UK Listing Regime Reform

Background

The FCA continues to consult on the proposed changes to the UK Listing Regime with a second tranche of draft rules expected to be published soon. The fundamental aim of the reform is to move to a disclosure-based regime which is less convoluted and will attract companies to list in the UK.

When will the new regime be implemented?

Publication of the final statement is being targeted for the second half of 2024.

What is included in the new regime?

In terms of the market structure, the current premium and standard segments of the LSE are being replaced with a new single listing market.

The key changes for listed entities include:

• there will likely be a reduction in disclosure obligations and shareholder approval when a company is undertaking a class 1 transaction (usually those worth 25% or more of the listed entity); and
• the ESG comply or explain annual report requirements will remain but will likely be extended to all commercial companies.

The sponsor's role on an IPO will remain largely unchanged but the focus of the sponsor is likely to be amended for secondary issues. This will depend on the outcome of the consultation regarding the prospectus rules but it is expected that sponsors on secondary issues will be advised to focus on significant increases in share capital, related party transactions, reverse takeovers, and transfers between listing categories.

How can we help?

Until the final statement is published in the latter half of this year, it is difficult to make meaningful plans regarding the new regime. That said, prior to that time we are always available to discuss the likely impact of these changes with our clients and share our experiences of how we expect them to be adopted across the market. 

If you have any questions or seek legal advice in respect of your compliance, please contact Alexander Wood (Alexander.Wood@howardkennedy.com), Marc Proudfoot (Marc.Proudfoot@howardkennedy.com) and/or Keith Lassman (Keith.Lassman@howardkennedy.com).