The UK Treasury has recently been reviewing the UK Listing rules. The Coronavirus pandemic and Brexit helped to fuel a sell-off in London listed stocks in the twelve months to January 2021. The FTSE 100, for example, fell more than 14% last year, making it the worst performing of the large international stock indices. However, the London market was arguably already in need of an overhaul. UK equity markets have been shrinking faster than other European exchanges, with the number of listed companies here falling by 20% since 2012.
What should be done? Suggestions include accepting that dual-class share structures might help to attract young technology companies as has been the case in the US. Some have suggested that dual-class structures should be extended to premium listings. Should start-ups owned by their founder or a small group of investors have to sell at least 25% of their company in a listing? How much flexibility should be introduced into new regulations? Departure from the EU means that Britain now has more freedom to set its own rules. But will this result in a renaissance for the London market or a race to the bottom and a listings regime reminiscent of the Wild West?
Click here to read what UKSA and ShareSoc said to the Treasury in their joint response to the consultation.
