UK finance watchdog looks to relax rules to boost London listings
The City watchdog is proposing to relax London’s stock market rules in an attempt to attract more fast-growing startups instead of losing out to other financial centres such as New York, Paris and Frankfurt.
The Financial Conduct Authority’s (FCA) proposals would mean scrapping the current two-tier system, where firms decide whether to follow looser rules of a so-called standard listing, or the more rigorous standards of a premium listing.
Instead, all companies would need to meet one set of rules, in order to simplify what some industry bodies have said is the UK’s “complex” and costly listing regime.
Firms would then be given the choice to opt-in to stricter rules – including greater control by shareholders – that are required if companies want their shares listed on the FTSE main markets, including the blue-chip FTSE 100.
The FCA said the changes would help “attract more high quality, growth companies” to the London Stock Exchange.
The UK is hoping to build on last year’s stock market boom, which saw companies raise £16.9bn on the London Stock Exchange. That was the strongest year for stock market fundraising since 2007.
However, the boom followed years of decline, with the number of companies listing in London having dropped by nearly 40% since the financial crisis. Between 2015 and 2020, the UK only attracted 5% of the world’s initial public offerings (IPOs).
“The rules for companies who want to list here have not changed since the 1980s,” said Clare Cole, director of market oversight at the FCA. “Now is a good time to have an open conversation to make sure our rules are fit for the future, so we have a more accessible, competitive and growing market that is attractive to a diverse range of companies.”
The proposals follow
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