The UK has overhauled its listing rules in a bid to attract more companies to go public in London. The new rules, which mark the biggest changes to the listings regime in decades, will come into effect on July 29th. They include allowing companies more flexibility on significant transactions and making it easier for them to have two classes of shares, a structure often favored by entrepreneurs and early-stage investors.
The changes come amid ongoing concerns about London's competitiveness as a financial center, particularly following Arm Holdings Plc's decision to list in the US and a sharp decline in the number of new listings in London. The FCA hopes that the revised rules will make the UK more appealing to innovative companies and boost the country's capital markets.
While the changes have been welcomed by some, others have raised concerns about potential risks for investors. The FCA acknowledges that the new rules may increase investor risk but believes that institutional investors have the ability to manage these risks effectively.
The overhaul is part of a broader effort to reinvigorate the UK's public markets, but the FCA acknowledges that more needs to be done to address other factors impacting London's attractiveness, such as the depth of liquidity in US markets and scrutiny over executive pay.
