Creating a new premium listing category to deal with sovereign-owned companies would maintain a high level of governance, while avoiding a situation in which they list on a lighter-governed platform, Financial Conduct Authority chief executive Andrew Bailey (pictured) has told ministers.
Concerns had been raised by Nicky Morgan MP, chair of the Treasury Committee, and Rachel Reeves MP, chair of the Business, Energy and Industrial Strategy Committee, about the FCA’s consultation on proposals to create a new category within its premium listing regime.
The consultation has been widely reported as a byproduct of Saudi-Arabian state-owned oil company Aramco’s efforts to list on the London Stock Exchange.
In a letter to Morgan and Reeves, Bailey said the new premium listing category would meet higher standards than those set as a minimum by the EU, with just some modifications to existing governance and reporting rules “specific to the relationship between the company and its controlling shareholder”.
“These modifications, which we consider reasonable in light of the particular nature of sovereign-controlled companies, would be the key points of difference between the original premium listing commercial company category and the proposed new category,” said Bailey.
In response, Morgan and Reeves separately reiterated their keenness to monitor the situation and seek further feedback.
“The UK’s world-class reputation for upholding strong corporate governance must not be watered down,” said Morgan.
“The committee will examine this further when it takes evidence from Mr Bailey later this month.”
Reeves said: “It is not at all clear how taking these steps will boost jobs, investment or returns to investors in the UK and I look forward to examining the FCA’s proposals once their consultation has concluded.”