Changes to FCA Listing Rules increase requirements for delisting a premium listed company with a controlling shareholder.

On 1 May 2014, the UK’s Financial Conduct Authority (FCA) announced changes to Listing Rule 5, which come into force on 16 May 2014. The changes affect premium listed companies with a controlling shareholder — meaning a shareholder who, together with their concert parties, controls 30 per cent or more of the company’s voting rights.

The new rules require a company with a controlling shareholder wishing to cancel its premium listing to obtain the approval of both (i) a simple majority of the votes attaching to the shares of the independent shareholders voting on the resolution, and (ii) at least 75 per cent of the votes attaching to the shares of all of those shareholders voting on the resolution. This enhanced requirement recognises that cancelling a listing removes significant rights of participation in the governance of a company from shareholders, and is intended to ensure that minority shareholders in a company with a controlling shareholder are given a proper say in that decision.