An analysis of FCA rule changes effective 3 December 2021 to try to attract more issuers, particularly high-growth and technology businesses, to undertake IPOs in the UK.
On 2 December 2021, the FCA published a series of rule changes for the UK listing regime. The changes become effective today subject to some transitional rules and save for some further technical changes which will be effective from 10 January 2022.
The aim of these amendments is to ensure that the UK remains a competitive and attractive place to list a business as compared with other major stock markets, particularly in the US and China. These reforms, along with a wider review of the listing regime, were introduced in an FCA consultation in July 2021 on the effectiveness of the UK primary markets (CP21/21). This consultation followed the recommendations of Lord Hill's UK Listing Review, which were published in March 2021.
The key changes are as follows:
- ability to obtain a premium listing with a specific form of dual class share structure;
- 'free float' requirement reduced from 25% to 10%; and
- minimum market capitalisation increased from £700,000 to £30 million.