Singapore Exchange logo

S68 - Singapore Exchange News Story

S$10.04 0.0  0.1%

Last Trade - 09/04/21

Sector
Financials
Size
Large Cap
Market Cap £5.84bn
Enterprise Value £5.61bn
Revenue £594.8m
Position in Universe 286th / 6085

UPDATE 1-Britain to ease listing rules to buttress London after Brexit

Wed 3rd March, 2021 8:05am
* Review recommends dual shares, lower free float
    * Listing rules for SPACs should be liberalised
    * High governance standards safeguarded, says Sunak
    * Annual "State of the City" report to parliament
    * Fundamental review of prospectuses
    * Regulators should have competitivenes objective

 (Adds detail, comment from Hill)
    By Huw Jones
    LONDON, March 2 (Reuters) - Britain will modernise its
listing rules to attract more high-growth and "blank cheque"
SPAC company flotations to London, Finance Minister Rishi Sunak
said after a government-backed review said the capital was on
the back foot after Brexit.
    The London Stock Exchange is facing tougher competition from
NYSE and Nasdaq in New York, and from Euronext in Amsterdam
since Britain fully left the European Union on Dec. 31.
    In a bid to keep London globally competitive after Brexit,
Sunak commissioned a review of listings rules last November. It
was led by former European Commissioner Jonathan Hill and
published its recommendations on Wednesday.
    "The review has more than delivered and I'm keen we move
quickly to consult on its recommendations, cementing the UK's
reputation at the front of global financial services," Sunak
said in a statement.
    The Financial Conduct Authority will consult publicly on the
proposed changes, though some would require legislation to
implement.
    The government faces pressure to act - it announced a
fast-track work visa scheme last week for fintechs - after
swathes of euro stock and swaps trading left London for
Amsterdam and New York after full Brexit in December.
    But asset managers and company directors warn about eroding
corporate governance standards by easing listing rules.
    Hill said "the composition of the FTSE index makes clear
another challenge: the most significant companies listed in
London are either financial or more representative of the 'old
economy' than the companies of the future.
    He added that there was a sense that the financial sector is
on the "back foot" due to Brexit and new competition emerging
from Amsterdam.
    "The recommendations in this report are not about opening a
gap between us and other global centres by proposing radical new
departures to try to seize a competitive advantage," Hill said.
    "They are about closing a gap which has already opened up.
All the recommendations are consistent with existing practices
in other well-regulated financial centres in the USA, Asia and
Europe," Hill added.
    
    'STATE OF THE CITY'
    Two changes seek to move London in line with New York and
other financial centres by allowing founders to list their
company while still retaining significant control.
    Hill recommends allowing dual class share structures to give
directors and founders enhanced voting rights on certain
decisions for five years, a move retail investor groups say is
contrary to the "one share, one vote" principle. The minimum
"free float" or amount of a company's shares or in public hands
would be cut from 25% to 15%.
    Hill also recommends liberalising listing rules for special
purpose acquisition companies or SPACs, whose flotations in New
York have surged over the past year, with Amsterdam also
attracting some recently.
    The prospectus, used by companies to set out their initial
or secondary offer of shares, should also be fundamentally
reviewed to make listing a company faster and simpler, Hill has
recommended.
    Hill said regulators in Australia, Singapore, Hong Kong,
Japan and the EU have an objective to maintain competitiveness
of their financial sector and this would be helpful for
Britain's Finanancial Conduct Authority as well.
    There should also be an annual "State of the City" report
form the finance minister to parliament on the financial
sector's competitive position.
    "Continuing to evolve the UK listings regime is key to
providing flexibility for companies who want to list in London
while maintaining high standards of corporate governance," said
David Schwimmer, chief executive of the LSE Group  LSEG.L .

 (Reporting by Huw Jones; editing by David Evans and Louise
Heavens)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))
© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.