The Financial Services Authority (FSA) is proposing to weaken some of its rules on how companies list their shares after an industry group warned that too much regulation could put London at a competitive disadvantage.
The City's financial regulator published a consultation paper on simplifying and modernising UK listing requirements to give companies guidance in how to implement the new European Union Prospectus Directive. In May, the Association of Private Client Investment Managers and Stockbrokers said that the UK should not "gold-plate," or introduce rules in addition to what the EU had agreed.
The regulator said yesterday: "In light of industry comments ... the FSA proposes to remove all super-equivalent regulation which currently applies to the debt and secondary listed markets." But it added that the majority of market participants it had consulted supported "gold-plating" the eligibility requirements for companies issuing initial public offerings, imposing higher standards than those required by Brussels. The FSA proposes keeping some of these provisions.
The stock broker association welcomed the regulator's partial climbdown on gold-plating. Angela Knight, the association's chief executive, said: "The way they undertook the listing regime changes is something that stands very much to the credit of the FSA." Justin Urquhart Stewart of Seven Investment Management welcomed anything that simplifies listing in London and reduces the cost.
The FSA's key proposals include: clarifying the role and obligations of sponsors, typically a bank; adopting a more flexible approach to the presentation of financial information produced outside the scope of the Prospectus Directive; aligning the requirements for debt securities with those of the directives; bringing the rules for overseas primary listed issuers more into line with those for domestic issuers; and restructuring the rules to reflect the FSA's wider regulatory role.
The regulator plans to publish the final version of the listing rules in the spring for implementation on July 1.Reuse content