As part of an effort to encourage companies to embrace higher listing standards, regulators in the UK are launching a new listing category for state-owned companies.
The U.K. Financial Conduct Authority (FCA) has finalized rules to create a new category to cater to companies that are controlled by a sovereign country, the regulator announced on Friday.
The new regime stems from an FCA initiative that aims to encourage these sorts of companies to choose higher listing standards, which would have a “considerable benefit” to investors, the FCA says in a news release.
Among other things, the new listing category requires the election of independent directors, subject to separate approval by independent shareholders, and sets additional disclosure obligations for related party transactions.
“These rules mean when a sovereign controlled company lists here, investors can benefit from the protections offered by a premium listing. This raises standards,” says Andrew Bailey, chief executive of the FCA, in a statement. “These rules encourage more companies to adopt the UK’s high governance standards.”
The new listings category, which will launch on July 1, recognizes that these sorts of companies are fundamentally different from companies with private controlling shareholders, the FCA says.