City rounds on pension schemes over attempt to derail FCA listing changes

City figures have rounded on a group of top pension schemes after they mounted a last ditch attempt to derail the Financial Conduct Authority’s shake-up of listing rules last week. (source City A.M)

In a letter to FCA chair Ashley Alder on Friday, the International Corporate Governance Network and several pension firms, including Railpen and the People’s Pension, raised concerns about an imminent overhaul of listing rules, warning it could weaken shareholder protections.

The Financial Conduct Authority quickly responded, acknowledging that the changes might increase risks in public markets but emphasizing that the plans were developed after extensive industry consultations.

“We understand these proposed changes rebalance risk, which is why we have consulted the industry extensively and will consider all feedback before finalizing the rules,” an FCA spokesperson said.

The plans were quickly initiated by FCA chief Nikhil Rathi last year after Cambridge-based chipmaker Arm chose to list in New York instead of London, partly due to the FCA’s stringent listing rules.

Under the proposed changes, firms would not need to consult shareholders on certain deals and could use long-term dual-class share structures, granting founders more powerful voting rights.

This proposal has unsettled pension funds, which argue that it would dilute shareholder rights and could be detrimental to firm value even in the short term.

However, City figures dismissed these concerns, noting that retirement funds have already been exiting the market for years under the current regulations.

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