Britain’s FCA goes ahead with disputed ‘Aramco’ listing rule

Britain’s markets watchdog will press ahead that has a brand-new premium listing next month aimed at attracting companies like state-controlled Saudi Aramco to London, although the rules have been “refined” following investor criticism.

The Financial Conduct Authority’s initial proposal last year led to suggestions the British government had influenced the watchdog to try to secure the Saudi energy company’s planned initial public offering (IPO).

Saudi Arabia is actually supposed to float up to 5 percent of Aramco in Riyadh as well as also an international venue such as London or brand-new York in what is actually supposed to be the biggest ever IPO as well as also might boost the reputation of its chosen listing venue.

Britain is actually keen to promote London’s leading position as a financial center as which leaves the European Union however some lawmakers had questioned if the original proposal for listings by sovereign-controlled firms could weaken investor protection.

The FCA said which was pressing ahead, despite criticism of its plans by major institutional investors when they were first circulated in July last year.

“The FCA thinks there is actually considerable benefit to investors if corporate issuers agree to meet these additional premium requirements,” the watchdog said in a statement accompanying an 83-page document outlining the brand-new rules on Friday.

The FCA said which had made some alterations following feedback, including the requirement which the election of independent directors be subject to approval via independent shareholders.

There might also be a requirement for “timely disclosures” on transactions between the sovereign as well as also the issuer.

however there will not be a requirement for a controlling shareholder agreement, as well as also no need for an advance sponsor opinion or advance approval by independent shareholders of certain transactions with the sovereign or its associates.

“These rules mean when a sovereign controlled company lists here, investors can benefit via the protections offered by a premium listing,” FCA Chief Executive Andrew Bailey said.

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