A new category has been approved for the companies listed on the London stock Exchange, which will allow the oil giant Saudi Aramco to the list of actions in London.
London has been accused of watering down rules of corporate governance in order to respond to the huge list.
The Institute of Directors said that the movement has put the “united KINGDOM of world-wide reputation as a leader in the field of good governance” at-risk.
London is competing with New York for the state oil firm’s list, which is expected to be the largest in the world.
The proposed share flotation will see 5% of the state-owned company sold in an Initial Public Offering.
Aramco has yet to confirm when, or if, in fact, it will float the shares, with reports that he could leave aside the waterline in favour of private share sales.Deeply disappointed’
London’s listing rules would generally require at least 25% of a company’s shares to be exchanged, but the new category might allow a smaller float for the sovereign in the controlled companies, the FCA said.
The City watchdog said there was “a considerable advantage for the investor” from the rule change.
“These rules mean that when a sovereign-controlled company lists here, investors can benefit from the protection offered by a premium ad,” said Financial Conduct Authority chief executive Andrew Bailey.
However, the Institute of Directors has said it was “deeply disappointed”, calling it a “reduction in standards”.
Mohammed bin Salman, Saudi Arabia, the crown Prince, proposed a Aramco, the sale of shares in the framework of its programme of economic reform.
A sale is a part of the wider plans to help the country ease its dependence on oil exports.
Companies will be able to apply for admission to the new category on the London Stock Exchange from 1 July 2018.