FCA Reforms UK Listing Rules

The Financial Conduct Authority has published a final draft of it proposed reforms to UK rules for the listing of shares on UK Stock Exchanges. This will have an impact on all regulated firms and professional advisers that advise and assist companies to raise capital by listing their shares on a stock exchange.


The FCA carried out a review of the UK’s Primary Markets.  The review was intended to make the UK a more attractive location for firms to list shares on the UK equity markets, to provide opportunities for growth and to provide greater investment opportunities for investors. The FCA has recently amended its competence requirements for Sponsors of listings, amending the Listing Rules (LR) Handbook with effect from 26 April 2024.

Further reforms are in the pipeline, as set out in FCA Consultation Paper CP23/31 which was originally published in December 2023 but an update was published by FCA on 7 March 2024. This is believed to be the near final version. The consultation closed on 2 April 2024 and the final rules are expected in the second half of 2024. They are likely to come into force within two weeks of publication.

Who will be Affected?

The amendment to the Sponsor Competence rules will affect current or aspirant Sponsors. However it will also have any impact upon companies seeking a listing and who are looking to appoint a Sponsor for their Initial Public Offer (IPO) and or subsequent share issues.

The wider reform of markets will also have an impact upon companies considering a listing in the UK. The changes that FCA has consulted on are designed to streamline the listing process by changing some of the application and reporting requirements.

The changes proposed will be of interest to firms that are current or aspiring Sponsors and those that advise and support issuers undertaking an IPO. It is typically investment banks, corporate finance advisers and some broker-dealer firms that will act as Sponsor or otherwise be involved in capital raising via the IPO. There may be an indirect impact for professional adviser who may be involved in advising a client company undergoing an IPO, such as, law firms and accountancy firms.

What is changing immediately?

The new rules already in force focus on Sponsor competence and the value and benefits of the Sponsor provides for issuers, the FCA and wider market in terms of re-calibrating supervisory and compliance expectations.  The new measures will also enhance the ability of a Sponsor firm to demonstrate competency and experience thereby deepening the pool of potential sponsors.

In particular, the relevant period during which a sponsor declaration must have been submitted to the FCA is extended to five years (from three) and further guidance is given under the new competence criterion regarding relevant corporate finance advisory experience.

Full details of the Sponsor Competence changes can be found in instrument FCA 2024/19.

Next Steps

The proposed changes to the Primary Markets listing rules have been set out in the Tranche 1 and Tranche 2 consultations and are summarised in the final version of CP 23/31 published by FCA on 7 March 2024. The draft legal instrument also published on 7 March 2024 can be viewed here https://www.fca.org.uk/publication/consultation/uk-listing-rules-instrument-2024.pdf. This will provide advanced warning of the scope of the changes proposed.

Firms should now be on alert for the release of the legal instrument bringing in the balance of the new rules and requirements. It is expected during the coming Summer months. Once published, firms should assess any changes required to their policies, processes and procedures to ensure compliance.

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