* Review recommends double shares, lower free float
* Listing rules for SPACs should be liberalized
* Protected high governance standards, Sunak says
* Annual report on the state of the city to Parliament
* Basic review of the prospectuses
By Huw Jones
LONDON, Feb. 6 / PRNewswire / – The UK will “modernize” its listing rules to attract high-growth and “blank check” spots from SPAC companies to London, Treasury Secretary Rishi Sunak said Tuesday.
The London Stock Exchange has faced tougher competition from NYSE and Nasdaq in New York and Euronext in Amsterdam since the UK left the European Union entirely on December 31st.
In order to keep London globally competitive after Brexit, Sunak commissioned a review of the listing rules last November. It was chaired by former European Commissioner Jonathan Hill and will publish its recommendations on Wednesday.
“The review has more than proven itself and I am very keen that we address the recommendations quickly and cement the UK’s reputation at the forefront of global financial services,” Sunak said in a statement.
The government is under pressure to act – it announced a quick fintech work visa last week – after many euro and swap deals left London for Amsterdam and New York following full Brexit in December.
However, asset managers and company executives warn against undermining corporate governance standards by simplifying listing rules.
“The recommendations in this report are not about bridging the gap between us and other global centers by suggesting radical new exits for a competitive advantage,” said Hill.
“The point is to fill a gap that has already opened. All recommendations are consistent with existing practices in other well-regulated financial centers in the US, Asia and Europe,” added Hill.
Two changes aim to bring London in line with New York and other financial centers by allowing founders to list their business while staying in control.
The story goes on
Hill recommends giving directors and founders more voting rights in certain decisions, which, according to individual investor groups, runs counter to the “one share, one vote” principle. The minimum “free float” or minimum amount of shares in a company or in public hands would be reduced from 25% to 15%.
Hill also recommends liberalizing the listing rules for special purpose vehicles, or SPACs, whose New York IPOs have skyrocketed over the past year, with Amsterdam also picking up some lately.
Hill recommended that the prospectus used by companies to represent their initial or second offering of shares should also be thoroughly reviewed.
There should also be an annual State of the City report from the Minister of Finance to Parliament on the competitive position of the financial sector.
“The advancement of the UK listing regime is the key to flexibility for companies that want to list in London while maintaining high standards of corporate governance,” said David Schwimmer, CEO of the LSE Group. (Reporting by Huw Jones; Editing by David Evans)