Global investors warn FCA's listings reform will regress shareholder protections

investmentweek.co.uk:

Some of the signatories to the ICGN letter included Allianz GI, AXA IM, Baillie Gifford, Columbia Threadneedle Investments, Impax AM, Jupiter, Newton IM, Robeco and Scottish Widows.

In a letter on behalf of its members, the International Corporate Governance Network (ICGN) said the FCA's proposals to replace the ‘standard' and ‘premium' listing segments with a single one will expose investors to «undue risk», with «potentially significant implications» for pensioners, insurance and retail investors.

«We are particularly concerned by the introduction of a more permissive approach to dual class shares structures — with few shareholder protection safeguards — and the removal of shareholder votes prior to significant transactions and related party transactions,» Kerrie Waring, CEO of ICGN wrote.

Some of the signatories to the ICGN letter included Allianz GI, AXA IM, Baillie Gifford, Columbia Threadneedle Investments, Impax AM, Jupiter, Newton IM, Robeco and Scottish Widows. 

Industry backs 'need for a reset' of UK listings regime

The network argued that, at a time when the FCA is «encouraging investors to play a greater, and more responsible, stewardship role» via voting and engaging with companies, «the imposition of weaker voting rights will have the opposite effect by inhibiting investor influence».

Although ICGN said it understands the rationale behind the FCA's push to reform the listings regime and bolster the attraction of the UK capital markets, it noted that European markets have faced the same predicament.

«We therefore challenge assertions of a need to roll back the UK's corporate governance standards and restrain effective investor stewardship activities through these regulatory proposals,» Waring added.

«Such