A reminder of the ongoing reforms to implement recommendations from the Lord Hill and Kalifa Reviews.

By James Inness, Anna Ngo, and Johannes Poon

The outcome of the UK Secondary Capital Raising Review, launched on 12 October 2021 to improve further capital raising processes for UK publicly traded companies, was published by HM Treasury on 19 July 2022. (For further details, please see this Latham blog post).

Below is a recap on the other key developments on reforming the UK capital markets following the Lord Hill and Kalifa Reviews.

Prospectus Regime Reform

On 1 March 2022, HM Treasury announced its proposals (following consultation) to create a more dynamic and flexible UK prospectus regime with the FCA to play a central role through enhanced rule-making powers. The Financial Services and Markets Bill that was introduced to Parliament on 20 July 2022 includes provisions to revoke retained EU law relating to the existing prospectus regime which would enable the implementation of the proposed reforms.

For further details, please see this Latham blog post.

Listing Regime Reform

On 26 May 2022, the FCA published a discussion paper seeking further views on how to improve the UK listing regime. The key proposal is to unify the premium and standard listing segments into a single segment (incorporating many of the requirements under the current premium listing segment). The deadline for responses was 28 July 2022. Further consultations and discussions will likely follow before the new regime is settled.

For further details, please see this Latham blog post.

Removal of Certain Listing Barriers

On 2 December 2021, the FCA confirmed key changes to its listing rules that took effect from 3 December 2021:

·         Premium-listed issuers may adopt a targeted and time-limited form of dual class share structure.

·         Minimum free float requirement is lowered from 25% to 10%.

·         Minimum market capitalisation requirement on IPO is raised to £30 million (from £700,000).

For further details, please see this Latham blog post.

SPAC Reform

From 10 August 2021, UK-listed special purpose acquisition vehicles (SPACs) that meet certain criteria would no longer be subject to the presumed trading suspension of their shares upon announcement of a de-SPAC.

For further details, please see this Latham blog post.

Regulatory Framework Review

In July 2021, HM Treasury launched the Future Regulatory Framework Review to transfer greater rule-making powers to the FCA. The consultation closed on 9 February 2022. The Financial Services and Markets Bill will implement the outcomes of this review.

For further details, please see this Latham blog post.

Other Recommendations

Stakeholders are awaiting progress on the following industry concerns relating to the wider financial ecosystem that affect the attractiveness of the UK as a listing venue:

·         Unlocking pension investment

·         Competitive tax environment

·         Small and medium enterprises (SME) research provision