Watchdog races to change listing rules in bid to lure more innovative tech companies to City
The City regulator is racing to change listing rules to lure innovative tech companies into joining the London Stock Exchange.
The Financial Conduct Authority (FCA) has proposed a series of reforms that include slashing the amount of shares that need to be in public hands, amid fears that London is losing home-grown talent to New York.
It has launched a 10-week consultation and wants to introduce the reforms by the end of the year.
Tech floats: The Financial Conduct Authority has proposed a series of reforms to the listing rules amid fears that London is losing home-grown talent to New York
Although London has netted high-profile floats such as Deliveroo and Darktrace this year, the proposed shake-up comes as artificial intelligence start-up Onfido said it was preparing to snub London for New York and Immunocore, a British biotech firm, listed in the US in February.
The FCA has suggested allowing firms that have a premium listing on the LSE – such as BP, Tesco and Barclays – to have ‘dual class’ share structures for the first time.
This would give bosses and founders far more power over the company’s future when it is public, as it means some shares would have more voting rights than ordinary stock.
It could upset the City old guard, however, with many preferring one share-one vote.
The FCA has also proposed changing requirements that say a company must be worth at least £700,000 when it floats.
Under the proposals, companies would need to be worth at least £50million, in a bid to make the main market a place for more established companies only.
Smaller, high-growth firms would need to join exchanges such as AIM and challenger bourse Aquis.