Norway’s Norges Bank Investment Management (NBIM) said proposals in the Financial Conduct Authority’s (FCA) UK Primary Markets Effectiveness Review could harm the UK’s reputation as a market with high corporate governance standards.

In a letter to the FCA published today, the manager of the NOK12.4trn (€1.1trn) Government Pension Fund Global said the authority’s suggested reforms to listing rules would result in weaker investor protection.

The letter was sent to the FCA in response to its consultation on the ’Primary Markets Effectiveness Review: Feedback to DP22/2 and proposed equity listing rule reforms (CP23/10)”, which has been open since May and closed on 28 June.

The FCA has been canvassing views on proposed rule changes to create a single listing category for shares in commercial companies.

NBIM told the FCA it understood the aim of keeping the UK attractive as a global capital market, and recognised the challenges posed by fewer IPOs over recent years.

“However, we are concerned that the suggested reforms to the listing rules would result in weaker investor protection and could harm the UK’s reputation as a market with high corporate governance standards,” wrote Carine Smith Ihenacho, NBIM’s chief governance and compliance officer, and Elisa Cencig, senior ESG policy adviser in the letter.

They also said they were concerned about the proposal to broaden the availability of dual class shares and to remove shareholder votes on both related party transactions and significant transactions.

“We believe that the ‘one share, one vote’ principle is the best regime to secure the fair treatment of all shareholders,” the NBIM pair wrote.

Voting rights should correspond to investment capital to ensure that shareholders had appropriate incentives when exercising voting rights over fundamental company decisions, they said.

Earlier this week, UK pension funds raised concerns that the FCA’s proposed equity-listing rule reforms would make UK-listed companies less attractive to investors and dilute shareholders rights.

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