“If the proposals in this consultation document are implemented, it will be bad news for London and will reverse the progress we have made in recent years to uphold strong governance and protect minority shareholders,” he said.In Royal London’s view, the listing rules should apply for any premium listing, whether the controlling investor was a private individual, a consortium or a sovereign state, Hamilton Claxton said.The FCA explained in yesterday’s announcement that it had decided to bring this proposal forward from its ongoing “Review of the Effectiveness of Primary Markets”.Andrew Bailey, the regulator’s chief executive, said: “Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature.”Regulatory protections for investors lay at the core of the listing regime, he said, but added it was important that those protections remained well-targeted. “Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate,” he said.The authority said the new premium listing category would include all of the investor protection that applied to firms in the existing premium listing category, but with two changes.Firstly, the sovereign would not be considered a related party in the related party rules, and secondly, the controlling shareholder rules would not apply to companies in the new category in respect of the sovereign controlling shareholder.Shareholder lobby group ShareAction warned of the danger of diluting existing protection.“Our initial reaction is that investors and savers should be nervous about any dilution of existing protections which were specifically introduced to avoid a repetition of the governance issues associated with Bumi and ENRC,” said Catherine Howarth, the organisation’s chief executive.Apart from giving feedback to the FCA’s new proposal for listing of state-owned entities, ShareAction would also push for the major index providers to carefully consider how to respond, she said.“The FTSE 100 includes a range of multinational businesses who meet high governance standards – there is no reason why this should be diluted by technical changes in the premium listing with potential implications for passive investors,” Howarth said. The announcement by the UK’s financial regulator that it is proposing to introduce a new “premium listing” category for sovereign controlled companies — which effectively relaxes the rules around some IPOs — has been criticised for eroding shareholder protection.The Financial Conduct Authority (FCA) said yesterday that it had launched a consultation on proposals to create a new category within its premium listing regime to cater for companies controlled by a shareholder that was a sovereign country.The move is seen by many in the market as catering for an IPO by Saudia Aramco, Saudi Arabia’s state-owned oil company. The Gulf country is looking to sell 5% of the company, with New York and London reportedly left in the running as venues for the listing. Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, said: “It looks like the FCA is consulting on amending the existing listing rules to accommodate the peculiarities of one company, which is not a very effective strategy for regulating the market as a whole.