Newsflash: Updates to the UK Listing regime by the FCA and LSE

On 11 July 2024, the Financial Conduct Authority and the London Stock Exchange released 3 publications updating the UK listing regime, representing a major shift in the structure of the regime and the nature of ongoing regulation of listed companies in the UK.

1. Policy Statement 24/6 (“PS 24/6”)

The PS 24/6 was published pursuant to the Consultation Paper 23/31 from December 2023, where the FCA initially set out its detailed proposal for reform of the existing listing regime.

The new UK Listing Rules will come into force on 29 July 2024, only two weeks after the publication of the PS 24/6. The FCA has stated that the new UK Listing Rules are more consistent with international market standards and “ensures investors will have the information they need to make decisions about their money, while maintaining appropriate investor protections to hold the management of the companies they co-own to account”.

Key changes include:

• the removal of the ‘premium’ and ‘standard’ listing segments. Premium listed issuers will be automatically assigned to the commercial companies category whilst standard listed issuers will be able to apply from 29 July 2024 to the new commercial category under the modified transfer process;
• the new commercial companies category will allow for greater flexibility for dual class share structures and enforce a simplified eligibility criteria to being admitted to listing (including removal of the requirement to provide a three-year financial and revenue earning track record as well as historical financial information)
• adjustment of timing and content of disclosures in relation to significant; and
• institutional investors can now hold enhanced voting rights which incentivises companies to list in the UK.

2. Primary Market Bulletin 50 (“PMB 50”)

Alongside the PS 24/6, the FCA published the PMB 50, updating market participants and elaborating on changes to the listing regime. It highlights practical aspects of the new UK Listing Rules, such as the reduction in circumstances requiring a sponsor post-IPO and new categories for non-UK companies.

3. Market Notice N06/24

The London Stock Exchange has also published the Market Notice N06/24 to explain the changes to its Admission and Disclosure Standards in order to align them with the reformed listing regime.

Conclusion

The updates to the listing regime aim to make the UK market more attractive for listings by simplifying regulatory requirements. Reform to the listing regime is necessary given the UK accounted for only 5% of the IPOs globally between 2015 and 2020. As expressed by the FCA, “the changes set out will better reflect the risk appetite the economy needs to achieve growth.”

For more information about this topic, please do not hesitate to get in touch with Daniel Bellau or any member of our Corporate team.

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