Britain Seeks Looser IPO Rules To Lure Saudi Aramco, Worries Investors
LONDON, July 13 (Reuters) - Britain wants to loosen rules on listing state companies in a move that could help London win the lucrative IPO of oil giant Saudi Aramco
The Financial Conduct Authority's proposals on Thursday would create a new listing category for companies controlled by sovereign states and come as exchanges vie to win the Aramco initial public offering, which is set to be the largest ever.
But they met with criticism from British fund managers, who have already expressed concerns about Aramco's governance.
"Investors believe a premium listed segment without these investor protections is not a premium segment and will not provide the protections that investors expect," Chris Cummings, chief executive at the Investment Association said.
Reuters reported earlier this year that the London Stock Exchange was working on a new type of structure that would make the bourse more attractive for Aramco.
"No decision has been made on the venue yet," a source close to Aramco told Reuters following Thursday's proposals, which come as the government and City of London are trying to keep Britain's financial markets attractive to international investors and companies after it leaves the European Union.
The FCA is proposing a new "premium" stock market listing category that will exempt companies controlled by sovereign states from certain requirements and also be available to companies listed in London using depositary receipts, financial instruments used to represent a foreign company's shares.
Companies including Russian state firms Gazprom and Rosneft use depositary receipts on the LSE.
"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," FCA chief executive Andrew Bailey said.
But Ashley Hamilton Claxton, Corporate Governance Manager at Royal London Asset Management said this may reverse progress made on governance and protecting minority shareholders.
"It looks like the FCA is consulting on amending the existing listing rules to accommodate the peculiarities of one company, which is not a very effective strategy for regulating the market as a whole," Hamilton Claxton said.
The London Stock Exchange has made winning the listing of Aramco a priority, with the firm's chief executive Xavier Rolet joining Prime Minister Theresa May on a trip to Saudi Arabia in April. The pair met jointly with the kingdom's sovereign wealth fund, which will play a major role in the listing decision.
The FCA's Bailey told Reuters he had not discussed the proposal with the government.
"It was not instigated by the government or the LSE which we regulate," he said.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- UK Oil Regulator Publishes New Emissions Reduction Plan
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- PetroChina Posts Higher Annual Profit on Higher Production
- McDermott Settles Reficar Dispute
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- USA Commercial Crude Oil Inventories Increase
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call