FSA to tighten listing rules to up standards

City A.M. Reporter
THE FINANCIAL Services Authority (FSA) will tomorrow publish tougher new rules on listing in an effort to clamp down on poorly governed firms seeking to take advantage of Britain’s investor base.

Faith in the standards of British-listed companies was undermined last week by the announcement that London-listed Indonesian mining firm Bumi is holding an inquiry into alleged irregularities at subsidiaries.

The FSA proposals are expected to tighten rules on reverse takeovers, as well as addressing the size of free floats, the power of controlling shareholders and boards’ independence.

They are also likely to prevent cash shell companies, small listed companies into which larger private groups are typically folded in a reverse takeover, from joining London’s top indices.

Meanwhile the FSA this weekend increased its estimate of the number of firms affected by interest rate swap mis-selling by 40 per cent.

Acting on new information from banks the regulator upped its estimate from 28,000 to 40,000.

It comes in the wake of the payment protection insurance mis-selling scandal which has seen banks pay out several billions of pounds in compensation to date.