City minister pledges regulatory shake-up for the Square Mile in maiden speech
The new City minister, Bim Afolami, took aim at cumbersome regulation in the Square Mile today as he laid out plans for a wave of rules reform in his maiden speech.
Speaking at a CityUK event in Manchester, the economic secretary to the Treasury said red tape in the City was currently acting as a “disincentive” for firms to float in London and ministers would be accelerating efforts to cut back regulation.
Slimming down the prospectus requirements for companies looking to list would be near the top of the agenda, Afolami said, after the government announced legislation to reform the regime earlier this year.
He added that the current prospectus requirements are “double the complexity, take much longer, [and] take up much more time”.
“That’s a disincentive for people to list and disincentive to remain listed. Jonathan Hill did this work and we are very, very keen to put this forward and implement it and we’re going to do that as soon as possible.”
In a government-commissioned review of the listing regime in 2020, Lord Jonathan Hill laid out a number of reforms for the UK’s listing rules including introducing dual class share structures and slimming down investment prospectuses.
Ministers have also introduced a secondary growth and competitiveness objective for City regulators to try and boost the appeal of the Square Mile.
Afolami added that he will now be looking to ensure watchdogs “deliver on their objectives” and make sure they “deliver” and “play their proper role in facilitating [growth and competitiveness]”.
Hill’s was one of a slew of reports commissioned by the government over the past four years to reform regulation in financial services. Other deepdives include the Kalifa review of fintech, investment research review, and Austin review of the secondary markets.
However, some City figures have grown disillusioned with progress made. A source told City PM in September that “report fatigue” had set in around the capital due to the quantity of reviews since 2020.
A major report looking to draw up a “new market model” to tie the reviews together has also been delayed until next year.
Afolami’s speech marked his first as City minister after taking the role in the reshuffle last week.
His appointment was broadly welcomed by City figures, with UK Finance boss David Postings describing him as holding “significant expertise in the issues that matter”.
Educated at Oxford and Eton, Afolami worked at Freshfield Bruckhaus Derringer as before moving to HSBC as an executive within its restructuring and strategy team.