The  UK's Financial Conduct Authority (FCA) has launched a consultation on proposals to create a new category within its premium listing regime to cater for companies controlled by a shareholder that is a sovereign country.

Last February the FCA launched a discussion paper ‘Review of the Effectiveness of Primary Markets’.  The paper examined the role of listed primary markets as an important component of the broader capital markets landscape, and the structure of the UK listing regime in supporting that role.

The work on the review continues. However, the FCA is bringing forward a specific proposal for a targeted set of changes to the premium listing regime ahead of other possible proposals arising from the review.

The proposal will address companies controlled by a shareholder that is a sovereign country.  The proposal aims to enable companies which may the subject of major privatisation transactions to choose the higher standards of premium listing, rather than standard listing.

Andrew Bailey, FCA chief executive, said: “Regulatory protections for investors lie at the core of the listing regime. However, it is important that these protections remain well-targeted. Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate.

“Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature.  Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries.”

The FCA said that the new listing option was for companies of a distinct type which may wish to access UK markets and choose the higher standard represented by our premium listing regime rather than standard listing. Over the past decade, the FCA has given careful consideration to the appropriate treatment within the premium listing regime of companies with controlling shareholders.  However, this consideration largely addressed instances where the companies were controlled by private sector entities, the FCA said.

Separately the London Stock Exchange has released a discussion paper for consultation on changes to rules relating to the AIM market. The proposals set out in the discussion paper relate to admission criteria; providing early clarity for applicants and nominated advisers in the admission process and ensuring consistency of approach across the nominated adviser community in respect of appropriateness considerations; as well as outlining appropriate levels of corporate governance.

The deadline for responses is 8th September 2017 and they can be sent by email.