LONDON Jan 30 Britain's financial regulator has
proposed new rules for firms acting as so-called sponsors to
London listed companies, setting out a series of minimum
requirements aimed at protecting investors following scandals
involving two mining companies.
Sponsors, typically investment banks or corporate finance
specialists, provide guidance to companies listed on the London
Stock Exchange's premium segment as well as those
looking to join the market. They also carry out checks to ensure
companies are complying with listing rules.
Their role has been in the spotlight following
investigations into alleged irregularities at Kazakhstan-focused
ENRC, which listed in London in 2007, and Indonesian-orientated
Bumi, which listed in 2011.
Both were hit by corruption probes and shareholder battles
which raised questions about how they came to market.
The Financial Conduct Authority (FCA) said its proposed new
rules, which it will consult with the market on between now and
the end of April, include setting minimum requirements for the
skills, knowledge and expertise of staff at sponsor firms.
It will also ask that sponsors have relevant experience
within the last three years, instead of a previous requirement
that sponsors simply had a range of recent experience and
expertise in providing advice.
"The sponsor regime is crucial to ensuring an appropriate
level of consumer protection and market integrity in the premium
listings," David Lawton, the FCA's director of markets said in a
"Our proposals should clarify our expectations of sponsors
and the standards that we will hold them to."
The changes sit alongside measures announced by the FCA in
November aimed at bolstering its stock market listing rules to
better protect minority shareholders.
The FCA said it was also looking at how well the process of
joint sponsors, where a firm can appoint more than sponsor on a
transaction, works in practice.