UK financial watchdog delays market reform targeting Aramco IPO

02 January 2018
The Financial Conduct Authority is still considering consultation responses, and is unlikely to take a decision for weeks

The UK’s Financial Conduct Authority (FCA) has, according to local media reports, delayed making a decision on whether to change capital market rules to lure Saudi Aramco to list a portion of its planned 5 per cent stock offering on the London Stock Exchange (LSE).

The FCA in July last year sought suggestions on proposals to create a new category of premium listing for companies controlled by sovereign bodies. The move was apparently directed towards getting a slice of the Aramco IPO, which could be worth $100bn, and would greatly elevate the stature of the LSE.

The independent watchdog, which had caused controversy last year when its CEO admitted to UK members of parliatment about meeting Aramco officials before proposing to relax market rules, had said that it would publish its new rules by the end of 2017.

According to the local media report, the regulator is still considering consultation responses, and is unlikely to take a decision for weeks.

London, led by UK Prime Minister Theresa May, has been lobbying hard to attract Saudi Aramco to choose the LSE for its foreign IPO floatation. Aramco executives and Saudi authorities have said that the IPO will feature at the Tadawul or the Riyadh Stock Exchange and one or more overseas bourses.

Competition among the major global capital markets is intensifying, as their respective governments are trying to use their influence on Riyadh to win the contest, including US President Donald Trump who is making a strong case for the New York Stock Exchange.

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