The Financial Conduct Authority has launched a consultation on reforms to improve the effectiveness of UK primary markets.
The consultation comes after recommendations made in the UK Listing Review by Lord Hill and the Kalifa Review, which covered UK Fintech.
Included in the proposed reforms are plans to reduce barriers to listing for companies and measures to ensure the standards of market integrity remain high.
The FCA wants to raise the minimum market capitalisation threshold for both the premium and standard listing segments for shares in ordinary commercial companies.
This currently stands at £700,000, but the FCA has proposed increasing the threshold to £50 million, saying that this provides investors with “greater trust and clarity about the types of company with shares admitted to different markets”.
See also: Lord Hill review sparks concern over loosening of listing rules
The regulator has also proposed measures to simplify the rulebook for the listing regime; has suggested a targeted form of dual class share structures in the premium listing segment; and a reduction in the required amount of shares an issuer needs to have in public hands from 25% to 10%.
Clare Cole, director of market oversight at the FCA, said: “Effective public markets are critical in enabling companies to finance their businesses, which in turn creates growth and jobs for the UK economy. These proposals are essential if we intend for the UK to continue to be a modern and dynamic market.
“Our proposals should result in a wider range of listings in the UK, and increased choice for investors while we continue to ensure appropriate levels of investor protection. They are intended to encourage high quality companies to list earlier, and so increase the possibility of a wider investor base being able to access growth in these companies.”
Alongside the consultation, the FCA is asking for views on the overall structure of the listing regime and how it might be modernised.
The consultation process is open until September 14, 2021, and the FCA said it expects to make relevant rules before the end of the year.
See also: Schroders boss urges City to back Rishi Sunak’s shake-up of listing rules
