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The UK financial watchdog will announce plans to change the rules on bringing companies into public ownership after a series of high profile businesses snubbed the London Stock Exchange.
The Financial Conduct Authority (FCA) will on Wednesday publish proposed changes to rules on listing companies on the London Stock Exchange.
It hopes to make regulation more effective, easier to understand and more competitive after the number of companies listing in the UK has fallen by 40% since 2008, according to The UK Listing Review, undertaken by Lord Hill.
The regulator says the current rules are “seen by some” as “too complicated and onerous”. Politicians and regulators hope that increased listing in the UK will help economic growth.
Despite three prime ministers lobbying for it to list in London, major Cambridge-based microchip designer Arm decided to have its initial public offering (IPO) of shares on the New York Stock Exchange. Its owners viewed floating in New York the best way to recoup their $32bn (£26.7bn) investment in the company.
Some in Arm’s parent company, Softbank, and the government, were critical of FCA and blamed “onerous” rules for the decision to go with New York.
The world’s biggest supplier of building materials, CRH, also announced in March it was moving its primary listing to New York.
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Concerns about companies exiting London for New York were reinforced when Paddy Power and Betfair owner, Flutter, announced it’s to pursue a secondary listing across the Atlantic.
The FCA’s proposed rules are designed to help founders retain control in their companies by enabling them to hold shares with more voting rights.
The changes in the consultation paper, if enacted, would remove the two classes of listings and create a single category….
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