London Registrars (https://www.london-registrars.co.uk/) reports on news that the London Stock Exchange (LSE) is consulting on whether to tighten the listing requirements in a bid to meet higher corporate governance standards.
The LSE proposes that the amount of free float required for a Premium listing on the LSE could be raised by 15 to 25%. The reasons behind the proposed raising of requirements to listing on the exchange is the fact that some companies are being listed on the FTSE100 without meeting the free float requirements or those of corporate governance. The LSE also believes that some firms outside of the UK are sidestepping the regulations which stipulate that they must have at least 50% free float by setting up UK holding companies prior to being listed. Speaking to the Institute of Chartered Secretaries Association’s (ICSA) Chartered Secretary Magazine’s Chris Woods, the head of Index Governance and Policy of the FTSE Group commented, “This is something that we have been considering for a while….it has added impetus right now given the trend for, mainly Russian resources companies seeking a UK incorporation.”
In the same consultation document, the LSE stated that it may create a new set of UK indices on which to measure standards of corporate governance in order to bring them in line with the UK Corporate Governance Code, a suggestion welcomed by the Association of British Insurers (ABI). According to a statement from the ABI quoted in the ICSA Chartered Secretary Magazine, “The ABI welcomes the FTSE consultation on index listing and believes this is a positive step in beginning to address concerns over the quality of the UK equity markets including the impact of new listings”.
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