The recommended reforms aim to make the UK’s listing regime more competitive while maintaining high standards of corporate governance, shareholder rights, and transparency.
A new independent review (the Review), led by Lord Hill, has been released that provides recommendations on how the UK can improve its listings regime. Published on 3 March 2021, the Review aims to impart recommendations that will improve the process of raising equity capital on the UK public markets, whilst also maintaining high standards of corporate governance, shareholder rights, and transparency.
According to the Review, the key recommendations are:
The UK Listing Review’s full recommendations and Lord Hill’s letter to the Chancellor are available on the UK government’s website.
The UK Listing Review provides a package of proposals that the authors of this blog post hope will enable London to compete more effectively as a world leading listing location.
SPACs are a very hot topic at the moment and Lord Hill’s report will only add to the enthusiasm. Many believe that London has fallen behind other international listing venues as an attractive option for SPACs. With regulatory impetus, the authors expect investors to look favourably again on the LSE as a supportive platform for launching a SPAC.
Dual class share listings are an attractive option for founders who want the benefits of a public listing without relinquishing as much control of their business, and are already an option in the US and Hong Kong. Similarly, reducing the free float requirements allows founders and other pre-IPO investors more room to retain their shares for longer.
The suggested changes to London’s listing rules strike the right balance — flexing to attract founder-led businesses and fast-growth companies to allow London to compete more effectively with other stock exchanges, while maintaining essential checks and protections for investors.