UK regulator adopts choice in domestic stock listing standards

September 25, 2009

LONDON, Sept 25 (Reuters) – Britain’s market watchdog will offer domestic firms a choice of stock market listings, putting them on an equal footing with foreign companies to help keep London competitive as a financial centre.

The Financial Services Authority said on Friday its board has adopted changes to allow UK companies to chose between a “premium” or less onerous “standard” regime, as long as they tell investors clearly which one they have chosen.

Premium listings will have to meet Britain’s “super equivalent” standards which the FSA says are higher than the European Union’s minimum requirements.

The premium segment would only be open to equity securities issued by commercial companies, and closed and open ended investment entities.

Standard listings will cover issues of equities, global depository receipts and debt and securitised derivatives.

An FSA spokesman said ending a “one size fits all” regime for UK companies will improve the listings regime but legal experts said the watchdog was under pressure from smaller firms.

“The FSA seems to have been pushed by small companies to bring this change forward,” said Louise Wolfson, a partner at Allen & Overy law firm.

“We expect any larger UK companies to continue to seek a premium listing given that this is the only way to gain admission into the FTSE UK index at this stage,” Wolfson said.

The FSA first unveiled its proposals last year, saying they help keep London a major competitor globally. The standard segment will become available for domestic firms from Oct. 6.

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