The Financial Services Authority has proposed changes to the requirements for companies to be listed in the UK, including a tightening of the rules around listings for companies managed offshore.

In a 173-page FSA consultation paper published today (26 January), the regulator states it needs to update its listing rules to recognise a new corporate structure, which involves the outsourcing of significant management functions to an offshore advisory firm.

In the paper the regulator outlines new listing rules that would make ‘externally managed companies’ ineligible for premium listing. Firms that use such a structure would still be eligible for standard listing.

The FSA said that this structure places the offshore advisory company beyond many of the key controls within the listing regime and “lessens the ability of shareholders to hold the real management of the company to account”.

The new rules would make the management of the firm’s advisory company responsible for any prospectus issued by the listed company and “subject to existing rules about dealing in the shares of the listed company”.

The shake-up will also narrow existing exemptions from reverse takeover requirements that the FSA hopes will discourage reverse takeovers from being used as a “back-door route to listing for companies that might otherwise be ineligible”.

Proposed changes to the listing rules will also clarify the role of sponsors and discuss the rules concerning premium listings.

David Lawton, acting director of markets for the FSA, said: “It is important that the listing rules continue to keep pace with market developments and the needs of investors.

“We believe that this consultation, which proposes specific changes, but also invites debate about the corporate governance standards that should underpin the premium listing standard, will serve that purpose and welcome responses to help us maintain an appropriate regime for the UK.”

The listing rules are the responsibility of the United Kingdom Listing Authority, which operates under the auspices of the FSA.

Listing rules have been reviewed annually since their introduction in 2000 in order to take account of developments in the market.

To read FTAdviser’s Regulation Tracker summary of this consultation paper, click here.