Watchdogs must roll out “simpler and more flexible” regulation in order to reinvigorate London’s barren initial public offering market, the investment banking chief of broker Numis said today.
The Financial Conduct Authority is exploring a simplification of London’s two-tier market structure to try and boost the appeal of London as a destination to float. Officials are also looking to roll out and implement a host of recommendations following a major review of London’s listing regime last year, conducted by Lord Jonathan Hill.
In an interview with Bloomberg, James Taylor, the investment banking head of Numis, said the changes needed to be pushed through in order to tempt more tech firms to market in the capital.
“Encouraging homegrown startups to flourish and eventually choose London over other public markets for a listing requires a simpler and more flexible regulatory regime,” he said, adding that simpler rules would attract international issuers.
Ministers and London Stock Exchange officials have been on an offensive in the past 18 months to try and boost the standing of London as a hub for tech IPOs, with two major reviews of the London’s capital markets designed to ease the way that firms can raise cash.
But the efforts have stalled amid a slump in global IPOs as soaring inflation and war in Ukraine rock markets globally.
In the first half of this year, just 26 issuers raised £595m compared to 47 issuers raising £9.4bn in the same period in 2021.
“Despite this year’s quieter IPO markets, London still retains its status as the deepest capital pool in Europe,” Taylor said.
“Change is needed, however, to maintain this status in the face of increasing competition from other global exchanges.”