Meanwhile, the new FCA-endorsed weakening standards may lead to bigger shareholder losses and scandals. The UK is also making unforced errors: the Conservative government’s messy exit from the European Union means the volumes of shares traded in London is falling, hurting liquidity.
markets assign higher values to fast-growing technology companies, while regional bourses in the Middle East or Asia are growing. There are wider reasons why UK stocks trade at a discount to U.S.
Yet IPO red tape is far from the only stumbling block. Those tweaks are designed to keep up with laxer financial centres, like New York. Transactions between listed companies and related parties, or even large deals, need not be approved by shareholders. Many protections from the premium category will fall away: companies will be able to award directors shares with higher voting rights for up to 10 years. That’s why the FCA is proposing to replace a fiddly two-tier system of standard and “premium” listing rules with a single class. Tighter stock market rules may indeed be one reason why. Not only is London failing to attract high-profile IPOs, like chip designer Arm, but it is losing existing business: companies like building materials group CRH (CRH.L) are decamping to New York. Britain is even losing ground in Europe: in 2021, it made up just over a quarter of regional listings by value, according to Breakingviews calculations using PwC data, compared with over half 10 years earlier. The UK prides itself on being a financial hub, but accounted for just 5% of global IPOs between 20. The Financial Conduct Authority isn’t the only watchdog to water down its listing rules, but it has more reasons than most to up its game. Yet making London appealing to fast-growing foreign firms requires wider reforms, and lower standards are only a good idea if investors punish bad governance. Britain’s financial watchdog wants to spur domestic IPO markets by weakening shareholder protections. LONDON, May 3 (Reuters Breakingviews) - The UK is trying to do something about its dwindling listings.
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