Special Rules Won’t Fly For Aramco IPO

3 Aug 2017   Saudi Arabia

The UK Institute of Directors has criticized the Financial Conduct Authority’s proposal to amend listing rules that would accommodate Saudi Arabia’s oil giant Aramco, which is planning to list 5 percent in London next year. According to the organization, which brings together business leaders from all industries, such a rule change is not justified and it might compromise London’s reputation for corporate governance. The FCA, UK’s financial markets regulator, had previously proposed a new category within its rules for premium listings, “to cater for companies controlled by a shareholder that is a sovereign country.” The aim was to convince Aramco to go for the premium, rather than the standard, listing. Aramco wants to sell just 5 percent, but under FCA rules, a company qualifies for a premium listing only if it has a minimum 25 percent free float, meaning that Aramco’s 5-percent listing would fall significantly short of qualifying—that […]

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