City watchdog to finally reveal decision on Saudi Aramco listing category

The Financial Conduct Authority (FCA) will this week unveil its decision on plans to offer a new listing category in a bid to attract Saudis massive oil company Aramco to list in the UK – six months later than initially planned.

The City watchdog will announce its response to a consultation on a “premium listing” status for sovereign-controlled companies on Friday morning.

The plans would give the Saudi Aramco listing less onerous transparency requirements than other companies trying to list on Londons main market, while allowing it to float a smaller proportion of shares than usual.

Read more: Former Royal Dutch Shell and GSK veteran joins Aramco board

The new category was proposed as part of a concerted effort by British authorities to draw the listing in the face of opposition from New York and Hong Kong. Saudi authorities hope the flotation would value the company at more than $2 trillion, making it the largest company ever.

The initial public offering will likely be delayed until next year, the Saudi energy minister said last month.

The consultation response was initially planned for the fourth quarter of 2017. The FCAs updated web page tracking the consultation progress still lists the policy statement date as “Spring 2018”.

Regulators, the London Stock Exchange, and even the Prime Minister have been heavily involved in courting the Saudis, as they seek to secure a symbolic victory for the UK as the nation prepares to leave the EU.

Read more: That the Saudi Aramco IPO is in jeopardy should surprise no-one

Prime Minister Theresa May yesterday spoke to Saudi crown prince Mohammed bin Salman, but Aramco was not specifically discussed, according to a spokesperson for No. 10 Downing Street, although they did discuss the “importance of stability in the oil markets”.

Yet the FCAs move to loosen the governance provisions around listing has not been welcomed, with prominent corporate governance experts up in arms about measures which could weaken the UKs standards.

In October the International Corporate Governance Network described the plans as “fundamentally flawed”, saying the UK should be pursuing a “race to the top” as it seeks to stand out, rather than loosening regulation.

Meanwhile, the Institute of Directors said last summer that it could open the way for “politically-motivated ownership interference over the company by the state apparatus”.

Read more: The big winners from an Aramco listing will be the bankers

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