Britain Eyes Revised Listing Rules for London Stock Exchange

In an effort to help London keep pace with New York, Britain’s stock markets overseer said new listing regulations would debut this week, according to a Thursday (Dec. 2) report from Reuters. 

The updated rules, which were available for public review earlier this year, are aimed at bolstering London’s position as a global center for listing companies. 

If enacted, the rules would allow a company’s founder to keep an initial degree of control while providing for a form of dual class share structures in premium listings for five years.

Governments in Europe have been working for some time to make at-home initial public offerings (IPOs) more advantageous, specifically eyeing a series of tech-friendly rules, according to PYMNTS. 

The move to modify listing rules comes at a time when more European businesses are listing in the U.S.

Read more: European Businesses Rushing To List In The US 

Through August of this year, $9.5 billion had been raised by New York IPOs, which was the most generated for this period in more than 20 years, according to PYMNTS. The lure of U.S. IPOs stems from the high first-day returns and the willingness of Wall Street investors to pour large amounts of investments into new stocks.  

To turn the tide, Britain is working to enact the changes, which are expected to take effect on Dec. 3 for the London Stock Exchange and Aquis, according to Reuters.

Among the modifications, the company’s shares that can be publicly traded will drop from 25% to 10%, while the minimum market capitalization for the premium and standard listing would increase from 700,000 pounds ($930,692) to 30 million pounds ($39.8 million), which is considerably less than the 50 million pounds ($66.4 million) initially put forward, according to the report. 

Yet, even before the rule changes, London, in the first half of this year, saw its highest number of IPOs since 2014, according to PYMNTS.  

More here: London Exchange Reports Highest IPO Numbers In Years 

In addition, 100 U.K. tech firms reached a valuation of at least $1 billion, as compared to only seven companies reaching that milestone in 2020.