Shearman & Sterling LLP | FinReg | UK Listings Review Recommends Major Overhaul of the UK’s Listing and Capital Markets Rules
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  • UK Listings Review Recommends Major Overhaul of the UK’s Listing and Capital Markets Rules

    The U.K. Government has published the report by Lord Hill on the U.K. Listings Review.  The report assesses how, following Brexit, the existing U.K. listing regime could be reformed to attract more companies, particularly innovative technology and life sciences companies, to raise capital in London.  In the context of Brexit, the U.K. is considering the challenges to London's position as a global capital markets hub. The Review makes 14 specific recommendations to address these challenges, including changes to the Financial Conduct Authority's premium and standard segment listing rules on which the FCA will be asked to consult and more general changes in relation to prospectuses on which HM Treasury will need to consult. In addition, the Review identifies longer- term areas for reform, such as secondary capital raises and the greater empowerment of retail investors. Some of the specific recommendations included in the Review are:
    • dual class share structures to be eligible for a premium listing subject to the super voting shares having certain restrictions as to their life, ratio and voting matters, etc.;
    • removing the current listing suspension rule as it applies to special purpose acquisition companies, known as SPACs (or to SPACs of a certain minimum size) and replacing that with minimum disclosures that must be made when announcing the de-SPAC and SPAC investor rights to vote on, and redeem their SPAC investment on, the acquisition taking place;
    • reducing the existing 25 percent minimum free float requirement (of an issuer’s shares in public hands) to 15 percent in both listing segments;
    • significant changes to the prospectus requirements aimed at making a prospectus a much more useful and less onerous document for investors to read and issuers to prepare; and
    • a full review of the onshored U.K. Prospectus Regulation and other listed company regulations, such as the U.K. Market Abuse Regulation.

    View the UK Listing Review report.

    You may like to view our client note, "UK Listing Regime Reform", March 8, 2021.

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