Riyadh – Mubasher: Britain’s Financial Conduct Authority (FCA) has denied allegations that it suggested changes to listing rules in order to facilitate the listing of sovereign-controlled companies, Reuters reported on Wednesday.
Media reported that the UK’s financial watchdog was considering relaxing some of its listing measures to persuade Saudi Aramco to list its shares on the London Stock Exchange (LSE)
Saudi Arabia is planning to launch an initial public offering (IPO) for 5% of Saudi Aramco, the largest oil company in the world, on either the LSE or the New York Stock Exchange (NYSE).
Saudi Aramco’s IPO is expected to be the largest in the world, and according to Reuters may “boost the reputation of its chosen venue.”
However, the Saudi giant’s listing has been met with resistance in the UK, particularly from fund managers who are concerned about governance, the news agency said, indicating that relaxing measures would include the FCA’s rule that companies need to float at least 25% of their shares on the bourse. Aramco would list only 5% of its shares.
In July, the FCA proposed a new category of “sovereign-controlled firms seeking a so-called premium listing that would allow them to circumvent that requirement, among others,” according to Reuters, which added that this step has raised concerns over whether the government had influenced the FCA to attempt to get Aramco’s IPO.
Asked if prime minister Theresa May had tried encourage Aramco to list in London, or been involved in the talks, FCA chief executive Andrew Bailey said: “Not to my knowledge”.
The FCA’s top official said that the 25% flotation was not a “hard and fast” requirement, but that he was open to all views on the matter.
“We are talking about a very large entity in this case. I want to be clear this policy is not about one company,” Reuters reported citing Bailey as saying and adding that the FCA was “open now to taking it forward, we’re not closed minded about this.”
Proposal consultations have received many responses on both sides of the argument, Bailey noted.
In February, the FCA spoke of a possibility of launching a new “international” listings category that aims to attract founding families or governments who wish to maintain control rights over the company being listed.
Some investors have said the changes could harm minority shareholders.
