Herman Hauser, one of the founders of British microchip giant Arm, said the company had been snubbed by Britain for its bumper listing in part because for Brexit Credit: Chris Williamson/Getty Images
Mark Austin, partner at law firm Freshfields and chairman of the FCA's independent listing advisory panel, said: and much more, based on disclosures – much more like the US system. We must understand that capital markets are risky and we need to bring back the rebellious mindset or we will become a regional mid-tier market.”
On Wednesday, the FCA will start consultations on proposed reforms that also include: abolishing compulsory voting shareholders for major and related party transactions; abolishing eligibility rules that require a three-year financial track record as a condition for listing; and relaxation of rules regarding dual class sharing structures.
The reforms are directly aimed at encouraging fast-growing companies to list on the LSE, which has become a convenient home for banks, mining companies and oil companies, but is in dire need of fast-growing technology companies that have taken other international exchanges to new heights. /p>
This comes after the FCA was given a secondary challenge to promote global competitiveness as part of the government's Big Bang 2.0 Square Mile program.
This is part of an initiative to Chancellor Jeremy Hunt to use the newfound freedoms of Brexit to make the UK's financial services sector more attractive.
Ahead of the consultation, Nikhil Rati, chief executive of the FCA, said: “Access to a potentially wider range of listings companies will provide more opportunities for investors in the UK markets and help create jobs and growth.”
“But we must recognize that these changes we are proposing to the listing regime will mean transferring more investment risk to investors and making shareholders more accountable for holding companies they own accountable.”
“Despite While we believe there is a strong and urgent case for changes to refocus UK registered markets, we want and encourage further opinion and evidence on the benefits and costs these proposals may have or any alternative approaches.”
Last year, the FCA submitted a discussion paper proposing to abolish the current premium and standard regimes in order to attract tech companies to the UK, but with additional 'mandatory' and 'additional' obligations that public companies would have to fulfill.
However, the new consultation ruled out proposed “mandatory” and “optional” commitments after respondents in a discussion paper complained that the regime would remain complex and inflexible.
Andrew Grifft, city minister, said at the consultation was “an important step forward by the FCA in enhancing the international competitiveness of the UK as a listing destination.”
He added: “We are the largest financial center outside the US, but we recognize that companies and investors have a choice, and it is important that our set of rules keep pace with practices in other countries, while at the same time benefiting from the high reputation of our markets.”
The proposal to drop the premium segment of the listing is likely to trigger disputes among a group of shareholders who had previously warned against easing London stock market rules.
On Tuesday, Herman Hauser, co-founder of the British microchip giant, said the company had been snubbed by Britain because of its unfavorable listing in part – for the damage caused to the London market by leaving the EU. He said the “idiocy of Brexit” was to blame for the London stock market's contraction.
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