backs the principles behind the reforms but warns against undermining market standards and shareholder rights. 

Jonathan Paltrowitz of OTC Markets Group cautions against watering down regulations too much, fearing adverse impacts on traditional UK investors. The FCA believes its reforms will rebalance regulatory burdens, benefiting listed companies and investors who can define their risk appetite and terms of engagement. 

The impact of these proposed reforms and the concerns expressed by stakeholders will be closely observed. We will closely monitor any developments in the listing rules and assess their potential implications. 

 


Sources 

https://www.fca.org.uk/news/press-releases/fca-proposes-simplify-rules-help-encourage-companies-list-uk 

https://www.bbc.co.uk/news/business-65457103 

https://www.cityam.com/london-listings-watchdog-proposes-doing-away-with-standard-and-premium-segments/ 

https://news.sky.com/story/fca-launches-consultation-paper-to-shake-up-stock-exchange-listing-rules-12871584 

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