FCA Announces Changes to UK Listing Rules to Boost Growth and Innovation

  • IT Innovations
  • 02.12.2021 12:15 pm

More details can be found here: https://www.fca.org.uk/publications/policy-statements/ps21-22-primary-market-effectiveness-review-feedback-and-final-changes-listing-rules

The FCA has confirmed the following changes:

  • 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 £30 million. Raising the MMC will give investors greater trust and clarity about the types of company with shares admitted to different markets.

Anne Fairweather, Head of Government Affairs & Public Policy at Hargreaves Lansdown:

“Rule tweaks will encourage more companies to list in the UK providing welcome opportunities for investors. The Government must now look to address wrinkles in the way reams of information must be disclosed through the use of old fashioned prospectuses, which currently limit the attraction of offering new capital raisings to ordinary investors. Retail investors must have the opportunity to invest at IPOs and greater protections with secondary fund raises. A flurry of smaller companies joining the market will provide potential for some exciting growth in newly emerging technologies and industries, however this potential will go hand in hand with increased risk. As always, investors must weigh the opportunities on offer against the risks, we’d expect individual smaller companies to make up fairly small parts of a client’s overall portfolio.”

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