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

[tag|fca|]The Financial Conduct Authority[/tag] 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.