Britain eyes shake-up in listing rules to attract more company flotations
Adds more detail
By Huw Jones
LONDON, March 29 (Reuters) -Britain's financial watchdog said on Wednesday it will consult on streamlining its company listing rules to help London compete better with New York in company floats.
It said it would consult on replacing its twin-track standard and premium company listing regime with a single regime and set of requirements.
Britain made some changes to listing rules in 2021 to help attract tech company flotations as part of a wider set of reforms to keep London a globally competitive financial centre after being largely cut off from the European Union by Brexit.
The decision by UK chip designer Arm to only list in New York has added to calls for further changes, with the London Stock Exchange saying that "pace and precision" is needed in reforms.
"Rather than simply lamenting these decisions or insisting that a few regulatory levers would change the outcomes, it is important to recognise there has not until now been a fundamental discussion about the entire ecosystem," Financial Conduct Authority chief executive Nikhil Rathi said in a speech.
The watchdog will publish a blueprint for further reform of the listings regime, he said.
"We plan to propose replacing our current standard and premium listing segments for shares in commercial companies with a single listing category with one set of requirements,"Rathi said in a speech.
"We can see the value in allowing experienced investors the flexibility to form their own judgement in making investment decisions based on issuers’ disclosures and rely on their considerable negotiating power."
The watchdog will propose scrapping requiring companies to have a three-year financial track record as a condition of listing, a challenge for start ups, Rathi said.
A more permissive approach to dual class share structures - whereby founders can retain control of a company - would also be proposed.
Compulsory shareholder votes for large corporate transactions, and for related party transactions - seen as an issue for Arm's owner - would also be scrapped under the draft proposals, Rathi said.
But there was a need to be realistic about how much of an impact regulatory reform can achieve given many factors influence where a company lists, he said.
Reporting by Huw Jones, Editing by Louise Heavens and Christina Fincher
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.