FCA to bring in controversial new premium listing category in July
The Financial Conduct Authority this morning said it will proceed with plans to create a new category within its "premium listing" regime, aimed at companies controlled by a shareholder that is a sovereign country.
The new category will be in place from 1 July 2018.
The plans were originally floated with an eye on making it easier for oil major Saudi Aramco to list in the UK, as part of a concerted effort by British authorities to draw the listing away from New York and Hong Kong.
However, question marks have since cropped up as to whether the energy company will go forward with a foreign listing.
Read more: City watchdog seeks to reassure big investors on Saudi Aramco float
But some institutional investors had raised concerns over the proposals, with lobby group the Investment Association previously objecting to the plans to create a new premium listing category that could mean Aramco was able to list with lower transparency requirements.
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, as opposed to loosening regulation.
The City watchdog said today it had taken on board consultation feedback, so it will include a requirement for the election of independent directors to be subject to separate approval by independent shareholders.
Disclosure obligations on related party transactions beyond market abuse regime disclosures have also been added, which would mean "timely disclosures" on transactions between the sovereign and the issuer.
Andrew Bailey, the FCA's chief executive, said:
These rules mean when a sovereign controlled company lists here, investors can benefit from the protections offered by a premium listing. This raises standards. This package recognises that the previous regime did not always work for these companies or their investors. These rules encourage more companies to adopt the UKs high governance standards.
Read more: Saudi Aramco and Indian group to build $44bn mega refinery
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