London’s struggling IPO market needs streamlined regulations to lure start-ups, global issuers, says broker

Name: Liz Truss named Britain’s new Prime Minister and Conservative leader
Uploaded: 2022-09-12T10:38:17.000Z
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London should streamline its regulatory regime to attract more start-ups and foreign issuers, says Numis Corp

London has been struggling to retain its status as a premier destination for large, global companies ever since Brexit

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London has been struggling to retain its status as a premier destination for large, global companies ever since Brexit. Photo: AFP

Bloomberg

Published: 6:38pm, 12 Sep 2022

The UK should streamline its regulatory regime to attract more start-ups and foreign issuers to London’s beleaguered initial public offering market, according to broker Numis Corp.

The UK market watchdog is looking to scrap London’s two-tier market system in favour of a simplified single listing regime. This could pave the way for tech companies with unequal voting rights to be included in FTSE Russell indexes, which currently only accept stocks trading on the premium segment of the stock exchange.

“Encouraging home-grown start-ups to flourish and eventually choose London over other public markets for a listing requires a simpler and more flexible regulatory regime,” said James Taylor, Numis’s investment banking head. Simpler rules would also attract international issuers, he said.

Streamlining the listing categories is part of a wider push to bolster the City’s standing as a global financial centre post-Brexit, including easing the rules around blank-check offerings.

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Liz Truss named Britain’s new Prime Minister and Conservative leader

The reforms have yet to pay off and many promising British start-ups are bypassing London to list in other markets, mainly the US. IPO proceeds in the UK only tally US$1.6 billion in 2022, its worst showing since 2009 and trailing other European venues like Milan and Zurich, data compiled by Bloomberg show.