The head of the London Stock Exchange accused pension funds of hypocrisy

London Stock Exchange CEO Julia Hoggett said pension funds are resisting changes that have already been made in other countries they invest in. Photo: Holly Adams/Bloomberg

The head of the London Stock Exchange (LSE) has accused pension funds of hypocrisy for resisting deregulation of the Square Mile market.

Julia Hoggett, chief executive of the LSE, said some of the UK's largest pension schemes opposed reforms to the London Listing Rules despite having invested huge sums of cash in foreign exchanges with more lenient rules.

This comes after the heads of pension funds on Wednesday warned the Financial Conduct Authority (FCA) not to relax stock market rules, saying the proposed changes would deprive shareholders of protection and damage the UK's reputation.

Speaking at TheCityUK's annual conference on Thursday, Ms Hoggett said: 'The vast majority of those institutions that say 'we don't want change' are funneling more of their pension money into overseas registered companies that have exactly the rules they are trying to promote. FCA. than they do in British companies. So their real money doesn't matter.

“The proof of where the UK [pension] money went is that CIOs [CIOs] and CEOs decided to put their capital into these other markets without such protection… We place exceptional requirements on the companies listed here that are not set in other jurisdictions.”

The FCA is proposing to abolish the current premium and standard listing regime. The reforms also include: the abolition of mandatory shareholder votes for major and related-party transactions; abolishing eligibility rules that require a three-year financial track record as a condition for listing; and relaxing the rules on dual class sharing structures.

City Minister Andrew Griffith urged pension funds to take more risks with their investments. Credit: Chris Ratcliffe/Bloomberg

In an open letter to the FCA, Railpen and nine other major UK pension schemes said the reforms would «abolish fundamental investor protection». and expose participants to the pension scheme to more risk and higher costs.

Last month, Andrew Griffith, the city minister, urged pension funds to adopt a “risk-taking culture” amid fears that the reluctance of money in the stock market is holding back the economy .

Ms Hoggett said: «The reality is that we need to make sure we have a level playing field for companies so they can choose where they want to access capital.»

«Theoretically, it makes no sense to have an ideal market that no one uses. All the FCA rules [changes] are trying to do is create a level playing field with what's happening in Europe and the US.» Financial Services and Markets Bill receives Royal Assent.

In an article for The Telegraph, Mr Griffith said the passage of the bill marked «a defining moment for Brexit.»

He added. “For those who believe them, the Brexit dividend abounds, and this law delivers dividends that can give our economy a much-needed rocket boost. We can now tailor the rules for the UK's insurance sector, known as Solvency 2, which could potentially free up £100bn for productive investment, including clean energy projects and social housing.»