The Financial Conduct Authority has strengthened its listing rules to protect minority shareholders in premium listed companies.

The Financial
Conduct Authority has strengthened its listing rules to protect minority
shareholders in premium listed companies.

The new rules
will give minority shareholders in listed companies additional voting rights
and greater influence over key decisions.

The FCA said the rules will ensure listed companies are run independently
of their controlling shareholders, including measures that give independent shareholders a veto over
transactions between listed companies and a controlling shareholder when this
independence is threatened.

Minority shareholders will also have enhanced voting power when a company with a controlling
shareholder seeks to cancel its listing or remove minority shareholders’ rights,
as well as approval over independent directors in addition to
shareholders as a whole.

Greater transparency will also be required from listed companies to ensure shareholders have the
information they need to exercise their voting rights. 

“Active
engagement by all shareholders is essential to make markets work well. By
safeguarding minority interests from abuse by controlling shareholders, these
changes will promote market integrity and empower minority shareholders to hold
the companies they invest in to account," said David Lawton, the FCA’s director
of markets.

The proposals
follow a consultation by the FCA’s predecessor, the Financial Services
Authority, in October 2012, in response to concerns from the investment
community over the governance of premium listed companies with a controlling
shareholder and the rights of minority shareholders.

The new rules are intended to be implemented in mid-2014.