Stock market rules to be overhauled to lure tech giants

Rules governing stock market listings are set to be overhauled in an effort to help London compete with international rivals in the post-Brexit era.

Rishi Sunak, the chancellor, is preparing to announce a review of the listings regime to try to encourage technology giants and other high-growth companies to float in London rather than New York and elsewhere, Sky News reported.

Lord Hill, former British commissioner to the EU and a non-executive director of the Treasury, is in line to lead the review, which could be announced next week, following lengthy consideration in Downing Street.

It comes weeks after the City of London Corporation, the governing body of the Square Mile, called for a review of listing structures to “ensure the UK’s competitiveness relative to other listing locations,” as part of measures to help London thrive amid the pandemic and other global trends. 

“The goal should be to motivate equity listings in London, including within the tech sector where competition is particularly fierce, while maintaining high corporate governance standards,” it added.

Proposals likely to be considered by the review, Sky News reported, include reducing the minimum number of shares that must be sold publicly as part of a premium listing, and allowing dual-class share structures. Both are potentially controversial moves, raising questions over governance and control.

The British cybersecurity company Darktrace is among large tech firms that are targeting London listings, reportedly lining up a float next year valued at a possible £3.8bn.

However, other UK start-ups such as FarFetch, the online fashion retailer, have picked the US, and London has generally lagged behind. The listings regime is not the only attraction; tech companies say they also find it easier to sell themselves to US investors.

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