City regulator calls for overhaul of London Stock Exchange float regime ‘stuck in 1984’

THE City regulator has demanded a post-brexit shake-up of the UK’S listing rules to lure more fast-growing businesses, arguing that the current regime is “stuck in 1984”.

Clare Cole, director of market over- sight at the Financial Conduct Authority (FCA), said that the UK’S listing regime was “designed when we still stored data on a floppy disk”. The rules have been “often slow and linked to European requirements”, she added, which meant there have been instances where the market has “missed the boat”.

Almost £24bn of new capital was raised on the London Stock Exchange in the first six months of 2020, but Ms Cole said the process was “unclear to users and in some cases perhaps prohibiting high-quality issuers listing here”.

Regulators are racing to overhaul Britain’s listing rules amid concerns that the London Stock Exchange is missing out on listing some of the highgrowth technology firms that have boosted bourses in New York and China.

As part of his “Big Bang 2.0” vision for the City, Rishi Sunak asked Lord Hill, the former EU commissioner, and the ex-worldpay boss, Ron Kalifa, to separately explore possible rule changes. The regulator will push some of the suggestions forward.

These include proposals that will give tech founders more power through so-called dual share structures, which allow them to retain control over their businesses after they have floated.

The aim is to stop digital banking companies such as Monzo and Revolut from floating in New York. Klarna, the buy now, pay later giant, is also weighing up its options over where to go public.

The FCA plans to introduce new rules by the end of this year so that “next year’s IPOS can already benefit from the initial round of changes”.

Dr Roger Barker, at the Institute of Directors, said: “Such reforms are justified by the extent to which London has fallen down the global league tables for IPOS in recent years. However, the baby must not be thrown out with the bathwater. The UK has an enviable reputation for high standards of corporate governance, and the UK Listing Rules form an important component of this.”