The FCA has launched a consultation on proposed reforms to improve the effectiveness of UK primary markets in combination with a discussion about how the FCA might continue to develop the listing regime to ensure the UK remains a competitive and dynamic market.
Specific recommendations for improvement to the regime have been made following the UK Listing Review, chaired by Lord Jonathan Hill, and the Kalifa Review of UK FinTech. In response, the FCA’s suggested reforms seek to address and build on the recommendations, to ensure that the UK remains an attractive place to grow and list successful companies.
The consultation will focus on the following measures:
- Allowing a targeted form of dual class share structures within the premium listing segment to encourage innovative, often founder-led companies onto public markets sooner, and so broaden the listed investment landscape for investors in the UK;
- Reducing the amount of shares an issuer is required to have in public hands (i.e. free float) from 25% to 10%, reducing potential barriers for issuers created by current requirements;
- Increasing the minimum market capitalisation (MMC) threshold for both the premium and standard listing segments for shares in ordinary commercial companies from £700,000 to £50 million. Raising the MMC will give investors greater trust and clarity about the types of company with shares admitted to different markets; and
- Making minor changes to the Listing Rules, Disclosure Guidance and Transparency Rules and the Prospectus Regulation Rules to simplify the FCA’s rulebooks and reflect changes in technology and market practices.
The consultation will close to comments on 14 September 2021.