FCA unveils stock market rule changes

New rule changes in an attempt to boost growth in the UK stock markets have been confirmed today by the FCA.

The regulator indicated that it wants make the UK’s public markets a “trusted and attractive place” to list successful companies, providing opportunities for companies to grow, from which investors would benefit. 

Among the changes is a reduction in the amount of shares an issuer is required to have in public hands from 25% to 10%, reducing potential barriers for issuers created by current requirements.

The FCA also stated it wants to allow a targeted form of dual class share structures within the premium listing segment to encourage innovative, often founder-led companies onto public markets sooner, which it hopes will broaden the listed investment landscape for investors in the UK.

Another change is to increase the minimum market capitalisation (MMC) threshold for both the premium and standard listing segments for shares in ordinary commercial companies from £700,000 to £30m. The regulator suggested this MMC will give investors “greater trust and clarity” about the types of company with shares admitted to different markets.

FCA director of market oversight, Clare Cole, said: “We need to act to meet the needs of an evolving marketplace. These changes ensure the UK's markets maintain their reputation for dynamism, helping support the new types of companies seeking the investment that drives economic growth and by giving investors more choice with appropriate protection.

“Over the last few months, we have moved quickly to address areas where our rules could be improved to encourage innovation in primary markets. By taking this agile approach, we are pleased that new IPOs in 2022 will be able to benefit from the revised rules.”

The new rules come into force on 3 December 2021.

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