UK Listing Reforms: seizing the opportunity for reform?
A look at Lord Hill's much-anticipated review of the UK listing regime.
On 3 March 2021, Lord Hill published his much-anticipated UK Listing Review setting out the results of his Call for Evidence for creating a positive vision for the future of financial services in the UK. The report is wide ranging and brimming with recommendations, but do they offer a package that will reinvigorate the UK’s equity capital markets?
It is not an easy question to answer at this stage – the proof of the pudding will be in the eating – but if all the recommendations were to be implemented, they would certainly tackle some of the regulatory hurdles that have encouraged the view that London can be a difficult place to list. However, as discussed in our article, they probably don’t go far enough for those who wanted to see a ripping up of the rule book, and it remains unclear whether the buy-side will be supportive of the proposed, albeit limited, paring back of some of the existing rules.
Lord Hill categorises his recommendations as:
- Monitoring and delivering results to ensure the focus of key stakeholders is on ensuring the attractiveness of the UK as a well-regulated global financial centre;
- Improving the environment for companies to go public by providing founders with the ability to preserve more control after IPO through dual class share structures and lowering free float requirements, making it more attractive for SPACs to list in London, and improving the market perception of the standard listing segment;
- Re-designing the prospectus regime to reduce disclosure requirements, particularly for companies already admitted to the Official List, and to promote dual listings by considering whether prospectuses approved in other jurisdictions can be used to meet UK requirements;
- Tailoring information to meet investor needs better by changing the liability regime for forward-looking information in a prospectus, and amending the historical financial information requirements for premium listed companies;
- Empowering retail investors and improving capital raising for existing listed issuers by embracing technological advances and using innovative structures for secondary issues to increase retail participation; and
- Improving the efficiency of the listing process by amending or repealing the requirement to include unconnected analysts in an IPO process.
As Lord Hill admits, some of the recommendations are highly technical, but the hope is that taken together they can make a practical difference to improving the UK listing process.
Please read the full article below.
