Regulatory Strategy 2008

As one of Europe’s leading diversified exchange groups, London Stock Exchange Group is an active participant in international and domestic regulatory debates.

This page contains links to recent submissions and responses on behalf of the Group, or certain entitites within the Group.

October 2008

Response to HM Treasury's consultation on amendments to Part 7 of the Companies Act 1989 London Stock Exchange Group support the changes proposed in this consultation. We agree that the measures proposed to enhance and support central counterparty clearing, which is a key element of Part 7, are crucial for what is recognised as a vital element of market infrastructure; helping to guarantee transactions and produce efficiencies of risk management. We encourage Treasury to implement these changes as soon as possible, but we also make the point that Treasury's changes do not go far enough. Recent experience suggests that a fundamental review of default arrangements for the UK markets in all instruments is required.

Response to HM Treasury's consultation on the extension of the statutory regime for issuer liability London Stock Exchange Group has responded to this consultation. We welcome the review of the UK liability regime and the work that is being undertaken by the Government to shape and direct UK law. We support the proposals to include issuers of all securities admitted to trading on a UK Regulated Market or MTF. However, we seek some clarity on the scope of disclosure that is covered by the regime.

 September 2008

Response to CESR call for evidence on post-trading infrastructures London Stock Exchange Group has responded to CESR’s call for evidence on identification of regulatory arrangements for post-trading infrastructures and advice on possible solutions in terms of bridging any potential differences in these arrangements.

Response to the FSA's consultation on proposals for amendments to the Sponsor Regime. London Stock Exchange Group has responded to this consultation. We support the FSA's objective to modernise the sponsor regime for London Stock Exchange's Main Market and in so doing, move it to a more principles-based regime that is practical and reflects good market practice. However, we query the proposals that could result in a significant level of responsibility and liability being placed on issuers for the identification and management of conflicts of interest within its sponsor firm.

Response to the FRC's consultation on proposals for future arrangements for funding the FRC's activities in relation to accounting, auditing and corporate governance. London Stock Exchange Group has responded to this consultation. Whilst we support the work of the FRC, we raise concerns about the scale of the increases in the business levy and the consequent impact on quoted companies (particularly in terms of the potential for triple-charging and the effect on the overall cost of raising capital). We also query the basis for the proposals to replace income lost by dint of the removal of Government funding. Consequently, we request a wholesale review of the funding arrangements to create a level playing field for charging purposes.

May 2008

Response to HM Treasury review of sunset clauses under the market abuse regime London Stock Exchange Group has responded to HM Treasury review of sunset clauses relating to superequivalent provisions under the UK civil market abuse regime.

We support the proposal to retain the current UK superequivalent provisions for a further limited period, pending the EU review of the Directive. It would seem unnecessary and disruptive to change the regime now, only to potentially have to change it again in a couple of years’ time.

April 2008

Response to CESR consultation on the equivalence of Canadian and South Korean GAAP London Stock Exchange Group has responded to CESR’s consultation on the equivalence of Canadian and South Korean GAAP.

We are supportive of the conclusions reached by CESR and the resultant advice that the Commission should accept both Canadian and South Korean GAAP.

Response to the Financial Reporting Council's levy proposals for 2008/9  London Stock Exchange Group has responded to the Financial Reporting Council's consultation regarding their levy proposals for 2008/9. In our response, we support the work of the Council, but raise concerns regarding the level, scope and apportionment of the business levy. However, we also acknowledge that the Council intends to consult more widely on their core funding requirements during 2008 and we signal our intention to contribute to that debate.

Response to FSA’s Discussion Paper on the Structure of the Listing Regime London Stock Exchange Group has responded to the FSA’s Discussion Paper 08/1 “A Review of the Structure of the Listing Regime”.

We support the FSA’s desire to ensure clearer labelling and to improve the general understanding amongst market participants of the terminology used to describe the listing regime. However, we believe that Option 1 of the FSA's proposals is a disproportionate response that may adversely affect existing and prospective issuers and investors and damage the UK’s competitive position. Under Option 2, the tiered structure of the Main Market would be retained and unintended adverse consequences for issuers and investors would thus be avoided.

March 2008

Response to FSA’s Consultation on the implementation of the Statutory Audit Directive (SAD) and the Company Reporting Directive (CRD) in the UK London Stock Exchange Group has responded to FSA’s consultation on the implementation of the Statutory Audit Directive (SAD) and the Company Reporting Directive (CRD) in the UK.

We support the majority of the FSA proposals regarding the implementation of the requirements on audit committees and corporate governance statements.

Response to the Financial Reporting Council's consultation on amending the Combined Code London Stock Exchange Group has responded to the Financial Reporting Council's consultation on potential revisions to the Combined Code. In our response, we welcome the Council's intention to focus on improving the practical application of the Combined Code and support the proposed amendments to allow an individual to chair more than one FTSE 100 company board and to also allow a Chairman to sit on the audit committee.

February 2008

Response to FSA's Consultation on amending Chapter 18 of the Listing Rules for investment entities London Stock Exchange Group has responded to the FSA's Consultation Paper CP08/1 in which they propose amending the Listing Rules where investment entities are considering listing depositary receipts.

Response to FSA’s Consultation on Disclosure of Contracts for Difference.  London Stock Exchange Group has responded to FSA’s consultation on a possible disclosure regime for Contracts for Difference. We agree that some form of action needs to be taken. However, we believe that additional work needs to be undertaken before conclusions on the design of such a regime can be reached.

Response to CESR’s Consultation on the equivalence of Chinese, Japanese and US GAAP. London Stock Exchange Group has responded to CESR’s consultation on the equivalence of Chinese, Japanese and US GAAP. We are very supportive of the approach that CESR sets out in this consultation paper and we were encouraged by the similar support voiced at the recent open hearing on this subject.