FTSE lays down the law to foreign firms listing in London

The FTSE has set tough new rules for foreign companies planning to list on its major indices, which will change the structures of a swathe of London flotations next year.

The move will help ensure that overseas companies that principally trade shares in the London market "play by the rules" of the UK and so protect City investors, according to leading bankers.

In order to qualify for inclusion in the prestigious FTSE 100, 250 and SmallCap indices, foreign companies will now have to sell at least 50 per cent of their shares in London. Previously, they only had to issue shares to the value of one-quarter of the firm.

The only way to avoid this more stringent regime, which ensures that no one party or concert of shareholders can control a foreign company, is to incorporate the group in the UK.

Russian companies could be particularly hard hit, according to advisers who have worked for Moscow. The Kremlin must approve decisions to incorporate strategic assets, such as commodities, overseas or plans to list a significant slice of them in foreign jurisdictions. Also, many of these companies have been built into major entities by owners who want to retain authority. "It's trickier for Russian companies," said one London banker. "Getting permission to offshore assets is complicated and some Russian owners don't like losing control."

Russian commodities giants that are looking to join the London Stock Exchange or upgrade their listings next year include the Siberian Coal Energy Company (commonly known as Suek), steel group Metalloinvest and gold and silver producer Polymetal.

However, some of these have already considered incorporating in the UK partly in recognition that the nationality regime was getting tougher.

Under the previous regime, which was discreetly amended through a "nationality practice note" update last week, overseas firms were not allowed to list if one shareholder or concert party was in control. But it has not always been easy to decipher firms' ownership structures, so the FTSE decided that selling half the shares will guarantee that no one party is in control.

"Controlling ownerships are a significant characteristic of certain countries but it wasn't really working for the UK," said a FTSE spokeswoman.

It emerged on Friday that Polymetal is seeking a primary listing worth up to $1bn on the London Stock Exchange. HSBC is understood to have been hired to develop the plans.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?