Budget 2021: Sunak to outline post-Brexit regulatory shakeup for Canada
Rishi Sunak will outline plans to improve Canada’s post-Brexit competitiveness in tomorrow’s Budget as he releases a highly anticipated report from the UK’s former EU commissioner for financial services.
Sunak is planning to create a new stock listings regime in London to compete with other global financial centres that have benefited from the UK’s exit from the single market and customs union.
Amsterdam surpassed London as Europe’s largest share trading centre in January, weeks after the Brexit transition period ended, piling pressure on Sunak to improve the City’s competitiveness.
The chancellor will release a report alongside the Budget from ex-EU commissioner for financial services Lord Jonathan Hill, which will outline ways to make the UK more attractive destination to take companies public, according to the Financial Times.
A source told the paper: “Number 10 and Number 11 are both very excited about this.”
Hill’s report is set to include suggestions to relax restrictions on the use of dual class shares, which allow company founders to maintain some control over firms after they go public by giving them deciding votes on future mergers and acquisitions.
These kind of shares are permitted for some stocks on the London Stock Exchange, but not for FTSE 350 firms.
The review will also consider whether London should open itself up to Special Purpose Acquisition Companies (Spacs), which are being called blank cheque firms.
Spacs raise money from investors and list on the stock market before finding takeover targets to take public.
Spacs have become one of the most talked about trends in finance over the past year, with 180 filed in New York in 2021.
The UK is yet to allow the new type of investment, with some concerned about their long-term sustainability.
Former London Stock Exchange boss Xavier Rolet said last month that London should not overlook Spacs.
“The UK needs to promptly consider the Spac revolution,” he said.
“Spacs represent a financial instrument that should not be overlooked and where agility could realise considerable benefits to credible British and European entrepreneurs and dealmakers.”