The Financial Conduct Authority’s (FCA) proposed changes to the Listing Rules have now come into force.
The UK regulator intends to make it easier and more attractive for innovative, founder-led companies such as Twitter, Facebook or Amazon, to come to market sooner than they might at present.
It is believed that the previous Listing Rules gave other exchanges like Euronext, Hong Kong and especially New York, a competitive advantage over the London Stock Exchange (LSE).
One of the big changes is the introduction of a targeted form of “dual class” shares in the Premium Segment. This will allow founders to retain more voting rights than other shareholders. In addition the free float requirements have been relaxed considerably from 25% to 10%. There is also a higher Minimum Market Capitalisation (MMC) threshold for entry to the Standard and Premium Segment (£30 million vs. the previous £700,000).
At JTC we focus on providing high quality governance and administration support to LSE listed entities.
“We welcome any measures that remove barriers and help high quality companies to go through IPO on the LSE. We are very pleased to see that the FCA’s reforms, when coupled with the higher MMC threshold, encourage high quality businesses to consider entry onto the globally respected LSE as an excellent strategy for growth, whilst supporting investor confidence about the types of companies that are coming to IPO.”
“At the same time we recognise that some earlier stage businesses might be very strong in their field of expertise and have robust fundamentals but, because they are relatively young companies, they may also lack the in-house resource to ensure sufficiently strong corporate governance to enable them to transition to being a public company. JTC is in an excellent position to provide the corporate governance, company secretarial and administration support these businesses require and we look forward to working with any company that might be considering this journey.”