A&O Shearman | FinReg | UK Conduct Authority Sets Out Detailed Changes to Listing Rules
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  • UK Conduct Authority Sets Out Detailed Changes to Listing Rules

    The U.K. Financial Conduct Authority is consulting on detailed proposals to reform its listing rules which are focused on a single listing segment, a more disclosure-based regime and changes to the sponsor regime. The FCA is proceeding with its original proposal to introduce a single listing segment, which it put forward in its consultation last year, discussed in our client note, "FCA Moves Ahead with a Single Equity Listing Category". Taking into account feedback to its consultation, the FCA sets out how the proposed 'commercial companies' equity share listings framework would work, including eligibility, significant and related party transactions, dual/multiple class share structures and sponsors. The 'commercial companies' category would replace the existing 'premium' and 'standard' listing segments. The FCA also describes details of the other listing segments changes it is proposing to make.

    The FCA is proposing to implement the changes by replacing the existing Listing Rules Handbook with a UK Listing Rules Handbook, referred to as UKLR. Responses to the proposals relating to UKLR may be submitted until March 22, 2024. The FCA intends to publish its Policy Statement and final rules at the start of H2 2024, and is proposing an implementation period of two weeks before the new UKLR enters into force. The FCA also sets out a transitional regime whereby those in the existing premium listing segment will automatically move to the 'commercial companies' category, while those in the standard listing segment will move to a transitional regime pending their move to the new 'commercial companies' category or elsewhere.

    The FCA is also proposing amendments to the sponsor competence requirements, which are aimed at introducing more flexibility for firms to demonstrate competence, including in periods of low market activity. Responses to these proposals may be submitted by February 16, 2024, and the FCA intends to implement these revisions in Spring 2024 within the existing Listing Rules. The changes will move over to the new UKLR when those come into effect.

    Further details of these latest proposals from the FCA are discussed in our client note, "Draft UK Listing Rules Published for New Commercial Companies Equity Segment".

    These proposals are linked to the government's proposals to revise the existing U.K. prospectus regime, for which the government published its Policy Note in August 2023. The related draft Public Offers and Admissions to Trading Regulations 2023 have been laid before Parliament.

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