London Stock Exchange pours cold water on merging listing segments

By Huw Jones

LONDON (Reuters) – Compressing Britain’s two company listing segments to attract more tech firms could put an existing “gamechanger” at risk, a top London Stock Exchange official said on Thursday.

Britain wants to use its post-Brexit flexibility in financial rulemaking to compete better with New York in company listings, and is trying to persuade chip designer Arm to list in London rather than on Wall Street.

The Financial Conduct Authority (FCA) has already eased some listing rules and has proposed going further by merging the standard and more demanding premium listing categories.

“The standard listing is the only equity listing market that is growing currently and therefore it is clearly meeting the needs of a number of companies, which we think of as gamechanging,” Julia Hoggett, chief executive of the London Stock Exchange in the UK, told a City & Financial event.

The existing standard listing regime has struck the right balance in providing flexibility to some of the largest tech companies while protecting investors, Hoggett said.

Clare Cole, FCA director for market oversight, said that having a single segment would cut costs and make it easier for investors to compare companies.

Hoggett said bold action, not incrementalism, was needed to improve London’s attraction for private and public companies.

“Are we genuinely creating the best possible environment where great companies can start here? Arguably no,” Hoggett said.

Tom Duggan, deputy director for securities markets at Britain’s finance ministry, agreed that more needed to be done, adding that the government would create simpler prospectuses for companies to list.

But a favourable tax regime and ability to hire talent from across the world were also key to attracting listings to London, said Conor Lawlor, managing director for capital markets at UK Finance, a banking industry body.

“This appetite for change is finite, it won’t be around forever and we need to strike while the iron is hot,” Lawlor said.

(Reporting by Huw Jones; Editing by Bernadette Baum)