Exclusive: Treasury urged to call emergency meeting to solve London’s listings crisis
The Treasury is facing calls to convene an emergency meeting of top City institutions to try and stem the flood of firms away from London’s public markets, City A.M. can reveal.
In a letter to City minister Bim Afolami seen by City A.M., the Chartered Governance Institute, which represents some 10,000 governance professionals in the UK, said the London Stock Exchange was in danger of losing “critical mass” in key sectors in the next 12 months without fast action.
“We urge you to convene a meeting of key institutions urgently, so that this problem can be analysed, a clear government position can be identified, and an action plan be agreed,” the CGI’s chief Sara Drake wrote in the letter that was sent on Friday.
Any meeting should include participants from an “array of interested parties” including investment, taxation, governance and regulation, as well as representatives of listed firms, she warned the Treasury.
“Without immediate action, we believe risk to the relevance of the London market will continue,” Drake added.
The calls come at the beginning of a crunch year for the capital as City analysts warn a wave of firms could be plucked from the London Stock Exchange by private companies.
A total of 40 firms were taken over by private equity outfits and corporates last year in deals individually worth more than £100m, while a slew of firms including chipmaker Arm snubbed London in favour of New York.
Treasury ministers have commissioned a number of reviews and overhauled the rule book around UK financial services over the past three years to try and boost the appeal of London as a place to float.
Since the publication of the Hill review of the listings regime in 2020, the government commissioned deep dives into the competitiveness of areas spanning fintech, investment research and the secondary capital markets.
Just before Christmas the FCA confirmed it would push ahead with plans to streamline the listing rules, including merging the standard and premium segments of the market.
However, the CGI said in its letter to the minister that it was “time for the debates over the future of the London Stock Exchange to translate into action”.
Afolami, who was appointed to the role of City minister in November, told City A.M. that boosting the appeal of London as a place to list was his top priority in the year ahead.
“The UK is Europe’s leading hub for investment, but we are by no means are we complacent – it’s a competitive world and we want to make the UK the global capital for capital, attracting the brightest and best companies in the world,” he said.
“We are strengthening the UK as a listing’s destination, taking forward reforms to make it quicker to list, improve disclosure and make our capital markets more efficient and open.”