The Financial Conduct Authority (FCA) is poised to give the green light to a major set of reforms to the City’s listings regime, according to reports.
The FCA’s board will reportedly meet on 27 June, when regulators will decide on whether to approve the final version of the reform package.
The City watchdog is not expected to make any public announcement during the election campaign, but some expect the rules to be unveiled in mid-July. The rules would come into force two weeks after a public announcement, the Financial Times reported.
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Plans to merge the standard and premium segments of the market are expected to be confirmed as well as scrapping a requirement for firms to get shareholder approval for major deals.
Listings reform was pushed into the spotlight after Cambridge chipmaker Arm snubbed the London Stock Exchange to float across the pond last year.
Proposals were revealed last May with the FCA admitting that the listings regime was seen as “onerous” and “too complicated,” deterring some firms looking to come to the market. The regulator argued new rules would make the regime “more accessible, effective, and competitive.”
Speaking at the Investment Association’s conference last week, Rathi said the rules were “potentially very far-reaching”.
“We do need to accept that there is a risk of more things going wrong . . . acceptance that with risk comes great opportunity but also potential for failure . . . is important,” he said.
The rules would form part of a wider effort to reinvigorate the City’s capital markets after a couple of morale-sapping years for the bourse, which has seen a dearth of IPOs and a string of foreign takeovers.
Alongside tight rules, the market has been rocked by an exodus of cash as investors yank funds from the UK-focused equity funds in favour of the US. The government has looked to boost the flow of cash into the market with measures like the British ISA and encouraging more pension cash into UK companies.
The FCA was contacted for comment.