Regulators in the United Kingdom (U.K.) have overhauled their listing rules in an effort to convince companies to hold initial public offerings (IPOs) on the London Stock Exchange.
The revised rules allow companies both foreign and domestic to carry out more activities without putting them to a shareholder vote. They also make it easier for companies to have a dual share structure that’s popular with entrepreneurs and founders.
Additionally, companies listed on the London Stock Exchange will have more flexibility on the timing and content of the disclosures they’re required to make, and institutional investors will be allowed to hold enhanced voting rights.
The changes implemented by the U.K. Financial Conduct Authority are aimed at convincing companies to list their shares on the London Stock Exchange.
Last year, a debate over the future of the U.K.’s main stock exchange flared up after British chipmaker Arm Holdings (ARM) chose to hold its IPO in New York rather than London.
There has been a sizable drop in the number of companies listing their stocks in London since the U.K. elected to leave the European Union in a process known as “Brexit.”
Many other public companies based in the U.K. have switched their listings to the U.S. in recent years, further raising concerns about the health of the nation’s capital markets.
London is trying to retain its reputation as one of the world’s top financial centres even as it contends with less liquid markets after Brexit.
The U.K. Financial Conduct Authority said the new rules represent the biggest overhaul of stock listing requirements in 30 years.
The new rules go into effect on July 29 of this year.
