London's IPO Hopefuls Say That Overhaul Of Listing Rules Is Not Enough

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CHIEF executives of some of the largest private financial technology firms are pushing for bolder reforms to the United Kingdom's listing rules, saying that an overhaul that was just announced doesn't go far enough to revive London share offerings.

Enhanced incentives for research, better policies to attract global talent, and a friendly tax regime that supports employee stock options are among measures that could help "solidify London's status as a premier listing hub", said Paul Taylor, CEO of banking software firm Thought Machine.

Others such as Jaidev Janardana, CEO of SoftBank-backed Zopa Bank, called for a wider range of investors.

Their comments came in response to new rules for initial public offerings (IPOs) unveiled by the UK's Financial Conduct Authority (FCA) on Jul 11 as part of a concerted effort to jump-start an equity capital market that's been moribund for years.

A recovery could be months out, with investors waiting for clarity on policies from the new Labour government under Prime Minister Keir Starmer.

The FCA's revised rules will allow businesses to carry out more activities without putting them to a shareholder vote. They also make it easier for companies to have two classes of shares, a structure that's often favoured by entrepreneurs or early-stage investors who want to have a significant role in businesses even after they have gone public.

Some of the fintechs and startups that have plans for a public float eventually are seeking more easing of the rules and a more favourable environment.

Rishi Khosla, CEO of OakNorth Bank – a lender to small and medium enterprises – said policymakers needed to take a look at factors driving the higher "price multiple" premiums in the United States, and adapt those to the UK.