UK: The FSA’s Listing Rules Consultation Paper

Last Updated: 8 April 2004
Article by Richard Bull


The Financial Services Authority (FSA) is currently carrying out a fundamental review of the Listing Rules. On 8 October 2003 it published a consultation paper (CP) which outlined its proposals to reform the listing regime against the background of changes to be introduced by European legislation. Responses were invited on the CP and had to be submitted by 31 January 2004.

To a large degree, the future of the listing regime has been dictated by European legislation initiatives designed to deliver a single market for financial services across the EU (known as the Financial Services Action Plan). The key directives which are likely to impact on the listing regime in the future are:

  • The Prospectus Directive (sets out the contents requirements for prospectuses).
  • The Transparency Directive (imposes continuing disclosure requirements on issuers, e.g. financial reporting, major shareholders).
  • The Market Abuse Directive (will harmonise rules on prevention of insider dealing and market manipulation and will govern the dissemination of price sensitive information).

In addition to the European influences, the new Companies Bill will impact on the listing regime. However, this Bill has now been delayed which means that any knockon effects of that Bill will only be known after the listing review is complete.

Key Proposals

The FSA’s proposals for reform will, if implemented, mostly impact equity issuers and sponsors. The FSA is consulting on several key proposals, some of which are:

  • Listing Principles: to introduce six overarching Listing Principles to reflect the fundamental obligations of all listed companies.
  • Corporate Governance: to introduce a listing rule to deal with directors’ conflicts of interest; to give the FSA power to disqualify directors of listed companies for serious breaches of the Listing Rules; to streamline the Model Code and ensure it operates in a way that is complimentary to the market abuse and insider dealing regimes which will be brought in by European legislation.
  • Class Tests: to maintain the existing requirement for shareholder approval of major transactions; and to revise the Class 1 rules so that all transactions that are outside the ordinary course and result in a change in shareholders’ economic interest in an asset are classifiable if they meet specified size thresholds.
  • Sponsors: whether to retain the requirement for issuers to engage a sponsor for new issues and major transactions or to abolish the mandatory requirement and leave it to issuers to decide whether or not to use a sponsor.
  • Delisting: whether to require issuers to obtain shareholder approval in order to delist in certain circumstances so as to protect shareholders.
  • Product Approach: to restructure the Listing Rules sourcebook so that it is divided into three sections under the categories equity, debt and financial products and to incorporate the guidance manual into the rulebook. The FSA is hoping to make the sourcebook more user friendly and flexible.

Listing Principles

As mentioned above, the FSA proposes to introduce six Listing Principles which are intended to provide flexibility, transparency and consistency in interpreting and applying the Listing Rules (rather like the Combined Code where you have general principles and then more detailed rules). The FSA would be able to enforce the principles as rules against issuers. The proposed Listing Principles are that an issuer must:

1 - take all reasonable steps to enable its directors to understand their responsibilities and obligations under the Listing Rules;

2 - take all reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with the Listing Rules, both on initial admission to listing and on a continuing basis;

3 - act with integrity in its relations with holders and potential holders of its listed securities;

4 - communicate information to holders and potential holders of its listed securities as required under the Listing Rules in a clear and timely manner, and to take all reasonable care to ensure that such information is not misleading, false or deceptive;

5 - ensure equality of treatment for the holders of the same class of its listed securities in respect of rights attaching to such securities; and

6 - deal with the Competent Authority on the application of the Listing Rules in an open and co-operative manner.

The impact of the Listing Principles could be far reaching, particularly bearing in mind that directors are exposed to disciplinary action for being knowingly concerned in a breach of the Listing Rules. The fundamental concern with a principlebased approach, particularly where disciplinary action can be brought on the basis of principles alone, is that it is very difficult to measure conduct against principles with any degree of certainty.

Implementation of the proposed changes is planned for the summer of 2005. In the meantime, we will keep this matter under review and consider it again in a later edition of the Review once the FSA reports on the responses it has received on the CP.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions