Long ago, the UK's Financial Conduct Authority determined to allow open-ended investment companies - which are the legal form that most exchange-traded funds or ETFs usually take - to receive standard listings instead of premium listings. It has now published its ideas for the new regime.

The FCA expects its new policy to be of interest to HNW investors who own shares in premium-listed OEICs or are considering investing in them, and their advisors.

When a company receives a premium listing, the FCA expects it to meet the UK's highest standards of regulation and corporate governance (its "super-equivalent" rules which are higher than the European Union's "minimum requirements," as they call themselves). As a consequence, it may enjoy a lower cost of capital. A premium listing is only available to equity shares issued by a trading company or an OEIC. A standard listing, by contrast, covers the issuance of shares, Global Depositary Receipts (GDRs), debt and securitised derivatives that are required to comply with EU minimum requirements. The FCA bestows it regardless of the company's domicile.

The FCA believes that the current rules are too onerous because they prescribe safeguards, including rights for shareholders to be informed about their investments, that are already present in underlying fund regimes under which the OEICs are already authorised or recognised. In some cases, it thinks, the rules are not relevant or are inoperable for OEICs because they fail to take account of the specific features of OEICs’ business models and/or structures.

It is not proposing to change the underlying regulation for collective investment schemes or fund managers, its statutory authorisation or recognition processes or the "Listing Rule requirement" that an open-ended fund must meet its approval.

It is, instead, proposing to impose a streamlined listing application process without asking any OEIC to publish FCA-approved listing particulars. It has also ceased to want to necessitate the appointment of an FCA-approved sponsor to support any application for listing or any other applications at key points in the life of the OEIC as a listed company.

For OEICs that already have premium listings, the FCA wants to apply the amended listing rules automatically on the date on which they come into force without requiring the OEICs to take further action. The FCA is looking for comments to CP20-05 by 9 June.