Norway’s Norges Bank Investment Management (NBIM) has warned that the Financial Conduct Authority’s (FCA) proposed reforms to UK listing rules could result in weaker investor protection.

In its response to the FCA’s consultation, NBIM, which manages the investments of the Norwegian Government Pension Fund Global, also raised concerns that the proposals could harm the UK’s reputation as a market with high corporate governance standards.

While it believed there was some scope for simplifying the requirements in listing rules or the corporate governance code, it stated that this should not come at the expense of weakening investor protection.

Furthermore, NBIM warned that the required monitoring was likely to result in increased costs and reduced efficiencies.

In its response, the investment manager also raised concerns about the FCA’s proposal to broaden the availability of dual class shares and to remove shareholder votes on both related party transactions and significant transactions.

“We believe that the ‘one share, one vote’ principle is the best regime to secure the fair treatment of all shareholders,” NBIM said.

“Voting rights should be aligned with cash flow rights to ensure that shareholders have the appropriate incentives when exercising their voting rights on fundamental decisions concerning the company.”

NBIM warned that the reforms could also have consequences for the FCA’s work on stewardship, noting that as the FCA is encouraging investors to play a greater role in company engagement, broadening the use of unequal voting rights could reduce their influence.

Several UK pension schemes have also recently raised concerns about the FCA's proposals.

“In respect to the FCA’s proposal to replace the existing premium and standard listing categories with a single category, we believe that it would diminish the flexibility of the current system, under which companies seeking to list can either elect the premium listing category and associated stricter requirements, or decide to list on the standard segment and benefit from the simpler regime,” NBIM added.

“If the FCA wished to test its assumption that the suggested reforms could incentivise companies to list in the UK, an alternative could be to create a third listing category where all the proposals could be tested without weakening the investor protection standards of the premium segment.”

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