Cable’s power grab threat to share listings

LONDON’S competitiveness as an attractive company listing destination is in danger of being jeopardised by political gesturing between business secretary Vince Cable and the Treasury, one of the UK’s most senior investment bankers has warned.

Sir Laurie Magnus, who was yesterday appointed chairman of Lexicon Partners, said plans to separate the regulation of primary and secondary capital raising markets would make London “far more difficult to sell” to firms looking to list in the capital.

“The problem is partly that the coalition doesn’t fully understand what it is doing and the
consequences,” Magnus said. “It seems there’s a political turf war afoot between Vince
Cable and the Treasury.”

He added: “We’re sleepwalking towards making life much more difficult for ourselves. I
just hope they wake up and realise that.”

Magnus, a member of the UK Listing Authority Advisory Committee spoke out in support of the London Stock Exchange chief executive Xavier Rolet. Rolet has warned that the rules would “severely” impact London’s competitiveness and urged other concerned City practitioners to speak out against them.

The government’s proposals would see regulation of primary listings pass to a strengthened Financial Reporting Council (FRC), which would be overseen by Cable’s department, while secondary capital raisings would fall under the jurisdiction of the new Consumer Protection and Markets Authority (CPMA).

The City is also concerned that the CPMA has the UK’s only vote on Europe’s new super-regulator, the European Securities and Markets Authority (ESMA).“If this goes ahead, the UK’s voice in Europe will be hamstrung,” Magnus said.

The government’s consultation process is due to conclude on 18 October.