ARTICLE
28 March 2024

Indicative Update On Impact Of Reform On FTSE Indices

FTSE Russell, which maintains the FTSE indices, has published a notice indicating how the FCA's proposed reform of the UK listing regime will impact FTSE UK indices.
UK Finance and Banking
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FTSE Russell, which maintains the FTSE indices, has published a notice indicating how the FCA's proposed reform of the UK listing regime will impact FTSE UK indices. It anticipates that, if the reforms are implemented in the manner set out in CP23/31, companies in the new Equity Shares (Commercial Companies) and Closed Ended Investment Fund categories will be eligible for inclusion in the FTSE UK indices.

CP 23/31 contained the FCA's proposals for a radical reset of the UK listing regime, with the introduction of a new single segment, the new "Equity Shares (Commercial Companies)" (ESCC) category, to replace the current premium and standard segments. For further information on the proposals, see our blog post here and our snapshot on the ESCC Category here.

  • Premium listed companies – All existing premium listed commercial companies will be automatically migrated to the new ESCC category and so will be eligible for FTSE inclusion. Premium-listed closed ended investment funds will transfer to a separate Closed Ended Investment Fund category and will also be eligible.
  • Standard listed companies – Under the FCA's proposals, existing standard listed companies will – unless they are eligible for admission to a different listing category – be migrated to a new transition category. There will also be an international secondary listing category for overseas companies whose primary listing is in their home market. (For information on the rules that companies in these listing categories will have to comply with, see our blog post here.) FTSE Russell has indicated that companies in these categories will not be eligible for the FTSE UK Index Series. This is consistent with the current treatment of companies listed on the standard segment.

Given that all premium listed companies will move automatically to the ESCC category, and standard listed companies will be moved to the transition category, and so will not immediately become eligible for FTSE inclusion, FTSE Russell are expecting minimal immediate impact to the index composition on day one of the new regime.

FTSE Russell has published an FAQ document with further details.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
28 March 2024

Indicative Update On Impact Of Reform On FTSE Indices

UK Finance and Banking

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