FCA to clear the way for London Saudi Aramco listing with new rules

The UK's financial watchdog has proposed new rules to make it easier for sovereign state-owned companies like oil giant Saudi Aramco to list their shares in London.

The Financial Conduct Authority (FCA) today launched a consultation on a new premium listing category that will exempt certain companies from rules on related party transactions and controlling shareholders.

The aim of the proposals is to make UK markets more accessible, said FCA boss Andrew Bailey.

London has lobbied to win the initial public offering (IPO) of Aramco, the Saudi state-owned oil giant which is said to be worth about $2 trillion (£1.5 trillion). Aramco wants to sell just five per cent of its total share capital in what is expected to be the world's largest float.

However, some fund managers have expressed concern over bending the rules for Aramco. UK listing rules require a minimum 25 per cent free float to qualify for a premium listing.

“Regulatory protections for investors lie at the core of the listing regime. However, it is important that these protections remain well-targeted," Bailey said.

Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate.

"Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature. Investors have long recognised this and capital markets are well adapted to assess the treatment of other investors by sovereign countries," Bailey said.

The FCA said discussions on the review will continue, and it will release more detailed proposals in due course.

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