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FCA consultation on creating a new premium listing category

23 October 2017

In July the Financial Conduct Authority (FCA) published a consultation paper on a proposal to create a new premium listing category for sovereign controlled companies.

The premium listing regime currently contains three categories: commercial companies, close-ended investment funds and open-ended investment companies. The proposed premium listing category for sovereign controlled companies would contain two important modifications:

  • related party rules will be modified for companies falling under this category (a sovereign controlling shareholder will not be considered a related party for the purposes of the Listing Rules)
  • the controlling shareholder rules will not apply in the new category in respect of the sovereign controlling shareholder.

The joint working party of the Company Law Committees of the City of London Law Society (CLLS) and the Law Society of England and Wales has responded to the consultation.

It agreed that independent shareholder approval should be required for a transfer from an existing premium listing into the new category, and that the threshold for control should be sent at 30%.

It was noted there might be concern that the removal of the protection that comes with the controlling shareholder being considered a related party could potentially lead to inappropriate dealings between the sovereign shareholder and the listed entity, which could damage the reputation of the Official List and the London Stock Exchange.