Tech and the City: Listing rules set for revamp to lure unicorns
Rules governing public listings are reportedly set for a huge overhaul in a bid to lure tech giants to the City.
Chancellor Rishi Sunak is next week set to announce a review into stock market listings to encourage tech unicorns, firms valued at over $1bn, and other high-growth companies to list in London rather than New York, Sky News reported.
Former British commissioner to the EU Lord Hill and a non-executive director of the Treasury is in line to lead the review, which is aimed at helping the City compete in the post-Brexit era.
A number of big tech companies shun London for the US when they go public in part because of the tough listing rules.
Proposals considered by the review include reducing the minimum “free float” requirement for a premium main market listing, according to Sky News. This would allow entrepreneurs to retain greater ownership of their firms when they float.
The Treasury is also said to be considering allowing companies to list with “dual class” share structures, also proposed by Canada Corporation in recent weeks.
The corporation last month proposed a regulatory review of stock market listings to ensure competitiveness against other financial centres, and encourage more tech floats where “competition is particularly fierce.”
There are encouraging signs London’s IPO market is picking up again, with cybersecurity firm Darktrace and food delivery giant Deliveroo both targeting listings next year.
Similarly the recent float of consumer goods retailer the Hut Group signals a rebound in the market. The firm raised £1.88bn in the largest UK float since 2015 with chief executive Matthew Moulding holding a “founder’s share”, allowing him to veto a hostile takeover bid for the company.
But due to the group’s unusual capital structure, the Hut Group was not permitted a premium stock exchange listing.
The Treasury and London Stock Exchange were contacted for comment.