UK Regulator Sets Out Latest Plans to Encourage IPOs in London

William Shaw and Caroline Hepker, Bloomberg News

Stock price information displayed in the London Stock Exchange Group Plc's office atrium in the City of London, UK, on Tuesday, Aug. 1, 2023. LSE will report their first-half results on Thursday, Aug. 3. Photographer: Chris Ratcliffe/Bloomberg , Bloomberg

(Bloomberg) -- The UK’s finance regulator set out its latest plans to simplify its listings regime and revive interest in London’s stock markets.

The Financial Conduct Authority confirmed on Tuesday it will replace the standard and premium listings rules with one set of “streamlined eligibility and ongoing requirements,” in keeping with proposals announced in May.

The watchdog also stuck to its plan to let companies carry out more activities without putting them to a shareholder vote. The requirement to vote on related-party transactions was cited as one of the reasons behind Arm Holdings Plc’s decision not to list in London earlier this year.

“We hear a number of comments around issues that make the UK potentially less attractive for companies,” Sarah Pritchard, the FCA’s executive director, markets and international, told Bloomberg Radio on Wednesday. She added that the FCA had an important role but others needed to play their part. “There is a broader public debate around investor familiarity with certain sectors, around peer location, around skills, workforce and tax.”

Only a handful of companies have listed shares in London this year, despite several attempts to shake up the market and encourage more fundraising. Cambridge-based technology company Arm chose New York for its return to the stock market, after owner SoftBank Group Corp. spurned calls from the UK government for a dual listing.

The FCA offered Arm “certain modifications” to its listing rules as part of attempts to bring the firm back to the London market, the regulator’s chief executive officer Nikhil Rathi said in March.

Earlier on Tuesday, SoftBank founder Masayoshi Son and Arm boss Rene Haas were pictured at Downing Street, although — even with the rule changes — few expect the company to reconsider a secondary listing in London any time soon.

Spokespeople for SoftBank and Arm declined to comment.

Miles Celic, chief executive officer of lobby group TheCityUK, welcomed the FCA’s latest proposal. “A more accessible, effective and competitive listing regime will help to enhance the UK’s attractiveness as a prime listing destination, and spur economic growth,” he said in a statement.

--With assistance from Mark Bergen, Ian King and Katherine Griffiths.

(Updates with interview with FCA’s Sarah Pritchard in fourth paragraph.)