FCA Creates a New Premium Listing Category for Sovereign Controlled Companies

July 2, 2018

On 8 June 2018, the Financial Conduct Authority amended its Handbook to create a new premium listing category for sovereign controlled companies (“SCCs”).

The new rules, which took effect on 1 July 2018, are designed to attract more SCCs to the UK’s capital markets, particularly in light of the recent global increase in the listing of SCCs as part of government privatization programmes. Important accommodations under the new premium listing category include allowing SCCs to obtain a premium listing without having to:

  1. enter into a relationship agreement with their sovereign controlling shareholders; or
  2. obtain an advance fairness opinion from a sponsor or independent shareholders’ approval prior to entering into related party transactions (other than share buybacks) with their sovereign controlling shareholders.

In addition, SCCs will be able to obtain a premium listing of depositary receipts as well as equity shares. All other premium listing requirements will, however, apply to SCCs listed on the new premium listing category.

This memorandum provides a summary of the new rules and their impact on listings of SCCs in the UK.