LONDON (Reuters) - Britain's markets watchdog has so far been contacted by only one company interested in taking advantage of a rule it introduced to attract state-owned firms like Saudi Aramco IPO-ARMO.SE to London, the regulator told Reuters without naming the firm.

FILE PHOTO: The logo of Saudi Aramco is seen at Aramco headquarters in Dhahran, Saudi Arabia. Picture taken May 23, 2018. REUTERS/Ahmed Jadallah/File Photo

The Financial Conduct Authority (FCA) drew criticism from major institutional investors and British lawmakers when it outlined plans in July last year for a premium stock market category that would exempt businesses controlled by sovereigns from meeting certain requirements.

Aramco’s initial public offering (IPO), which could value the oil company at an estimated $2 trillion, would be the biggest ever if it goes ahead and financial centers including London and New York have been vying to host the international tranche of the share sale.

Some British lawmakers had questioned whether the FCA’s proposed listing changes were influenced by the British government with the aim of luring Aramco to list in London.

But the regulator rejected suggestions it had been swayed by politicians, with its chief executive, Andrew Bailey, telling lawmakers last October that the new policy “is not about one company.”

The new category was introduced at the start of last month after the FCA tweaked its plan to address some of the corporate governance concerns raised by investors.

Since the policy was first proposed in 2017, the FCA has been contacted by one company expressing preliminary interest in using the new listing category, the regulator told Reuters in response to a Freedom of Information (FOI) request.

The watchdog declined to say whether the company was Aramco. An FCA spokesman did not comment further. Aramco did not immediately respond to a request for comment.

Evan after making modifications earlier this year, the FCA still met resistance from some business groups, including the Institute of Directors (IoD), who were unhappy with the plan. In the new category, shareholders will not be required to give prior approval for related party transactions between the state-controlled company and sovereign.

Edwin Morgan, the IoD’s director of policy, said the FCA’s response to the FOI request suggested there might not be “massive demand” for the new listing category.

“It doesn’t mean potentially that others might not be interested but it doesn’t sound like there is such a demand for this that the economic gain would be so massive that it would justify the watering down of the rules,” he said.

CONTACT WITH ARAMCO

Bailey disclosed in a letter to parliament’s Treasury and Business Committees last year that the FCA had held talks with Aramco and its advisers and that the regulator had “emphasized during those conversations that we were reviewing the listing regime.”

He later told the Treasury Committee that he met with Aramco’s chief financial officer in January 2017 when asked by lawmakers about the discussions.

In response to a separate FOI request submitted by Reuters, the FCA disclosed that in total it had held eight meetings and calls with either Aramco or the oil company’s advisers last year, including the January meeting.

Two of the calls took place on the days before and after the FCA proposed its listing changes on July 13.

Aramco had originally planned to IPO by the end of 2018 in a share sale seen as the centerpiece of efforts by Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy beyond oil.

But that target has looked increasingly out of reach in recent months, with the country yet to announce a venue for an international float.

Last month, sources told Reuters that a separate deal that Aramco is pursuing to buy a stake in petrochemicals maker Saudi Basic Industries Corp 2010.SE from the Public Investment Fund, Saudi Arabia's top sovereign wealth fund, would enable the kingdom to delay the IPO until 2020 or later.

Britain’s FCA estimated in its original proposal for the listing change that the new category might not appeal to many businesses.

“Although the group of sovereign controlled commercial companies is not likely to be large numerically, their likely market value, for example arising from major privatization transactions, is large enough to justify creating a new regime category,” the FCA said in its July 2017 consultation paper.

Prince Mohammed predicted the listing would value Aramco as whole at $2 trillion or more when he first announced the plan to sell about 5 percent of the oil company in 2016.