Proposal for a new category of premium listing for sovereign controlled companies

July 17, 2017

It has been widely reported that leading international markets, including London and New York, are angling to land the highly-anticipated IPO of Saudi Aramco.

In line with the British government’s stated policy to ensure that London retains its position as the leading international financial centre, the UK Financial Conduct Authority (the “FCA”) has published proposed new listing rules for “sovereign controlled companies”, which would establish a new premium listing category that would permit investors to access such companies’ shares and are intended to enhance London’s attractiveness as a listing venue. The new premium listing category would maintain the existing investor protections applicable to premium listed companies, except for certain related party and controlling shareholder rules.

The FCA considers there to be a clear gap in the market in respect of sovereign controlled companies and that investors and the market are able to assess the additional risks arising from investing in the securities of sovereign controlled issuers. Introducing a new premium listing segment is intended to address this gap and allow for a clearly differentiated listing regime for such companies. However, as companies taking advantage of the new premium listing category would not ordinarily be eligible for inclusion in the leading indices, such as the FTSE indices, no investors would be “forced” to hold shares of sovereign controlled companies.

Read "Proposal for a new category of premium listing for sovereign controlled companies."