Finance markets

FCA to consult on Hill and Kalifa’s reforms in UK financial markets

The UK’s Financial Conduct Authority has launched a consultation on a series of proposed reforms to the country’s primary market rules, following two major reviews of the sector.

The UK Listing Review, chaired by Lord Jonathan Hill, and the FinTech industry’s Kalifa Review made general recommendations earlier this year to reform the City’s market regulations with the aim of making them more attractive to businesses and Investors.

The FCA said it would seek comments on four areas of potential regulatory change from the reviews, including allowing a targeted form of dual-class equity structures in the premium segment and reducing the required float of stocks. at 10%.

“These proposals are essential if we want the UK to continue to be a modern and vibrant market. Today, we are acting confidently to meet the needs of a changing market, ”said Clare Cole, FCA’s director of market surveillance, in a July 5 statement.

The consultation will also consider raising the minimum market capitalization required for companies looking to list in the UK from £ 700,000 to £ 50million, which the watchdog says would give investors “a plus greater confidence and greater clarity on the types of companies “allowed to float in the city.” .

Meanwhile, the FCA has also proposed a series of minor changes to listing rules, disclosure guidelines, transparency rules and prospectus regulation rules to simplify its regulation and innovate on old practices and technologies.

The regulator has chosen to analyze separately the recommendations for changes to the listing rules of special purpose acquisition companies, while blank check vehicles have gained in popularity this year.

“Our proposals should result in a wider range of UK listings and more choice for investors while continuing to ensure appropriate levels of investor protection,” Cole said.

“They are intended to encourage high quality companies to register earlier, and thereby increase the possibility of a larger investor base that can access the growth of these companies.”

Lord Hill’s listing review found that the number of UK listed companies has fallen by around 40% from its 2008 peak, while London accounted for just 5% of all initial public offerings in the world between 2015 and 2020.

The watchdog consultation is expected to last 10 weeks, with a closing date of September 14. If the FCA’s comments and board are approved, the changes could be put in place before the end of this year.