FCA set to implement new listing rules in May 2014

Updated – 1 May 2014

The Financial Conduct Authority (FCA) Board has today made the full suite of changes to the Listing Rules set out on 17 April 2014, including the new requirements on cancellation of a premium listing, described below in option one.

The new Rules will be published on 2 May 2014  and come into effect on 16 May 2014. The FCA intends to publish the related policy statement, including its response to industry feedback on the new Rules, on the 16 May.

17 April 2014

The Financial Conduct Authority (FCA) has confirmed that new rules on the UK listing regime are scheduled to be taken to the Board for consideration on 1st May 2014. If approved, the new rules are expected to come into force on 16 May 2014.

The FCA proposed a suite of changes to the listing regime in November 2013 (CP 13/15 ‘Enhancing the effectiveness of the listing regime and further consultation’). This responded to investor concerns over the governance of premium listed companies with a controlling shareholder, and the need to protect the interests of minority shareholders.

The November consultation included a question on changing the rules on cancelling a listing. The FCA sought views on whether to add a new requirement for premium listed issuers with a controlling shareholder to gain approval from the majority of independent shareholders before seeking to delist (option 1); or retain the existing rules on cancellation (option 2).

The FCA’s Board will be asked to approve the new requirements on cancellation set out in option one. If a premium listed company has a controlling shareholder and wishes to apply for a cancellation it would have to both:

  • Obtain a majority of at least 75% of the votes attaching to the shares of those voting on the resolution; and
  • Gain approval by a majority of the votes attaching to the shares of independent shareholders.

In takeover offer situations, an equivalent requirement based on acceptances will apply, except that when an offeror has acquired or agreed to acquire more than 80% of voting rights no further approval/acceptances by independent shareholders would be required to cancel the premium listing. More detail on option one can be found in CP 13/15.

Today’s announcement is intended to help listed issuers and advisors plan  transactions by providing clarity over the timetable for implementing changes to the listing rules. Market participants with relevant transactions which are on-going, planned or scheduled for the near future should contact the FCA.