FCA Publishes Complete Draft Instrument Of The UK Listing Rules (Suspending Previous Version In CP 23/31) – Listing Rules & Flotation

The Financial Conduct Authority (FCA) has now published a revised draft of the UK Listing Rules (UKLRs)
as expected. This follows our previous thought leadership which provides
a broad overview of the FCA’s major reforms more generally.

As a reminder, on 20 December 2023, the FCA published Consultation Paper 23/31: Detailed proposals for
listing rules reforms (CP 23/31). This was part of the
FCA’s mission to reform the UK’s listing regime and
strengthen the attractiveness of UK capital markets. The FCA has
stated that this is a three-year strategy, and as a result, we will
continue to monitor developments as and when they are released.

As part of this reform package, a new draft instrument for the
UKLRs was published on 7 March 2024. The UKLRs are
now to be understood as being in final draft form for consultation
purposes. The newly formulated draft UKLRs not only includes the
initial draft rules, referred to as tranche 1 (published with CP
23/31), but it also incorporates new provisions (tranche 2), with
the key points being explored below.

Simultaneously, the FCA has also published the UK Listing Rules (Consequential Amendments)
Instrument 2024, which sets out the proposed consequential
changes to other FCA Handbook sourcebooks.

KEY POINTS

The additional material proposed in tranche 2 includes the
following:

• With the exception of former Premium Listing Principles 3 and
  4, it is proposed that all the former Listing Principles (Premium
  and those which were applicable to a standard listing) will be
  combined in UKLR 2, together with supporting guidance. Former
  Premium Listing Principles 3 and 4 will instead be inserted into
  the requirements for eligibility for the applicants to be admitted
  into the commercial companies category under UKLR 5 with respect to
  the constitutional requirements.




• Transitional provisions are in place so as not to make the
  UKLRs unduly burdensome on companies with a current standard
  listing. However, it will not be available to new applicants (UKLR
  22).




• Rules for other listing categories other than commercial
  companies category in UKLRs 11 to 19 and UKLR 22 to 23. These
  include rules for closed-end investment funds (UKLR 11), open-ended
  investment companies (UKLR 12), shell companies, including SPACs
  (UKLR 13) and international commercial companies category with a
  secondary UK listing (UKLR 14).




• Rules that apply to all listed securities including preliminary
  rules (UKLR 1), processes and procedures relating to the admission
  for listing (UKLR 20) and rules for all securities which relate to
  suspending, canceling and restoring listing and transfer between
  listing categories (UKLR 21).




• Further detail as to sponsor requirements for closed-end
  investment funds and shell companies (UKLR 4 and UKLR 24).

NEXT STEPS

The consultation period for the full set of policy positions and
the new UKLRs (with respect to tranche 1) still closes on
22 March 2024.

However, the FCA has extended this deadline in relation to the
most recently available material. It will now accept submissions in
relation to the tranche 2 additions to the UKLRs and the
consequential changes instrument until 2 April
2024.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.