FSA To Pursue Single Listing Regime For UK

by Robin Pilgrim, LawAndTax-News.com, London

09 April 2007

The UK Financial Services Authority (FSA) has published an update on the investment entities listing review which is to lead to a further consultation on a proposed single listing regime for all UK and overseas closed-ended investment funds.

The update was announced in response to feedback received from the Investment Entities Listing Review. The consultation proposals, published in December 2006, included clarifying the importance of a company's investment policy; explaining the FSA's decision to withdraw its proposal to abolish the directive minimum regime for overseas investment companies, and introducing new listing categories to make it clear to investors what obligations a listed company is subject to.

"Throughout our consultation on this aspect of the listing rules, we have been conscious of our responsibility to protect investors while having regard to the competitiveness of the UK market," said Hector Sants, FSA Wholesale Managing Director. "We are persuaded by the responses that have indicated a preference for a single regime. This will form the basis of our proposals when we consult in June."

"The consultation has also sparked an important debate about the nature of the wider listed market and the segments of the listing regime that carry differing levels of regulatory requirements particularly with regard to overseas companies," Sants added. "We will explore those issues in a separate paper later this year."

In CP06/21 the FSA consulted on the appropriate listing regime for investment entities both based overseas and in the UK. Currently overseas companies are able to list under the 'directive minimum' requirements set out in Chapter 14 of the Listing Rules. Domestic funds are required to list under the more onerous Chapter 15.

There were a large number of responses to the consultation with general agreement on the objective of making the UK regime more attractive to less traditional funds. No one single solution to achieving this gained uniform support but the favoured route was through a single regime for all UK and overseas closed-ended investment funds based on modifying Chapter 15. This regime would be designed to achieve the appropriate levels of investor protection combined with the ability to be attractive to less traditional funds such as private equity and hedge funds.

A consultation paper setting out details of the proposed single platform will be published in June with a view to implementation taking place in Q1 2008.

Over the next few months the FSA will also hold discussions with stakeholders about the structure and quality of UK listed markets with the aim of publishing either a discussion or consultation paper on the topic later in the year.

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