The Financial Conduct Authority has introduced reforms to encourage companies to list their shares in the UK after a number of high-profile companies decided to list overseas instead.
New rules from the Financial Conduct Authority (FCA) aim to make it easier and easier to encourage more companies to list in the UK and compete on the global stage.
The changes include proposals to protect investors by moving to a system based on financial information, which the regulator says will provide investors with enough information to “decide what they want to invest in.”
Disclosure is currently required by certain rules, and this move will create additional risks for investors associated with an initial public offering (IPO).
The company confirmed it plans to combine a “premium” listing on the London Stock Exchange, which has stricter rules, with a less onerous standard “commercial” corporate listing.
The FCA acknowledges that the changes “could create more opportunities”. [company] Setbacks, but the proposed changes better reflect the risk appetite the economy needs to achieve growth.”
The number of listed companies in the UK has fallen by around 40 percent since its peak in 2008. Between 2015 and 2020, the UK accounted for just 5 percent of new companies entering the global market.
The UK’s reputation as an international financial center has been damaged by a number of large companies choosing to list elsewhere, such as New York, or abandoning an existing listing in London.
The company suffered a major setback when Cambridge-based ARM plc, dubbed the “crown jewel of the UK tech industry” because it develops technologies used in electronic devices around the world, decided to go public despite provocation from both Prime Minister Rishi Sunak , and the former prime minister. Boris Johnson made a decision in New York.
Tui, Europe’s largest tour operator, said earlier this month it was considering a move to Frankfurt, while Ireland-based packaging group Smurfit Kappa and building materials group CRH are moving to New York. Gaming company Flutter is also preparing an IPO in the US.
Financial regulators face increasing pressure from governments to encourage and stimulate economic growth. Critics worry that pressure on regulators could lead to investors paying a high price.
Bim Afolami, Chancellor of the Exchequer, said: “The UK is Europe’s most important investment hub, but it is a competitive world and we are certainly not complacent. We want to make the UK a global capital, attracting the world’s brightest and best companies.”
“We are strengthening the UK as a listing country and introducing reforms to speed up country listings, improve disclosure and make our capital markets more efficient and open.”
UK Finance, the banking industry body, said the changes would strike the right balance between managing risk and driving growth, which would go a long way in attracting more listings.
Source: I News
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