Amid intense competition for the anticipated listing of Saudi Aramco – the world’s largest oil company, owned by the Saudi state – stock exchanges and financial-market regulators are under pressure to provide incentives for the company to dual-list its shares abroad. The United Kingdom’s Financial Conduct Authority (FCA) seems to be bowing to that pressure.

Last month, the FCA issued a proposal to relax listing conditions for state-owned issuers wishing to qualify for the London Stock Exchange (LSE) Premium Listing Segment – the exchange’s “gold standard” segment, governed by stringent regulations. The proposal is presented as a mere technicality, but it is significant for reasons that extend beyond Saudi Aramco. In fact, it implies that regulators now believe that state-owned enterprises (SOEs) deserve special regulatory treatment.