REORGANISATION: 'listing principles' categorise rules for equity, debt and financial products

City solicitors have welcomed plans from the Financial Services Authority (FSA) to implement a complete overhaul of the listings regime - although some have expressed concern about a watering-down of existing standards.

Launching a consultation on changes to the current system, the FSA said the processes had not been reviewed for a decade and included 'irrelevant rules' and loopholes.

It proposes the introduction of a set of high level 'listing principles' which would be enforceable like other listing rules and moots reorganising rules and guidance into the categories of equity, debt and financial products.

It also examines whether current standards - higher than those laid down by the European Union (EU) - should be retained in relation to eligibility requirements for equity issuers and debt issuers, and suggests the possibility of bringing overseas issuers with primary listings into line with UK issuers.

The introduction of greater powers for the FSA to disqualify directors is also on the table, along with the introduction of a requirement for companies to obtain shareholder approval where an issuer intends to de-list.

Richard Ufland - a partner at City law firm Lovells and head of the Law Society's company law committee working party on the listing regime - urged commercial specialist solicitors to respond to the proposals before the cut-off date of 31 January 2004, as they would mean 'important changes' to the system.

'While on some points the FSA's views are already fairly clear, for example, on de-listing and introduction of high level listing principles, on others, such as the abolition of sponsors, they have less clearly formed views and there is likely to be more scope to influence views,' he said.

James Palmer - a corporate partner at Herbert Smith and chairman of the City of London Law Society's company law sub-committee - said solicitors had long awaited a complete review of listings and welcomed FSA consultation on the issues.

However, he called for caution on getting rid of super-equivalence on listing rules for companies.

'In the UK we impose additional obligations on listed companies - for example, the so-called "class tests" - under which certain matters require shareholder approval,' he said.

'These are widely regarded as very important and my expectation is we will argue strongly for the continued ability to have super-equivalent rules, over and above the minimum EU standard.'

Paula Rohan