The FSA has scrapped its dual-listing proposals after industry and Government concerns they risked allowing a re-run of the split-cap crisis and will now consult on a new single listing regime for all UK and overseas investment companies.
As exclusively revealed by Money Marketing last December, The Association of Investment Companies, leading advisers, trade bodies and MPs had warned that FSA plans to relax listing rules for overseas investment firms endangered investor protections and would leave advisers unable to make proper risk evaluations.
The original proposals would have allowed overseas investment companies to list under the directive minimum chapter 14, meaning they would not have to declare cross-holdings or have an independent board and could have opened up the potential for a “magic circle” to be formed.
But in a statement released last week, the FSA says it has reconsidered its proposals after listening to industry concerns.
AIC director general Daniel Godfrey says: “This is very positive news. We were worried that a two tier regime would create substantial risks to both the industry and consumer and we are glad the FSA has listened.
“This new consultation presents the opportunity to sweep away much of the red tape and outdated regulation to create a genuinely competitive single tier, that gives the consumer greater choice whilst also retaining important investor protections”.
FSA wholesale managing director Hector Sants says: “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. We are persuaded by the responses that have indicated a preference for a single regime.
“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. We will explore those issues in a separate paper later this year.”