Financial Conduct Authority
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FSA launches consultation on the sponsor regime
The Financial Services Authority (FSA) today published a consultation paper on amendments to the sponsor regime for Listed companies.
Companies with Primary Listed equity securities or new applicants seeking a Primary Listing of their equity securities to the Official List are required to appoint a sponsor. Sponsors vary from large investment banks to smaller corporate finance houses and have expertise on the Listing Rules and on the London equity market. The FSA, acting as the competent authority for listing, regulates sponsor firms.
The consultation paper sets out proposed changes to the sponsor regime (the rules governing sponsors are set out in LR8 of the Listing Rules). The key proposals are to: clarify the application of the Principles for sponsors; remove the existing concept of the suitability experienced employee to demonstrate competence and replace it with a firm-wide approach to sponsor competence; modernise the approach to sponsor independence by focusing on procedures for identifying and managing conflicts; and revise guidance as to what will generally be accepted as appropriate systems and controls for sponsors.
Director of Markets, Alexander Justham said:
"The sponsor regime is integral to the Primary Listed equity market. With this consultation, we are hoping to ensure the regime is practical, reflects good market practice and ensures that sponsors are clear on the high standards expected of them."
The consultation period will close on 6 June 2008 and final Handbook text is likely to be published in quarter three 2008.
Notes for editors
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
