LONDON, July 13 (Reuters) - Britain’s financial watchdog is proposing new rules that will create a new listing category for companies controlled by sovereign states on the country’s stock markets.
The proposals come just as exchanges around the world are trying to win the listing of state-controlled oil giant Saudi Aramco, which is expected to be the largest initial public offering (IPO) in history.
Reuters reported in May that the London Stock Exchange was working on a new type of listing structure that would make it more attractive for Aramco to join the bourse.
The Financial Conduct Authority (FCA) said on Thursday that currently there is a gap in the Britain’s listing rules for companies controlled by sovereign companies. It said it is proposing a new “premium” stock market listing category that will exempt companies controlled by sovereign states from certain requirements.
Under the FCA’s proposals, sovereign-controlled companies will be able to obtain a “premium” listing on the London Stock Exchange without complying with certain rules on related party transactions and controlling shareholders.
Currently companies which do not meet Britain’s “premium” listing requirements have to take a standard listing. These are seen as less attractive for investors and companies as they have lower corporate governance requirements, do not qualify for entry into most stock indices and have connotations of being second best. (Reporting by Clara Denina; Editing by Rachel Armstrong)