On 26 May 2022, the FCA published Discussion Paper 22/2 ‘Primary Markets Effectiveness Review: Feedback to the discussion of the purpose of the listing regime and further discussion’ (DP22/2). DP22/2 will be of interest to, among others, listed companies and exchanges or venue operators.

DP22/2 follows the publication of Policy Statement 21/22, which introduced new rules including those on dual class share structures in the premium listing segment and reducing free float. In DP22/2 the FCA summarises the feedback it received to the discussion chapter of Consultation Paper 21/21 regarding the potential different purposes of the UK listing regime and how it might be improved.

The FCA states that the objectives of the reforms covered in DP22/2 include:

  • Ensuring that the value of being listed is simpler to understand by removing complexity that is not serving a genuine and defined purpose.
  • Promoting broad access to listing for a wider range of companies, while continuing to set clear, simple and robust minimum ongoing standards for listed companies, providing greater investment opportunities for investors on UK markets.

Under one of the FCA’s suggestions, companies wishing to list in the UK would no longer have to choose between two different segments with different branding and standards. Instead, all listed companies would need to meet one set of criteria and could then choose to opt into a further set of obligations. These would be focussed on enhancing shareholder engagement and be overseen by the FCA.

The FCA also provides its view of the role and purpose of the sponsor regime, and sets out further questions for discussion designed to explore if inefficiencies exist in the current regime and, if they do exist, if changes to the current rules and guidance could be made. The FCA also examines how the sponsor regime could fit within wider reforms.

The deadline for comments on DP22/2 is 28 July 2022.