On Wednesday, Britain’s Financial Conduct Authority proposed its latest set of changes, which it will consult on over the next two months. These aim to simplify the structure of the stockmarket
fca
to put those bullet points into action. Rules on dual-class shares, which grant directors extra voting rights and are popular with startup founders, have been relaxed. Early investors can now hang on to more of their shares when a firm lists, rather than having to sell. Prospectus requirements are becoming less onerous and the process for raising follow-on capital more streamlined.proposed its latest set of changes, which it will consult on over the next two months.
Firms in the premium segment ought to benefit by comparison. But in recent years only the standard segment has grown, suggesting that issuers do not value a premium listing enough to make up for the extra regulation it entails. Nor do investors: in general, premium-listed firms see no valuation benefit compared with rivals following laxer rules abroad.
In other words, the new reforms would be a step in the right direction, just like the other measures taken by theover the past two years. Unfortunately—and again like all the other recent rule changes—it would be a small step. To see why, consider how far Britain’s stockmarket has deteriorated even as its administrators and regulators have rushed to shore it up. In 2022 just 1% of the capital raised through global initial-public offerings was raised in London.
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