City businesses will learn this week that the results of a long-awaited review of listing rules will not now be published in June this year as expected but be delayed for a further 18 months, Accountancy Age can reveal.
In an unexpected delay, the Financial Services Authority’s in-depth review, which includes an examination of the role of auditors, will not be completed before December 2004.
At a time when no successor to outgoing FSA chairman Sir Howard Davies has yet been named, a further delay will create uncertainty among company leaders already inundated with new compliance regulations from the City regulator.
A spokeswoman for the FSA said this week: ‘December 2004 is the final date, at this point, for the review to be completed.’
The main reason behind the hold-up is due to slippage of the European Commission’s own regulatory reform agenda. The EC has been working on a number of directives, particularly the prospectus directive, that will affect all EU capital markets.
The prospectus directive has come under massive criticism for its ‘one-size fits all’ approach that observers say would deprive growth markets of the lighter regulatory touch that is available in the UK.
Company directors and advisors are also concerned that the UK could lose its competitive edge.
The FSA said: ‘The reason, for the most part, is due to the EU directives.
It would be pointless to get new UK rules and then have to change them.’
The delay will undoubtedly also exasperate Ken Rushton, the Financial Services Authority’s head of listing rules, who over a year ago expressed frustration at Brussels bureaucracy for holding up his review. Rushton told Accountancy Age last February that he was feeling pressure in the UK to complete the work.
Patricia Peter, corporate governance specialist at the Institute of Directors, said she hoped the FSA would not use the delay as an excuse to do nothing.
‘Things that need to be addressed should be in the current framework.’