Regulator overhauls UK stock market rules to be ‘more straightforward’

The Financial Conduct Authority (FCA) said new rules will apply from the end of this month.

The financial regulator is to launch new rules later this month aimed to boost listings in the London stock markets (Nick Ansell/PA) (PA Archive)

The UK’s financial regulator has set out an overhaul of the country’s stock market rules amid rising pressure after a string of firms shunned London listings.

The Financial Conduct Authority (FCA) said new rules will apply from the end of this month which will create a “more straightforward” listing structure.

Rachel Reeves was appointed Chancellor of the new Labour Government last week and she said it marks “a significant first step towards reinvigorating our capital markets”.

Nevertheless, the FCA admitted its new plans will “involve allowing greater risk” in a bid to secure rewards through faster economic growth.

The shake-up will include scrapping rules that currently force a shareholder vote on transactions between UK-listed companies and “related parties”.

This hurdle was partly blamed for Cambridge-based chip firm Arm’s decision to list in the US over London last year by backer SoftBank.

The FCA said the new regulations will better align UK stock market rules with wider international standards.

Sarah Pritchard, executive director for markets and international at the FCA, said: “A thriving capital market is vital in delivering investment to growing companies plus returns and choice to investors.

“That’s why we are acting to make it more straightforward for those seeking to list in the UK while retaining vital protections so investors can help steer the businesses they co-own.

“Regulation is only part of the answer in helping the UK achieve sustainable growth.

“Other factors also play a significant role in influencing where a company decides to list.

“We’re committed to continually working together with all those who have a part to play in supporting a thriving UK capital market and thank everyone who has contributed to this work so far.”

Rachel Reeves said: “The financial services sector is central to the UK economy and at the heart of this government’s growth mission.

“These new rules represent a significant first step towards reinvigorating our capital markets, bringing the UK in line with international counterparts and ensuring we attract the most innovative companies to list here.”