IA response to the FCA consultation on UK listings regime

Commenting on the FCA’s proposals from the Primary Markets Effectiveness Review (CP23/10), Chris Cummings, CEO of the Investment Association, said: “We want the UK to be the most globally attractive place for companies to list, invest and do business. To remain internationally competitive, innovation is key, and we welcome the FCA’s new blueprint for significant reform and changes to the current listing rules to bolster UK competitiveness, while maintaining high standards of disclosure and transparency. The UK has long been respected as the world leader for stewardship and corporate governance, and it is important that as we work together to attract and retain innovative companies, we ensure that investors have a reasonable level of protection. In this way, we can continue to deliver long term returns for our clients”.

In summary:

  • The IA is concerned about the decline in innovative new firms choosing to list in London. Overly restrictive Listing Requirements have acted as one of several reasons why some companies have listed elsewhere.
  • The IA supports many of the clear proposals put forward within this consultation, including the proposal to replace standard and premium listing share categories with a single segment for commercial company issuers of equity shares. We hope that this simplification will lower potential costs and complexities for issuers and encourage high-quality companies to list and operate in the UK.
  • The IA is committed to working with the Government and regulator to find new ways to guarantee shareholder protections, which ensure companies can still be held accountable for their actions. As currently drafted, the proposals place greater stewardship responsibilities on some investment managers but offer a diminished ability to implement them. This includes: the removal of a shareholder vote for significant transactions, the removal of a shareholder vote for Related Party Transactions, and the watering down of Dual Class Share Structure restrictions.
  • While the listings rules play a role in determining where companies choose to list, wider structural factors play a greater role. This includes: lower valuations, concerns regarding a lack of long-term political stability and competitive regulatory environment and eco-system, and a regulatory and commercial environment in the UK that disincentivises UK pension funds and retail investors from investing in the UK equities market.

For further information and to receive the full consultation response, please contact:

Helen Ayres, Head of Communications: [email protected]

T: +44 (0)20 7269 4620

Arianna Schardt, Communications Executive: [email protected]

T: +44 (0)20 7269 4625

IA press office: [email protected]

About the Investment Association (IA):

  • The IA champions UK investment management, supporting British savers, investors and businesses. Our 250 members manage £10 trillion of assets and the investment management industry supports 114,000 jobs across the UK.
  • Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
  • Our purpose is to ensure investment managers are in the best possible position to:
    • Build people’s resilience to financial adversity
    • Help people achieve their financial aspirations
    • Enable people to maintain a decent standard of living as they grow older
    • Contribute to economic growth through the efficient allocation of capital.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
  • The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.