FCA lowers public share percentages for public companies

The UK’s Financial Conduct Authority (FCA) will change the amount of shares an issuer is required to have in public hands from 25% to 10%.

It hopes this will reduce barriers for issuers created by current requirements.

The changes come as part of its goal to ensure the UK’s public markets remain a trusted and attractive place for companies to list.

These changes were based on recommendations made in the UK Listing Review and the Kalifa Review of UK FinTech.

Another one of its changes will allow a targeted form of dual class share structures within the premium listing segment to encourage innovative, often founder-led companies, onto public markets sooner. This will broaden the listed investment landscape for investors in the UK, it said.

Its final change will increase the minimum market capitalisation threshold for both premium and standard listing segments for shares in ordinary commercial companies from £700,000 to £30m. By doing this, the FCA hopes to give investors better trust and clarity on the types of companies with shares admitted to different markets.

These new rules will enter into force on 3 December 2021.

FCA director of market oversight Clare Cole said, “We need to act to meet the needs of an evolving marketplace. These changes ensure the UK’s markets maintain their reputation for dynamism, helping support the new types of companies seeking the investment that drives economic growth and by giving investors more choice with appropriate protection.

“Over the last few months, we have moved quickly to address areas where our rules could be improved to encourage innovation in primary markets. By taking this agile approach, we are pleased that new IPOs in 2022 will be able to benefit from the revised rules.”

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