Proposed new rules to encourage companies to list their shares in the UK — and for the regulation of bond and derivatives trade information — have been unveiled by the UK’s Financial Conduct Authority (FCA).

The proposals are aimed at making the UK’s listing regime “more accessible, effective, and competitive.”

The FCA said that according to the UK Listing Review, the number of listed companies in the UK has fallen by about 40% from a recent peak in 2008.

It said that between 2015 and 2020, the UK accounted for only 5% of initial public offerings (IPOs) globally.

“In May, the FCA consulted on what a new regime could look like,” said the FCA.

“In its detailed proposals published today, it has kept the suggested change to a simplified listing regime with a single listing category, with streamlined eligibility and ongoing requirements, aimed at encouraging a greater range of companies to list in the UK and compete on the global stage.

“The FCA has also retained the idea, set out in the earlier consultation, of moving to a disclosure-based regime – one that puts sufficient information in the hands of investors, so they can influence company behaviour and decide how they want to invest.

“The FCA is suggesting disclosures for significant transactions while keeping sponsor scrutiny of related party transactions, rather than the current mandatory votes.

“Shareholder approval for key events such as reverse takeovers and de-listing would, however, remain.

“The proposals could entail an increased possibility of failures, but the changes set out would better reflect the risk appetite the economy needs to achieve growth.

“As a result, the FCA has engaged widely ahead of the consultation and has taken feedback into account. The FCA now wants to hear from all sides of the market on the detailed proposals before a decision is made on the final rules.”

On bond and derivatives trade information, the FCA said: “The FCA is also delivering a key element of the Edinburgh Reforms by confirming the regulatory regime for a bond market consolidated tape.

“The tape will provide investors with trade and sales data quicker and more cheaply.

“The FCA is introducing a consolidated tape for bonds, for which the UK is one of the world’s largest markets, before outlining next steps for shares in 2024.

“Additionally, measures to significantly increase the information that is published in real time have been set out which will improve the bond and derivative markets’ ability to establish a fair price, and help investors buy or sell.

“These proposals will make sure that data that will go into the forthcoming bond consolidated tape is standardised, complete and of high-quality.

“The proposals will help investors hold their brokers accountable which will improve the competition for their services and enable market participants to manage risk and maintain market stability.”

Bim Afolami, Economic Secretary to the UK Treasury, said: “The UK is Europe’s leading hub for investment but it’s a competitive world and we are by no means complacent.

“We want to make the UK the global capital for capital, attracting the brightest and best companies in the world.

“We are strengthening the UK as a listing destination, taking forward reforms to make it quicker to list, improve disclosure and make our capital markets more efficient and open.”

Sarah Pritchard, Executive Director, Markets and International, at the FCA said: “We are working to strengthen the attractiveness of UK capital markets and supporting UK competitiveness and growth.

“As we do so, it is important that others consider what they in turn can do, to make sure the UK remains an attractive place for companies to raise capital.

“We welcome feedback on our detailed proposals to make sure that we have the balance right as we seek to set the standards for the years and decades ahead.

“The UK is a world leader for bond and derivative markets, and we want to make it better by ensuring investors have access to better, quicker, clearer and cheaper data.”

Tom Lee, head of trading proposition, Hargreaves Lansdown, said: “Hargreaves Lansdown looks after £50bn invested directly into equities on our platform, with around 80% of trades taking place on the London markets.

“A successful listings regime which supports our home market is essential.

“However, making the UK an attractive place to list has to be balanced with rights for shareholders and ensuring that the quality of the market is not diluted.

“We are therefore concerned that the FCA is pushing forward proposals that do not allow for shareholder votes on significant and related party transactions.

“The plans to have no mandatory sunset clause on dual class share structures has the potential to create a permanent two-tier share structure which is not welcome.

“We are also disappointed that the opportunity to boost retail access to IPOs was not taken with this review of listings rules.

“It is therefore essential that the forthcoming review of the prospectus regime in 2024, puts improving retail investors’ rights at its heart.

“The regime cannot continue to be the barrier to retail investment which it is today.

“Boosting retail investment on the stock exchange will have wider market benefits providing depth and liquidity, as well as boosting interest in investment with the wider public, unlocking further capital for UK-listed companies.

“Building an understanding of how investment plays a part in long-term financial resilience is essential.”