Britain will finalise its biggest shake-up of company listing rules in decades over the coming weeks, regulators said on Monday (May 20), as industry officials cautioned that the reform alone won’t transform London’s ability to catch up with New York.
The Financial Conduct Authority’s executive director Sarah Pritchard said the listings changes would help boost UK growth and competitiveness.
The changes are expected to include merging the more heavily regulated premium segment with the less onerously regulated standard segment, in a bid to cut red tape.
Investors would rely on more disclosures from companies rather than on mandatory requirements that they be consulted.
“But as we know that these reforms will involve a different balance of risk, we have sought to engage extensively across the market, including with investors, to build as much consensus as possible before we reach our final decisions by the summer,” Pritchard told a City & Financial conference.
Britain has set out a welter of regulatory changes to bolster London post-Brexit as a global financial centre, but so far this year it has lagged New York and Europe overall in initial public offerings (IPOs).
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“Per se, I don’t think the listing rules change or transform the attraction of London as a listing venue,” said Charlie Lytle, chairman of corporate broking at Goldman Sachs bank, adding that it would remove some longstanding regulatory hurdles.
It was also unclear if the anticipated sale of the government’s remaining shares in NatWest bank to retail investors would “light a fuse or just be a one off” boost, Lytle added.
“A series of IPOs would be very helpful,” Lytle said.
Gavin Lewis, managing director and head of UK Institutional client business at asset manager BlackRock, said the lack of listings could be a symptom of Britain’s “relative decline” after falling productivity over a number of years.
Darko Hajdukovic, head of new and private markets at London Stock Exchange Group, said Britain needs to be more agile as rival financial centres like Singapore and Europe reform their own rules.
“We just need to make sure that we don’t think ‘OK, we have done that, job done, let’s forget about it’. It’s a constant process that needs to be evolving and needs to be quicker,” Hajdukovic said. REUTERS
