On the Horizon podcast series
Listen to a special episode on the new UK Listing Rules published by the FCA
15 Jul 2024
Insight
UK
The Financial Conduct Authority (FCA) has published a Policy Statement (PS24/6) containing the final new UK Listing Rules (UKLRs) to implement the radical restructuring of the UK listing regime (proposed in CP23/31).
While the genesis of the overhaul is the desire to attract more companies to list in London, they will also have a significant impact on existing listed companies.
UKLRs
The new rules will completely re-write the rule book and will come into force on 29 July 2024. Moreover, obligations in the current rules not carried across to the new UKLRs will fall away on that date.
Proceeding with substantially all of the trailed proposals from December 2023 and March 2024, under the new UK listing regime:
- shareholder votes will no longer be required for significant/Class 1 transactions;
- shareholder votes will no longer be required for related party transactions;
- a modified sponsor regime will remain a cornerstone of investor and market protection;
- relationship agreements with controlling shareholders will no longer be mandatory; and
- there will be significant changes to the eligibility requirements for IPO candidates, moving to a disclosure-based rather than rules-based regime as well as adding institutions to the categories of people who can hold enhanced voting rights in a company with a dual class share structure.
The FCA's sweeping reforms represent a monumental shift for the UK listing regime, revitalising our market's appeal on the globe stage. The FCA are to be commended for this re-set of the listing regime that puts to bed any suggestion that the UK regime is more complex or restrictive than other markets.
Michael Jacobs
Partner, Herbert Smith Freehills
All premium listed companies will automatically migrate to the new Equity Shares (Commercial Companies) (ESCC) category; standard listed companies will move to a new transition category; and overseas companies with a secondary listing in London will have their own category.
Changes to the Official List will start to appear from 26 July 2024 ahead of the implementation date of 29 July 2024.
As standard listed companies in the transition category will not immediately become eligible for FTSE inclusion, FTSE Russell are expecting minimal immediate impact to the index composition on day one of the new regime.
UK MAR and the DTRs continue to apply in the same way and are largely unchanged.
Further information
You will find more detail on the new UKLRs in our three snapshots:
UKLR – the final rules are out
This is a six page comparison of the CP23/31 proposals and the final UKLRs with further detail of any changes
UKLR – changes for listed companies
This is a one page summary of the key changes for existing listed companies migrating from the premium segment to the new ESCC.
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The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2024
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