By Chris Vellacott
LONDON, July 11 (Reuters) - The Association of BritishInsurers (ABI) - whose members manage assets of nearly $3trillion, or about a quarter of the British economy - wantsrules for listing on the London Stock Exchange changedto protect minority shareholders.
The ABI wants companies to make more information availableto all investors earlier and to force existing majoritystakeholders to comply with tougher rules on governance, it saidin a report on Thursday.
"An information asymmetry exists in favour of issuers andvendors at the expense of investors," the ABI said.
"Additional responsibilities on controlling shareholders arelikely to be helpful in focusing their attention on thedisclosure and nature of their relationships with the companyand minority shareholders," it said.
Investigations into alleged irregularities at Kazakh-focusedENRC, listed in London in 2007, and Indonesia-orientated Bumi,listed in 2011, have put a spotlight on these issues. Both werehit by shareholder battles that have battered their shares,raising questions about how they came to market.
Robert Hingley, ABI director of investment, said the report,based on a survey of investors and bankers, had met a"sympathetic" response among regulators and in government.
It was commissioned after a government-backed reviewcompiled by economist John Kay in July 2012 questioned theeffectiveness of Britain's equity capital markets.
Even before the Kay Report, investors and regulators hadraised concerns about governance and transparency in the initialpublic offering (IPO) process.
Meanwhile, parliament's Committee for Business, Innovationand Skills has invited submissions on the role of mining firmsin the economy, examining corporate governance at companiesoperating abroad but trading on UK exchanges.
The association said that discouraging company ownersunwilling to take on more liabilities from listing in London is"a good outcome for the quality of companies that list here".
Publishing the sale prospectus earlier in the month-longprocess would give investors more time to prepare for meetingswith company management and for independent analysts notconnected with the sale to compile their own research, it said.
The ABI also called for fewer banks to be involved in IPOs,making the process of setting a sale price that reflected thevalue of the company more efficient. Only three banks should runsales worth more than 250 million pounds ($370 million) whilesmaller deals should be restricted to two institutions, it said.
The association also recommended greater transparency onfees paid for institutions running IPOs and issues of new sharesby listed companies.
The UK Listings Authority ran a consultation on potentialchanges to the listing rules late last year and is still indiscussions with those working in the market on how they can beimproved. It has said it plans to report back over the summer.
