Britain’s financial watch dog on Monday proposed making it simpler for tech companies to list in London to reinforce the capital’s capacity to rival New York and the European Union following Brexit.
The Financial Conduct Authority (FCA) has proposed permitting dual class share structures for “innovative, often founder led companies” for the initial five years of a listing on the London Stock Exchange’s premium platform.
Dual class share structures permit company founders to retain control to the detriment of ordinary investors and are famous in New York and Amsterdam, the EU’s top share trading centre.
They are now accessible in London on the standard segment, yet investor rights groups who back “one share, one vote” go against their introduction on London’s premium segment where top companies list.
“We have thusly clarified in our suggestion that we won’t permit counterfeit methods for extending the 5 year time frame,” the FCA said.
The FCA additionally proposed cutting the number of shares that should be made accessible to the general population or free-buoy to 10% from 25%.
The base market capitalization, in any case, for both the premium and standard sections for normal business organizations would be raised to 50 million pounds ($69 million) from 700,000 pounds.
Cutting the free-float while raising least capitalization would place London in accordance with trades in New York and somewhere else.
Capital raised globally through flotation grew 42% last year from 2019, with a significant part of the expansion coming from the US and China while a lot of global Initial public offerings has been falling quickly as of late, the FCA said.
“Today, we are acting decisively to address the issues of a developing commercial center,” said Clare Cole, the FCA’s director of market oversight.
“Our proposition should bring about a more extensive scope of listing in the UK, and expanded choice for investors while we keep on guaranteeing fitting degrees of investor protection.”
The LSE said the proposition were urgent to ensuring that Britain remains one of the world’s leading financial centres.
The recommendations come from a government backed review of listing rules by former European commissioner Jonathan Hill, who said it was great to see momentum building to further develop London’s allure as a spot to list.
A public conference on the proposition will close in September, with conclusive principles due before the end of 2021.
The FCA is additionally due to declare final guidelines for facilitating listing of SPACs or special purpose acquisition vehicles to find a whirlwind of listings in New York and Amsterdam.
