FCA Aims to Streamline Stock Listing Rules to Boost UK Growth

The two-tiered structure of London’s main stock market could be streamlined into a single entry point to encourage an easier path for fast-growth technology firms and startups to publicly list, as competition ramps up from the U.S. and the EU. 

Proposals from the U.K. Financial Conduct Authority (FCA) would do away with the current split between the main market’s higher premium tier and its lower standard tier, according to an FCA press release on Thursday (May 26).

“Instead, all listed companies would need to meet one set of criteria and could then choose to opt into a further set of obligations,” the FCA said. “Companies and their shareholders would decide for themselves whether these additional obligations were right for them.”

London continues to trail New York in bringing tech companies to the market and faces added competition from Amsterdam since Brexit. 

Critics of London’s two-tiered system have said it has led to a stigma around companies that have had to settle for standard listings. In turn, that’s deterred some founder-led startups from listing due to the desire for more flexibility over areas such as share classes, Financial Times reported.

See also: London Stock Exchange Aims to Attract Private Tech Firms With Special Listings 

“The rules for companies who want to list here have not changed since the 1980s. Now is a good time to have an open conversation to make sure our rules are fit for the future, so we have a more accessible, competitive and growing market that is attractive to a diverse range of companies,” said Clare Cole, director of market oversight at the FCA.

The proposals are the latest in a wider regulatory attempt to overhaul the U.K.’s listings rules to attract more companies to the country. 

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The FCA moved in 2021 to make the listing regime better by dropping free float levels, allowing certain forms of dual-class share structures and launching digital financial reporting.