UK Trends and Developments Contributed by: Dylan Doran Kennett, Michael Jacobs, Stephen Newby and Mark Ife, Herbert Smith Freehills LLP
not in and of themselves lead to more UK invest - ment, and that an adequate supply of invest - able assets and delivery of broader changes to UK growth will also be key to creating a strong pipeline of opportunities. Leading pension funds have confirmed their support of the UK govern - ment’s ambitions to increase venture and growth capital investment. Revamp of the UK listing regime To improve the competitiveness of the UK’s equi - ty capital markets, the FCA has implemented a radical set of reforms to the UK listing regime, which regulates the way companies list on the London Stock Exchange and their continuing obligations. The new Listing Rules, effective from 29 July 2024, overhauled the UK’s listing regime to align it more closely with international market standards whilst maintaining high standards. The reforms are aimed at encouraging a more diverse range of companies to list and grow on UK markets, while promoting more opportuni - ties for investors. The new Listing Rules included several key components, such as: • consolidating the premium and standard list - ing segments into a single listing category for commercial companies – the Equity Shares (Commercial Company), or ESCC – which is fully eligible for FTSE Russell index inclusion; • eliminating the need for three years of histori - cal financial information and “clean” working capital statement in order to be eligible, and making dual class shares fully available to ESCC companies;
• removing mandatory requirements for control - ling shareholder agreements; • removing shareholder approvals for signifi - cant/Class 1 transactions (except in the case of reverse takeovers) and related party trans - actions; and • reducing the burden of the sponsor role post- IPO for ESCC listings, which will now largely be limited to reverse takeovers, related party transactions or share issuances requiring a prospectus (among other matters). The new UK Listing Rules also have brought a direct benefit to institutional venture capi - tal investors, as such investors may now hold enhanced voting rights for a period of up to ten years following IPO. Founders and other natural persons can hold dual class shares without a time limit. As 2025 progresses, the market can expect additional reforms in the form of an overhaul of the UK Prospectus Rules. The FCA consulted on the new Prospectus Rules between July and October 2024, and aims to finalise them by the end of H1 2025. The FCA has stated that the proposed reforms aim to lower the cost of listing in the UK, make raising capital on UK listed mar - kets easier, and do away with barriers to retail participation.
616 CHAMBERS.COM
Powered by FlippingBook