On 20 December 2023, the FCA published the following proposals intended to make the UK’s listing regime more accessible, effective and competitive.
- Consultation Paper CP23/31 Primary Markets Effectiveness Review: Feedback to CP23/10 and detailed proposals for listing rules reforms.
Earlier this year the FCA published CP23/10 which set out proposals aimed at making the UK’s listing regime more accessible and competitive. Having conducted a broad engagement process and received extensive feedback on its proposals the FCA is setting out in CP23/31 more detailed measures. In particular:
- The FCA has broadly maintained the approach set out in CP23/10 of removing its current ‘premium’ and ‘standard’ listing segments and designing a new ‘commercial companies’ category for equity share listings.
- The FCA has also calibrated the proposed commercial companies category to balance flexibility and accessibility for issuers, with appropriate disclosure and safeguards to preserve market integrity and support investors’ decision making both at initial public offering (IPO) and once listed.
- The second half of CP23/31 addresses categories for other types of equity and non-equity listing, including how the FCA proposes to address existing standard listed issuers, including those with sole UK listings and those issuers that consider the UK to be their ‘secondary’ listing.
- Given the nature of the reforms, the FCA is proposing to create a completely new ‘UK Listing Rules’ sourcebook (UKLR).
- The deadline for comments on CP23/31 is 16 February 2024 for the Listing Rules (LR) 8 proposals regarding sponsor competence and 22 March 2024 for the replacement to the current LR sourcebook.
CP23/32 is part of the Wholesale Markets Review which previously concluded that the current transparency regime for bond and derivatives markets had not delivered meaningful transparency and had limited impact on price formation while imposing a high cost to industry. In CP23/32 the FCA is consulting on proposals to:
- Revise the transparency framework for the bond and derivative markets in the UK.
- Define scope and calibration of the new framework.
- Clarify exemptions from post-trade transparency.
- Improve the content of post-trade information: fields and flags.
- Refine the definition of a systematic internaliser.
The deadline for comments on CP23/32 is 6 March 2024.
- Consultation Paper CP23/33: Consultation on payments to data providers and DRSP forms including Policy Statement for the framework for UK consolidated tape.
Earlier this year, as part of the Wholesale Markets Review the FCA published Consultation Paper (CP) 23/15 setting out a proposed framework for a UK Consolidated Tape (CT) for bond market data. CP23/15 also included a discussion chapter on a CT for equities.
In the Policy Statement of CP23/33 the FCA summarises the feedback it received to CP23/15 and sets out its final position on the rules and guidance to be included in the FCA Handbook on the bond CT. It also provides some feedback on the discussion chapter questions on an equities CT. CP23/15 also consulted on bringing together existing provisions relating to Approved Reporting Mechanisms (ARMs) and Approved Publication Arrangements (APAs) within the FCA’s Handbook, without making any substantive changes to these provisions. The Policy Statement also sets out how the FCA will consolidate requirements for APAs and ARMs in the FCA Handbook.
Trading venues and APAs should familiarise themselves with the FCA’s rules to ensure they are able to comply with the relevant requirements. They should assess their current arrangements to ensure that they will be able to share data with a bond CT provider (CTP), once appointed. Potential CTPs should consider the finalised rules before developing their approach to bidding for provision of the bond CT.
The FCA expects a bond CTP to commence operation in the second half of 2025.
It also expects to finalise changes to the transparency regime (see above) in 2024 with the changes applying in 2025 before the CTP goes live.
In chapters 10 and 11 of CP23/33 the FCA sets out proposals for consultation on:
- Payments from the bond CTP to trading venues and APAs that will have to give data to the CTP.
- Changes to authorisation and other forms for CTPs, APAs and ARMs.
The deadline for comments on these proposals is 9 February 2024.
- The FCA has also published two Handbook instruments: