The necessary changes to the rules in the FCA Handbook to establish the new premium listing category will come into effect on July 1, 2018. We will have to see whether the largely negative investor reaction to the proposed new premium listing category will continue once the new rules come into force, and to what extent eligible SCCs find the relaxation of the UK premium listing rules offered by the new listing category attractive enough to opt for listing in London rather than elsewhere. such as New York, where even larger housing is available for foreign issuers. Finally, we will also have to wait to see what changes (if any) will be made to the FTSE Index rules to reflect the inclusion of this new premium rating category. As with the FCA`s initial consultation, other features of the premium enrolment scheme apply as usual. These include the need to demonstrate that a company carries out independent business activities, the obligation to disclose information on the issuer`s compliance with the Financial Reporting Council`s corporate governance code, proportional voting rights and compliance with the principles of subscription rights. The Financial Conduct Authority has published final rules creating a new category in its premium listing system for companies controlled by a shareholder that is a sovereign country. CCS`s new premium registration category is only available for securities of issuers where the majority shareholder is publicly owned. If the issuer no longer has such a shareholder, the FCA will consider cancelling the listing of the securities or requiring the issuer to transfer its listing to another class. A particularly new and important feature of the new SCC premium rating class is that, for the first time, RDs and not just shares may qualify for a premium listing. However, only CDs of SCCs and not other commercial companies will be able to receive a premium rating. DRs of other companies are still only eligible for a standard listing. Following the FCA`s consultation, the FCA`s final rules introduce the following important changes to the existing premium rating rules for issuers of state-controlled companies falling under the new premium listing category: Government-controlled companies will be able to apply for admission to the new premium listing category from 1 July 2018, Effective date of the new rules.
Issuers of state-controlled companies that have an existing listing may be admitted from 1. July 2018 also apply for the transfer of their registration in this new category. RDs from government-controlled issuers will be eligible for premium listing In a policy statement issued on June 8, 2018, the UK`s Financial Conduct Authority (FCA) confirmed that it would proceed with proposals announced and consulted in July 2017 to create a new premium rating category for „government-controlled commercial companies” („SCCs”). This new category will be available for SCC registrations as of July 1, 2018. Last year, as Aramco considered an international listing as part of its planned IPO, the UK`s attention turned to whether meeting certain requirements of the FCA`s premium listing rules might be too difficult or onerous for state-controlled companies. The concern was that companies would prefer to be listed in New York or elsewhere, or perhaps even in the standard category of the official UK listing, rather than having a premium listing in London. This new category is open to companies whose majority shareholder is a sovereign state. The policy statement will be of interest to such companies considering listing in the United Kingdom, firms advising potential applicants and companies or individuals investing, trading or advising on UK-listed securities. In July 2017, we consulted in CP17/21 (PDF) on proposed rules for a new category within the premium list that would be open to companies with a sovereign majority shareholder. Starting at 1. July 2018, an issuer with a sovereign sovereign is entitled to a premium listing as a majority shareholder if the issuer meets all requirements that apply to premium issuers listed under the listing rules, except: In this policy statement, we respond to CP17/21`s comments (PDF) and publish the final rules for a new category within the premium listing open to state-controlled companies. Issuers will be able to apply for admission to the new class from 1 July 2018, the date of entry into force of the rules defining the new class.
The UK`s corporate governance requirements, rather than the listing rules themselves, set independence requirements for the boards of listed companies. However, the premium listing rules require that the election of independent directors be approved – by simple majority – both by all shareholders (including all controlling shareholders) and separately by independent shareholders (i.e. excluding the controlling shareholder(s)). If the election of the director is not approved by both groups of shareholders and the corporation wishes to proceed with the appointment of the director, the rules set out a 90-day „cooling-off period” before proposing another resolution for the election of the director, on which all shareholders can vote jointly. Premium listed companies where the majority shareholder is a majority shareholder must enter into an agreement – commonly referred to as a relationship agreement – with the majority shareholder that contains minimum conditions to ensure that: (i) transactions with the majority shareholder are carried out at arm`s length and under normal trading conditions, (ii) the majority shareholder (or its affiliates) does not take any action to terminate the shareholder Side. prevent companies from complying with its listing obligations and (iii) neither the controlling shareholder nor his members will propose a shareholder resolution to circumvent the proper application of the listing rules. Eligible issuers – government-controlled issuers with a public ownership interest of 30% or more If the listed company does not comply with these or certain related requirements with respect to the relationship agreement, it will be penalized under the listing rules by having all RPAs approved by an independent vote of shareholders, including those normally required by their size or normality. Commercial activities are exempt from this requirement.
None of these requirements apply to SCCs. The aim of the new listing category is to encourage state-controlled companies to opt for a premium listing with a higher standard rather than a standard listing when listing in London. The new listing category aims, inter alia, to remove two practical obstacles previously faced by State-controlled companies under the premium rating system: (i) the requirement of a majority shareholder agreement; and (ii) the requirement of prior shareholder consent for transactions with the State.