The UK listing regime is about to undergo the most significant reforms in decades. The Financial Conduct Authority (FCA) has confirmed that the new rules will take effect on 29 July 2024. This article provides an overview of these changes and their potential impact.

Overview

On 11 July 2024, the FCA published PS24/6 (Primary Markets Effectiveness Review: Feedback to CP23/31 and final UK Listing Rules), confirming the final form of the changes to be made to the UK listing rules. These changes represent the most significant reforms made to the regime for decades.

The FCA is proceeding largely as proposed in its consultation (CP 23/31) published in December 2023, although some changes have been made. The new rules will come into effect on 29 July 2024, subject to certain transitional provisions.

Key Changes

Although the final regime largely follows the position outlined in the consultation, there are some material differences in the final rules. For companies in the Equity Shares for Commercial Companies (ESCC) category, the main changes from the consultation relate to:

  • The disclosure requirements for significant transactions.
  • Amendments to the position for companies with controlling shareholders.
  • Introducing greater flexibility in relation to dual-class share structures.
  • Impact and Implications

The FCA’s deregulatory shift to achieving investor protection through disclosure, rather than regulation, concludes a process of exploring the scope for a radical overhaul. It offers flexibility for issuers, over prescriptive regulation, and is subject to safeguards to provide investors with information to exercise stewardship and voting rights.

However, issuers will need to focus even more on their obligations under MAR and on what information is required to be disclosed in order to keep the market appropriately updated given the less prescriptive regime.

Conclusion

The UK listing reforms are a radical reset that will take effect on 29 July 2024. They represent a significant shift in the UK’s approach to listing rules and are expected to have a profound impact on the market. The FCA will formally review the new regime in five years’ time but will not hesitate to intervene earlier if necessary to ensure market integrity or its other statutory objectives.

These changes are expected to enhance the competitiveness of the UK capital market and remove some longstanding shareholder protection measures. As we approach the start of the autumn IPO window, it will be interesting to see how these changes are received by the market and what impact they will have on the UK’s position as a leading global financial centre.

At Fisher Jones Greenwood LLP, the corporate law team are ready to help your business navigate these changes and leverage new opportunities. If you or your company need any advice or assistance with the listing rules, regulations or updates, as well as any advice concerning your company whether listed or not, please do not hesitate to contact us on 01206 835300 or contact us.