FSA proposes 'two tier' structure for LSE listing regime

Source: Exec Digital UK

Date :15/01/2008 09:28:20

The Financial Services Authority (FSA) discusses ways to re-label primary and secondary listing segments to help investors understand which companies follow ‘gold-plated’ regulations.

The move follows criticism by US regulators and warnings from several big British institutional investors about London’s corporate governance standards.

Re-labelling

In a review, published yesterday, the FSA put forward a new structure for the Listing regime which suggested dividing listings into two tiers. This would mean that securities subject to higher standards will be more clearly separated from directive minimum standard.

The FSA proposes re-labelling Primary Listing 'Tier One Listing' and Secondary Listing and GDRs 'Tier Two Listing'.

The financial watchdog said the securities would continue to be admitted to trading and subject to appropriate EU directive based obligations, but they would not be 'Officially Listed' by the FSA.

Secondary Listing

Alternatively, the FSA suggests reclassifying Secondary Listing and GDRs.

David Lawton, head of markets policy at the FSA, said the aim was to enable investors to understand what rules the companies they bought had to follow.

There is confusion about what the different listing categories mean, with "secondary-listed" companies, for example, not needing any primary listing elsewhere.

UK capital markets

In a statement, Sally Dewar, FSA Managing Director of Wholesale and Institutional Markets, said that the FSA was “committed” to ensuring the regime continued to contribute to the international success of UK capital markets while “keeping pace” with changes in global markets."

January 15, 2008