Britain's financial regulator proposed stricter rules on reverse takeovers and on companies with key roles in offshore jurisdictions, as part of a broader drive to improve corporate governance practices.
The use of reverse takeovers to give fast-track London Stock Exchange listings to emerging market-based companies has been criticised for posing corporate governance risks.
The Financial Services Authority (FSA) said on Thursday that it hoped the new rules, which it outlined in a consultation paper, would help clamp down on such practices.
The proposed changes will ensure that reverse takeovers cannot be used as a 'back-door' route to listing for companies that would otherwise be ineligible. There are currently exemptions that remove some acquisitions from the reverse takeover requirements. These proposed changes will narrow these exemptions, the FSA said in a statement.
(Reporting by Sudip Kar-Gupta; Editing by Myles Neligan)