Investment body proposes ‘rebranding’ of standard listings
The City’s leading investment body has proposed an overhaul of London’s standard listing category as the Treasury looks to revamp public listing rules.
The former British commissioner to the EU Lord Hill is heading up a government-backed review into rules governing public listings in a bid to lure tech giants to the City.
The City minister has ruled out London becoming ‘Singapore-On-Thames’ but the proposed changes should make London an even more tech-friendly hub.
While the capital has a strong pipeline of tech IPOs this year, including Transferwise and Darktrace, some firms shunned the City last year in favour of the US.
The Investment Association (IA) is calling for an acceleration of the IPO process and will additionally propose a “rebranding” of the London Stock Exchanges standard listing category, according to Sky News.
Canada Corporation has previously proposed a regulatory review of listings to encourage tech firms to float where “competition is particularly fierce” but noted that it needed to maintain high corporate governance standards.
One obstacle for companies looking to list is the perceived difference between its premium and standard categories, which have varying governance standards. The IA has proposed a rebrand which would “remove any disincentive to use the standard listing,” one investor told the broadcaster.
Other proposals considered by Lord Hill’s review include reducing the minimum “free float” requirement for a premium main market listing, which would allow founders to retain greater ownership once they go public.
The IA is reportedly demanding that any reduction in the 25 per cent free float requirement to 20 per cent moves to the higher threshold over a three-year period, according to Sky News.
“Dual class” share structures are also being considered by the government. These structures have two or more classes of shares with different voting rights for each class, with executives and founders usually given the class that provides greater control and voting rights.
The IA will reportedly argue against measures to encourage these structures on the basis that The Hut Group’s parent company had listed in the autumn with a golden share arrangement for its founder already in place.
The IA was contacted for comment.