By Chris Vellacott and Kylie MacLellan
LONDON, July 11 (Reuters) - An investor group whose membersmanage assets equivalent to a quarter of the value of the UKeconomy has called for listing rules to be changed to betterprotect minority shareholders.
The Association of British Insurers (ABI), whose membersmanage nearly $3 trillion of assets, said on Thursday it wantedcompanies listing on the London Stock Exchange to makemore information available more quickly to all investors.
It also wants tougher rules on how majority stakeholdersconduct and disclose their business with their companies.
Robert Hingley, ABI director of investment, said its report,based on a survey of investors and bankers, had met a"sympathetic" response among regulators and in government.
However, some in the industry thought it added little toprevious debate, or were sceptical whether much would change.
"All of these things would be good but I'm not totallyconvinced how achievable they are," said Julian Chillingworth,chief investment officer at investment manager Rathbones.
"Will the members of the ABI back them up by saying theywon't apply for an issue if they don't think it's being handledin the right fashion or it's a minority stake being placed?"
The UK Listings Authority (UKLA) ran a consultation onpotential changes to listing rules late last year and is stillin discussions with those in the market on how they can beimproved. It plans to report back over the summer and was notimmediately available for comment on the ABI's views.
Investigations into alleged irregularities atKazakhstan-focused miner ENRC, listed in London in2007, and Indonesia-orientated Bumi, listed in 2011,have put a spotlight on listing rules.
Both were hit by shareholder battles that have batteredtheir shares, raising questions about how they came to market.
BALANCING INTERESTS
The ABI report was commissioned after a government-backedreview compiled by economist John Kay in July 2012 questionedthe effectiveness of Britain's equity capital markets.
Many of the ABI's suggestions, such as fewer banks runningeach deal and greater transparency on fees, echo those made byU.S.-based fund manager BlackRock in 2011 after a run oftroubled deals strained relationships in the market.
Little has changed in the way sales are run since then, yetnew listings in London have picked up significantly this year,buoyed by rising stock markets.
The ABI proposed that sale prospectuses should be publishedearlier in the month-long process, giving investors more time toprepare for meetings with company management and for independentanalysts not connected with the sale to compile their ownresearch.
"That is bold, that is interesting. That is a concreteimprovement," said one senior equity capital markets banker, whowas otherwise unimpressed by the ABI's report.
"The rest is very woolly," he added.
Bankers have argued the UK's rule that companies must floatat least 25 percent of their shares when joining the market hasencouraged some companies to head to the United States, wherethere is no such requirement.
The ABI stood by that rule, saying a minimum 25 percentfree-float would ease investor concerns about liquidity andgovernance. It also said that if placing greater obligations onmajority shareholders discourages company owners unwilling totake on more liabilities from listing in London it would be "agood outcome for the quality of companies that list here".
But others cautioned against putting the UK stock market ata competitive disadvantage.
"It's good to be having the debate," said James Campbell,Partner at law firm Pillsbury.
"But in the long term you have to balance the interests ...We don't want to ruin the market for ourselves by creatingbarriers to entry that are higher than other markets."
