The U.K. Financial Conduct Authority said Thursday it is making several changes to rules around listing shares on the U.K. public markets in efforts to broaden the investible universe for investors.
The new rules, effective on Friday, include allowing dual class share structures within the premium listing segment to encourage founder-led companies onto public markets sooner, the FCA said.
The financial services watchdog is also reducing the amount of shares an issuer is required to have in a free float to 10% from 25%.
The FCA said it is also wants to give investors greater trust and clarity about the companies admitted to the U.K. markets. To do so, it is increasing the minimum market capitalization threshold for both the premium and standard listing segments for shares in ordinary commercial companies to £30 million ($40 million) from £700,000.
"We need to act to meet the needs of an evolving marketplace. These changes ensure the U.K.'s markets maintain their reputation for dynamism, helping support the new types of companies seeking the investment that drives economic growth and by giving investors more choice with appropriate protection," Clare Cole, director of market oversight at the FCA, said in a news release Thursday.
Responding to the changes, Chris Cummings, CEO of the Investment Association, which represents the money management industry in the U.K., said in an emailed comment, "We'll be working closely with our members to see how the reforms work in practice and the outcomes they deliver. Success should be measured, not on the number of companies that list, but rather on the quality of those companies, and the long-term sustainable returns they deliver for shareholders."
