Britain grapples for agreement over listing rules overhaul

By Huw Jones

LONDON (Reuters) – The proposed sweeping reform of Britain’s company listing rules lacks consensus on how aggressive the new regime should be in persuading firms to list in London rather than New York, regulators said on Monday.

The decision by UK chip designer Arm Holdings to list in the United States triggered calls in Britain to make London more attractive as a listings destination by easing the rules.

The Financial Conduct Authority (FCA) has proposed combining its “premium” and “standard” listing categories, and ease other listing requirements such a requirement for a detailed financial track record, prompting sharp criticism from shareholder groups.

Sarah Pritchard, FCA executive director for markets, said on Monday that alone would not solve all the problems in Britain’s capital markets, and a range of views had emerged in response to its proposals.

“Consensus does not necessarily mean compromise – it means achieving the right outcome that balances our objectives, in a way that supports the UK’s international competitiveness and growth,” she told a City & Financial conference.

Such fundamental reform would need a different level of risk, which needed a public discussion, she said.

“And with that in mind we are doing this differently. To get this right, we need to work with industry so we are convening roundtables with external stakeholders with the aim of reaching agreement on the right balance to set,” she said.

The new rules would be confirmed before the end of this year, which the FCA would seek to implement speedily, Pritchard said.

Julia Hoggett, CEO of London Stock Exchange, said London was already an attractive listings venue, and “narratives” that keep it down needed challenging.

“There is no one big bang thing that transforms how capital markets operate,” Hoggett said, adding that the proposed changes largely bring London in line with rival centres.

At close of trading last Thursday, of the 23 UK companies that have listed in the United States over the past decade, six have delisted, 13 were trading lower than their initial offer price, with four trading up, including Arm at just 2% higher, Hoggett said.

(Reporting by Huw Jones; Editing by Alex Richardson)