As FCA rewrites listing rules, another firm ditches London due to ‘regulatory burden’
A London-listing and the associated tangle of regulatory red tape inflict more pain on firms than benefits, an AIM-listed renewables firm said today, as it announced plans to ditch its quoted status in the City.
Solgenics, an African renewables development firm listed on London’s smaller AIM market, said today it had decided to delist due to the “regulatory burden” placed on the company and its belief that reporting requirements were allowing privately owned peers to gain a competitive edge.
“The considerable cost, management time and legal and regulatory burden associated with maintaining the company’s admission to trading on AIM are disproportionate to the benefits to the company,” Solgenics said in a statement.
“There are negative operational influences on the business, which come about directly as a result of being quoted, something which is accentuated by operating in an industry where the vast majority of the company’s peers are privately owned,” it added.
Shares in the firm cratered after the announcement, dropping some 70 per cent in early trading.
While Solgenics is at the small end of London’s listed firms with a market capitalisation of £3.26m before market open, the comments underscore the troubles facing the London Stock Exchange as it looks to tempt growing firms to come to market.
The City earned just five new listings in the first quarter of 2023 raising just £81m, while a slew of firms have announced plans to ditch their listings or snubbed London for an IPO, including the Cambridge chipmaker Arm.
Regulators in the UK have just announced sweeping plans to slash red tape and try and boost the appeal of London’s markets.
In an announcement yesterday, the Financial Conduct Authority acknowledged that the UK’s listing regime was seen by some as too complicated and tabled plans to merge the ‘standard’ and ‘premium’ listing segments with a single category.
The watchdog argued the reforms would create “a simpler and more accessible UK listing regime for companies, improving the attractiveness of listing in the UK and providing a wider range of investment opportunities for investors.”