26/09/2017 12:00 AST

Britain's financial watchdog on Monday defended plans to relax rules on listing state companies which corporate governance groups say could leave investors with less protection.

The FCA in July proposed a new listing category for companies controlled by sovereign states in a move seen as helping London win the initial public offering of oil giant Saudi Aramco, which is likely to be the largest ever IPO.

"We want to see London markets develop, we want to see them innovate, but we want to see it happen in a sense transparently and safely, and the reason we put the proposal forward as we did is that we think that does achieve it," Financial Conduct Authority Chief Executive Andrew Bailey said.

The plans have attracted the attention of the British parliament's Treasury Select Committee and Energy and Industrial Strategy Committee, which are chaired by Nicky Morgan and Rachel Reeves respectively.

They wrote an open letter to Bailey in September asking if the change could weaken “protection for private investors against interference from foreign sovereign company owners”.

"I will reply to the letter Nicky Morgan and Rachel Reeves sent to me," Bailey told the Reuters Financial Regulation Summit in London.

"There are strongly held views on both sides of this."

The FCA’s proposals were applauded by Britain’s financial lobby groups as helping to ensure the country’s capital markets remain attractive once it leaves the European Union.

But they got a cold reception from investors and corporate governance groups, who say a proposed new listing category could lower the quality of companies on the London stock market, and leave shareholders exposed when things go wrong.

"Some of the commentary from some of the people has suggested that the premium listing category is monolithic and therefore we’re compromising the whole premium listing category which we’re not, because it’s actually a series of categories under the premium listing."

"The premium listing category is what would be called in another language "gold plating" because basically the standard listing category is the minimum EU requirements, premium listing is a level above that in terms of requirements."

Morgan and Reeves also asked the regulator to explain if Aramco’s interest in listing in London influenced the consultation and whether companies controlled by sovereign entities engaged in it.

Aramco has yet to decide where it will list, although London and New York have been touted as frontrunners for the bulk of the public flotation.

Bailey said he was not aware when Saudi Aramco would make a decision on where it would list and the regulator was "not working to any timetable".

"This is a proposal for all time not Saudi Aramco, but it’s a transparent process so they can observe what's going on as well as anybody else can."


Reuters

Aramco sponsors SPE Symposium

25/04/2018

Saudi Aramco is participating as a Diamond Sponsor and exhibitor in the Society of Petroleum Engineers (SPE) KSA section’s Annual Technical Symposium & Exhibition (ATS&E). The event is taking place a

Saudi Gazette

Saudi Aramco arm to start Asian crude trading in third quarter of 2018

25/04/2018

Saudi Aramco's trading arm plans to start handling crude in Asia through its office in Singapore in the third quarter of this year and aims to boost its volumes for trading crude and refined products

Times of Oman

SNC-Lavalin wins Saudi Aramco gas plant contract

19/04/2018

SNC-Lavalin, a leading engineering and construction group, said it has been awarded a multimillion-dollar contract by state oil giant Saudi Aramco to install additional facilities at its Wasit Gas pl

Trade Arabia

Ticker Price Volume
QNBK 151.50 114,023
BURUJ 33.70 111,452
SACO 131.80 10,317
SAICO 20.20 340,877
SABIC 121.17 3,414,217
WALAA 33.44 590,869
STC 83.51 180,817
Ticker Price Change
FOOD 0.00 0.00 (0.00%)
Aramco sponsors SPE Symposium

25/04/2018

Saudi Aramco is participating as a Diamond Sponsor and exhibitor in the Society of Petroleum Engineers (SPE) KSA section’s Annual Technical Symposium & Exhibition (ATS&E). The event is taking place a

Saudi Gazette

Manazel Real Estate wins Housing & Urban Development Award

25/04/2018

Manazel Real Estate PJSC, a leading UAE developer, has won the prestigious Housing & Urban Development Award at the 2018 Global Infrastructure Congress. The award was presented by Dr. Abdullah Belhai

Saudi Gazette

Saudi Aramco arm to start Asian crude trading in third quarter of 2018

25/04/2018

Saudi Aramco's trading arm plans to start handling crude in Asia through its office in Singapore in the third quarter of this year and aims to boost its volumes for trading crude and refined products

Times of Oman

QNB-Simplify e-commerce’ product looks to support SME digitisation programme

25/04/2018

QNB has launched its ‘QNB-Simplify e-commerce’ product for small and medium enterprises (SMEs) as part of efforts to support the government’s initiative of Digital Transformation of SME programme (DT

Gulf Times

Barwa Real Estate Group posts QR405m net profit for Q1

25/04/2018

Barwa Real Estate Group’s net profit attributable to the shareholders of the parent company reached QR405m and earnings per share at QR 1.04 for the first quarter of 2018, down from the net profit o

The Peninsula