LONDON, July 5 (Reuters) – Britain’s financial watchdog on Monday offered to facilitate the listing of tech companies in London to boost the capital’s ability to compete with New York and the European Union after Brexit.
The Financial Conduct Authority (FCA) has proposed to allow dual class share structures for “innovative companies, often run by founders” during the first five years of a listing on the premium segment of the London Stock Exchange. .
Dual-class share structures allow company founders to retain control at the expense of common shareholders and are popular in New York and Amsterdam, the EU’s premier share trading center.
They are already available in London on the standard segment, but shareholder rights groups who support “one share, one vote” are opposed to their introduction in the premium segment in London where the best companies are listed.
“We have therefore made it clear in our proposal that we will not allow artificial means to extend the period by 5 years,” FCA said.
The FCA also proposed reducing the number of shares that must be made available to the public or float to 10% instead of 25%.
The minimum market cap, however, for the premium and standard segments for ordinary trading companies would be raised to £ 50million ($ 69million) from £ 700,000.
Cutting the float while increasing the minimum cap would bring London in line with trading in New York and elsewhere.
Global capital raised through IPOs rose 42% last year from 2019, with much of the increase coming from the United States and China, while the share of the Great – Britain in global IPOs has fallen rapidly in recent years, the FCA said.
“Today, we are acting confidently to meet the needs of a changing market,” said Clare Cole, FCA’s director of market surveillance.
“Our proposals should result in a wider range of UK listings and more choice for investors while continuing to ensure appropriate levels of investor protection.”
The LSE said the proposals were crucial to ensuring Britain remains one of the world’s major financial centers.
The proposals stem from a government-backed review of listing rules by former EU Commissioner Jonathan Hill, who said it was good to see momentum build to improve London’s attractiveness as a venue. quotation.
A public consultation on the proposals will end in September, with final rules expected before the end of 2021.
The FCA is also due to announce final rules to facilitate the listing of SPACs or special purpose acquisition companies to catch up with a wave of listings in New York and Amsterdam.
($ 1 = 0.7227 pounds)
Reporting by Huw Jones; Editing by Kirsten Donovan
Our standards: Thomson Reuters Trust Principles.