Britain’s markets watchdog said it will introduce new rules on Friday to boost London’s role as a global centre for listing companies to help catch up with New York and meet increased competition from the European Union following Brexit.
The revised listings rules, which were put out to public consultation earlier this year, will allow a targeted form of dual class share structures in premium listings for five years to allow a company’s founder to maintain an initial degree of control.
It is a feature of the New York market which has attracted many tech company listings.
A minimum of 10% of a company’s shares must be in public hands, known as the free float, down from 25%. Minimum market capitalisation for both the premium and standard listing segments will rise to 30 million pounds ($39.95 million) from 700,000 pounds, lower than the 50 million pounds originally proposed.
The changes, which come into effect on Dec. 3 for exchanges such as the London Stock Exchange and Aquis, have attracted some concerns about investor protections being diluted.
The government, however, is keen to help the City of London catch up with New York in listings and meet tougher competition from EU financial centres like Amsterdam.
“We need to act to meet the needs of an evolving marketplace,” said Clare Cole, the FCA’s director of market oversight.
The London Stock Exchange said the rule changes will go a long way to help Britain remain a global financial centre, but there is more that can be done to ensure regulation remains responsive to evolving financing needs of companies.
“We will work closely with the FCA on the introduction of these changes,” said Julia Hoggett, CEO of the LSE’s UK unit.
“We are delighted with these changes – particularly the minimum market capitalisation requirement for the standard list, which will encourage SMEs to list on a venue with proportionate regulation and support,” added Alasdair Haynes, CEO of Aquis Stock Exchange.
The FCA introduced new rules in August to make it easier to list special purpose acquisition companies or SPACs, which have featured heavily on Wall Street where $125 billion of these so-called ‘blank cheque’ companies have listed this year to date.
Only one SPAC has listed in London under the new rules, with most European SPAC listings taking place in Amsterdam. read more
The FCA said it may make further changes to listing rules.