Britain launches review to keep London listings competitive

November 19, 2020

By Huw Jones

LONDON (Reuters) – Britain’s finance ministry said on Thursday a former financial services commissioner for the European Union will review listing rules to make London more attractive for tech companies.

Jonathan Hill will look at free floats and dual class share structures, the finance ministry said, as Britain reviews its rules to ensure London can compete with New York and Asia as it loses unfettered access to the EU, its biggest customer.

Firms listed on the London Stock Exchange must currently have a minimum 25% of their shares available for trading, but some tech entrepreneurs are keen to maintain control of their companies and have a lower “free float”.

Dual class share structures, common in the United States but restricted for top listed UK companies, allow some shares more voting rights than others.

Shareholder groups oppose dual class shares, saying that “one share, one vote” ensures better standards of corporate governance and protects minority shareholders.

“More dynamic equity markets will enhance the UK’s position as a world-leading financial centre, and drive growth and innovation across the wider economy,” Britain’s finance minister Rishi Sunak said in a statement.

Hill’s review will make recommendations to the government and the Financial Conduct Authority early next year.

He will also look at requirements on companies drawing up a prospectus for investors, review existing rules for secondary listings, and rules that require companies to provide a “track record” of their financial performance.

(Reporting by Huw Jones; Editing by Alexander Smith)

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