Government set to unveil fresh capital markets reform to boost the City
The government is set to back a number of further reforms to the City’s capital markets to ease the way that listed firms can raise cash and allow greater participation from retail investors.
The UK Secondary Capital Raising Review, launched by ministers last year and headed up by Freshfields lawyer Mark Austin, is designed to free up the City post-Brexit and make capital raising more efficient for companies already listed on UK markets.
Ministers are now poised to announce the new measures next week, the Financial Times reported, and will push through a swathe of measures including making it quicker and cheaper for companies to raise money on the stock market.
Measures such as rights issues and equity raising are due to be included in the plans, according to a draft seen by the paper, with other recommendations including greater involvement of retail investors, and digitised shareholding so firms can better engage with individual investors.
“The proposals mean that companies will be able to raise money in a matter of weeks rather than months,” a source close to the plans told the paper.
Austin’s review looks to build on a major review of London’s listing regime last year led by Lord Jonathan Hill which looked to boost the appeal of London’s markets and included recommendations such as dual-class share structures, which allows founders to retain greater control over their firms after floatation.
New chancellor Nadhim Zahawi is set to unveil the measures in a speech to the City at Mansion House next week, originally due to be delivered by Rishi Sunak prior to his resignation, the FT reported.
Fears have been growing in the City that plans to slash EU-era regulation and push through business reform could be blown off course by the political turmoil shaking the Tory party.
The boss of the London Chambers of Commerce Richard Burge told City PM that “now more than ever” the City needed stability to “move forward after the disruption caused by the pandemic, the Russian invasion of Ukraine and post-Brexit uncertainty”.
“It is imperative we see a new leadership which is committed to delivering economic growth and nurturing an environment in which businesses can prosper,” he said.
Starling Bank boss Anne Boden told City PM on Monday she would be “sorry if current circumstances led to a roadblock on some key and much-needed legislation and reforms.”
A HM Treasury spokesperson said: “The Government asked Mark Austin to look at how to improve the ways in which UK-listed companies can raise capital more efficiently and effectively.
“We are looking forward to seeing his report and will respond in due course. “