The Financial Services Authority, the City regulator, is to consider tightening its rules governing overseas listings in the wake of harsh criticisms about the corporate governance practices endemic at some foreign firms.

The move by the regulator comes a day after John Thain, the head of the newly merged NYSE Euronext exchange, implicitly criticised Russian companies listed on the London Stock Exchange.

Critics have argued that, in its desire to internationalise its market, the LSE has marketed listings to overseas companies, some of which have failed to make the grade in corporate governance terms.

Mr Thain told Financial News Online that “a number of Russian companies raise serious questions” on issues of corporate governance, financial transparency and the rights of minority shareholders.

Twenty-two Russian companies are listed on London’s main market, with a combined capitalisation of $437 billion (£221 billion).

The FSA said that it would launch an industry consultation about the wider implications of the different listing rules that apply to the various tiers of the main UK market. Depending on the response, it could eventually introduce a single regime.

The FSA noted that maintaining London as a competitive market was a priority, but said that it had faced calls to unify the listing regime while consulting on the regime in place for investment funds.

Hector Sants, the FSA’s managing director of wholesale markets, introduced a unified listing regime for investment funds yesterday but indicated no preference over any wider changes. An FSA spokesman said that the idea was to explore the wider implications of having different listing rules in place.

The LSE said that it welcomed the FSA’s move and noted that the UKLA was responsible for listings.

Peter Montagnon, the director of investment affairs at the Association of British Insurers (ABI), said: “We have been talking to them for some time precisely about the need for more understanding. The starting point is the need to keep a careful watch between the desire to attract new business to a centre like London and maintaining the quality of the franchise.”

Mr Montagnon said that clarity was central: “It’s not appropriate for somebody whose GDRs are traded here to insinuate they have met the standards necessary for a full listing. That could impact on the reputation generally for London. We don’t want to undermine choice, but we want clarity within those choices. What we don’t want to do is to clamp down on London’s ability to attract new business.”

The Financial Services Consumer Panel, which advises the FSA, expressed concern that, over the next ten to twelve months, overseas investment companies will be able to list in London with lighter obligations than UK-based companies using the so-called Chapter 15 regime.

John Howard, chairman of the panel, said: “We await the detailed proposals to ensure that the overall protection for UK investors is not diluted.”

Last month, Roel Campos, a commissioner at the Securities and Exchange Commission, compared the LSE’s junior market AIM to a “casino”.

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