The FSA is planning to reform the listing rules...

The FSA is planning to reform the listing rules in an effort to clear up confusion regarding directors' and officers' (D&O) potential conflicts of interest.

The FSA may also decide to limit the number of directorships an executive director can hold.

The reforms will seek to clarify possible conflicts of interest faced by directors who sit on the boards of more than one company.

Insurance litigator Francis Kean of Barlow Lyde & Gilbert said: "The FSA has outlined reforms of the listing rules to provide guidance on conflicts and, possibly, on limiting the number of directorships that a director can hold in other companies."

It is understood that the FSA is aiming to consult on the proposals this summer with revised listing rules being published by the end of 2004.

Kean said: "The difficulty lies in establishing when there is a conflict in the first place. At what point do the interests of the two companies diverge? Until then, care needs to be exercised by the individuals concerned and perhaps on their behalf by risk managers."