FCA announces largest overhaul to stock market in 30 years

Are the new rules enough to attract high quality companies to the UK?

The Financial Conduct Authority (FCA) has today published its new regulations, which plan to grow the economy by helping to retain and entice businesses to list on the London stock market.

“A thriving capital market is vital in delivering investment to growing companies plus returns and choice to investors,” explained Sarah Pritchard, Executive Director, Markets and International, at the FCA.

“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,” she continued.

The updated rules, which come into effect on 29 July, include removing voting on significant transactions and creating more flexibility on enhanced voting rights.

The intention is to better align the London market with international standards.

While the FCA acknowledges the increased risk these new rules allow, it maintains the changes will better reflect the risk appetite needed to stimulate the economy.

Newly appointed Chancellor Rachel Reeves believes the financial services industry is “at the heart of this Government’s growth mission”, with the overhaul representing “a significant first step towards reinvigorating our capital markets”.

Chris Beckett, Head of Equity Research at wealth management firm Quilter Cheviot, remains cautious about excessive loosening of restrictions.

“Encouraging businesses to list here is beneficial, and we hope these reforms will help, despite reservations. However, attracting high quality companies requires maintaining robust governance standards,” he commented.

“Given the FCA’s mandate and actions to date, it fully understands the need to protect those standards,” Beckett added.