Stock market rules torn up to woo science stars of future

THE City watchdog is attempting to lure science and technology darlings to list in London with a major relaxation of its stock market rules.

The Financial Conduct Authority (FCA) has proposed to scrap the current premium and standard listings regime and replace it with a “single segment” system that could encourage fastgrowing companies to float on the London Stock Exchange.

In a discussion paper, the regulator said many bioscience and technology companies are currently locked out of London’s premium listing segment as they are unable to meet the financial eligibility criteria, such as providing a three-year track record of revenue growth and audited financial records.

It added: “This can mean these companies list on other markets with different ways of assessing companies’ financial positions on admission, often making it more difficult for UK investors to access these companies.”

At present, only companies with a premium listing are eligible to be included in the FTSE indexes, meaning that scrapping the current regime would mark one of the most significant overhauls of London’s stock market rules since the 1980s.

The FCA said: “Although many elements of the premium listing regime are valued by investors for promoting good corporate governance and shareholder engagement, some of the requirements lack the flexibility required by high growth and/or innovative companies to accommodate different and evolving valuation methods as well as different business structures.”

It comes amid fears that London is continuing to fall behind rival financial hubs in attracting new listings.

The Japanese owners of Britain’s biggest tech company, Arm, are preparing to float the $60bn (£48bn) semiconductor giant in New York. In the first three months of the year, only 12 companies listed on London’s main market, raising just £308m. Shanghai hosted 37 listings in the same period, raising $18.3bn.