The potential impact of the new UK Listing Rules on securities litigation

Herbert Smith Freehills LLP have published an article in Butterworths Journal of International Banking and Financial Law on the potential impact of the new UK Listing Rules on securities litigation.

The new UK Listing Rules (UKLRs) came into force on 29 July 2024 following two consultation papers published in May 2023 (CP23/10) and December 2023 (CP23/31). They represent a radical restructuring of the UK listing regime, with the aims of tackling the decline of the UK’s equity markets and making UK listed companies nimbler in international M&A processes. The Financial Conduct Authority's (FCA) overarching philosophy is a shift to a disclosure-based regime, rather than relying on shareholder votes or strict eligibility criteria, to make the UK a more competitive listing venue and to open the market to more diverse business models and complex corporate structures.

The most interesting changes under the UKLRs from a litigation perspective are the following: (i) implementation of a new single listing category to replace the current premium and standard segments; (ii) removal of the requirement for shareholder votes and FCA approved circulars for Class 1 and related-party transactions; (iii) retention of the requirements for annual reporting on environmental, social and corporate governance (ESG); and (iv) modification of the sponsor regime.

In our article we examine the potential impact of the overhaul of the regime on future claims brought by shareholders under ss 90 and 90A of the Financial Services and Markets Act 2000.

The article can be found here: The potential impact of the new UK Listing Rules on securities litigation. This article first appeared in the October 2024 edition of JIBFL.