LONDON/OSLO (Reuters) - Norway’s $1 trillion (£758.73 billion) sovereign wealth fund has urged Britain’s financial markets regulator to rethink proposed changes to its share listing rules to allow a new category of listing for state-backed firms which give smaller investors less say on corporate governance.

The world’s largest sovereign fund and one of the biggest investors in UK stocks joins the growing ranks of investors unhappy about the possible changes, seen aimed at attracting oil giant Saudi Aramco [IPO-ARMO.SE] to London for its proposed listing.

The concerns threaten to hinder the London Stock Exchange's LSE.L campaign to win a slice of Aramco's initial public offering, which could raise up to $100 billion, and forced British rulemakers to defend their plans.

In July the UK’s Financial Conduct Authority proposed creating a new category of ‘premium’ listings for state-backed firms, which would see them exempt from certain rules and limit the ability of minority investors to have any influence over the company.

Norges Bank Investment Management (NBIM), which manages assets on behalf of Norway’s fund, said the changes would give a controlling shareholder the freedom to take decisions that may not be in the interests of the company or other investors.

“Ultimately, investors expect today’s high standards of shareholder protection to apply to the premium listing category, whether controlled by a sovereign state or private investors,” the fund wrote in a letter to the FCA dated Oct. 13.

“We believe the FCA should consider a more balanced approach that takes into consideration the interests of all stakeholders in the listing environment.”

Among specific concerns were planned changes to the rules on related-party transactions and controlling shareholders, which would limit smaller shareholders’ ability to prevent the misuse of company assets and elect independent directors to the board.

“These rules were introduced to provide the necessary checks and balances to protect the interests of minority shareholders from potential abuse,” it wrote.

The fund said it has around 44 billion pounds invested in London-listed stocks.

It owns shares in most top British companies, with large stakes in Shell RDSa.L, HSBC HSBA.L and Prudential PRU.L, and holds 8.5 billion pounds in UK government bonds. It co-owns Regent Street, one of London's premier shopping areas. Britain was the fund's second-largest investment location after the United States at the end of 2016, accounting for 9.1 percent of its fund value.

Among others to formally respond to the FCA’s proposals, the Pensions and Lifetime Savings Association (PLSA), Britain’s leading pensions industry body, said last week it was concerned the changes could damage the UK market’s reputation.