The UK Financial Conduct Authority (FCA) has today set out a proposal for potential reform to the way companies list in the UK.

Under one of the FCA’s suggestions, companies wishing to list in the UK would no longer have to choose between two different segments with different branding and standards.

Instead, all listed companies would need to meet one set of criteria and could then choose to opt into a further set of obligations. These would be focused on enhancing shareholder engagement and be overseen by the FCA.

Feedback to the FCA’s earlier discussion paper, suggested many were keen to keep these additional safeguards. Companies and their shareholders would decide for themselves whether these additional obligations were right for them.

Last year, the FCA moved quickly to improve the listing regime by lowering free float levels, allowing certain forms of dual class share structures and introducing digital financial reporting. These changes promote broader access to listing for a wider range of companies at an earlier stage in their development and help investors use data faster to improve decision-making, while maintaining high standards.

Clare Cole, Director of Market Oversight at the FCA, said:

‘The rules for companies who want to list here have not changed since the 1980s. Now is a good time to have an open conversation to make sure our rules are fit for the future, so we have a more accessible, competitive and growing market that is attractive to a diverse range of companies.’

Last year, was the best year for raising investment for listed companies since 2007. In all £16.9 billion was raised in UK Initial Public Offerings (IPOs) including 126 companies listing on the London Stock Exchange.

However, according to the UK Listing Review, the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008. Between 2015 and 2020, the UK accounted for only 5% of IPOs globally.

The discussion period is open for nine weeks, closing on 28 July 2022.