The FCA has today published final updated UK Listing Rules representing the biggest overhaul to London's listing regime in over three decades.

The new rules are a significant step forward for UK capital markets and set out a simplified London equity listing regime with a single listing category, streamlined eligibility requirements and standards more aligned with international markets.

New UK listing regime

The FCA has today published a policy statement (PS24/6) containing final rules for London's updated listing regime. The new UK Listing Rules ("UKLRs") follow an extensive process of market engagement by the FCA and mark the culmination of an almost three-year project.

Many of the key proposals previously announced in December 2023 (CP23/31) – including creating a single listing category for equity shares in commercial companies – remain broadly unchanged. As expected, the proposal to remove shareholder votes on significant and related party transactions has also been retained, as well as increased flexibility around dual class shares with enhanced voting rights.

There are, however, several important updates to the previous proposals in key areas following feedback received by the FCA, including:

• flexibility on significant transaction (≥25%) notifications: the previously proposed disclosure-based approach without shareholder vote is retained, but there is now more flexibility on the contents and timing of the mandatory transaction notification: (i) the required non-financial disclosures have been slightly streamlined and may now be delayed until as soon as possible after they have been prepared or are known and, in any event, by no later than completion; and (ii) two years of audited accounts where available are now only required for disposals and notification may also be delayed on the same basis. In addition, there is a new requirement to notify that completion has taken place and that there has been no material change affecting any previous notification;
• wider holding of dual class share structures ("DCSS"): institutional investors were not previously able to hold enhanced voting rights through DCSS under the FCA's proposals, but are now able to do so alongside natural persons (e.g. directors or shareholders who are individuals) subject to a maximum exercise period of 10 years – this "sunset" time limitation does not apply to DCSS held by directors or other natural persons; and
• controlling shareholder agreements no longer required: mandatory relationship agreements with controlling shareholders – which have been a feature of the UK listing regime for the last decade – will no longer be required. The requirement that a company be independent from any controlling shareholder is retained, however, and there is new guidance on factors indicating that this is not satisfied, as well as a mechanism for directors to opine on any resolution proposed by a controlling shareholder which they consider is intended to circumvent the proper application of the UKLRs.

Sponsor guidance

The FCA has also today launched a consultation on proposed revisions to certain Technical Notes relating to the sponsor role following feedback received during the UKLR consultation process.

The proposed updates are set out in Primary Market Bulletin 50 and include, among others, further guidance on the FCA's expectations around the sponsor's role coordinating due diligence in specialist areas, measures designed to streamline and focus the process of sponsor record-keeping and a new technical note explaining the FCA's approach to supervisory reviews of sponsors.

Next steps

The new UKLRs will come into force on Monday 29 July 2024 and at this time the current Listing Rules sourcebook will cease to have effect and be replaced by the new UKLR sourcebook. As previously proposed, transitional provisions are included in the UKLRs to avoid a cliff-edge in requirements for companies and to clarify impact on "in-flight" transactions. The FCA has further noted that it will formally review the new UK listing regime in five years' time to assess the impacts on all parts of the market.

Separately, the FCA and regulators more broadly in the UK will also continue to review the UK capital markets landscape with a view to making further regulatory changes, including around the prospectus regime.