The UK government named a senior lawyer to lead a review designed to chart how ministers can make Britain a more attractive destination for stock exchange listings.
(Bloomberg) — The UK government named a senior lawyer to lead a review designed to chart how ministers can make Britain a more attractive destination for stock exchange listings.
The appointment of Rachel Kent, a senior partner at law firm Hogan Lovells, is set to be announced Thursday by City Minister Andrew Griffith, the Treasury said late on Wednesday in an emailed statement. The review is due to begin on Monday, with Kent expected to report within three months, it said.
Ministers are trying to allay concerns about London’s future as an international financial center that have been stoked in recent days by chip designer Arm Ltd.’s decision to list in New York and not the UK. A string of other companies are looking to move their shares to the US, while the increasing gap in the valuation of British companies compared to their US counterparts is also of concern to the government.
Read More: UK Regulator Offered Arm ‘Significant’ Changes to Listings Rules
“The right depth and breadth of investment research is vital to ensure markets operate well and companies obtain the valuations they deserve,” Griffith is due to say in a speech at FIX Trading.
The review was announced in December as part of the government’s “Edinburgh Reforms” to look at possible improvements to analysts’ research to help attract more investment into companies. The research helps investors understand the performance of companies and the risks they face, enabling them to assess their value.
UK Attractiveness
“Concerns have been raised about the quality and quantity of investment research produced in the UK as compared to other jurisdictions – particularly for certain sectors like tech and life sciences,” the Treasury said. “This could undermine valuations and therefore the attractiveness of the UK as a place to list and make it harder for companies to access private capital.”
Among the ideas put forward by firms to the government is potential deregulation of European Union rules preventing analyst research payments from being bundled with other fees.
Removing that restriction could increase the amount of research produced, especially covering smaller companies, many in the financial community say. That could help stir investors’ appetite in those businesses, they say.
Kent is expected to look at that issue and will also consider wider ways to boost investment in the UK. Her work comes as the government’s Financial Services and Markets bill — its framework for post-Brexit financial rules — is close to being signed into law.
There is a desire among some senior executives for the government to go further in cutting red tape and pursuing policies to promote competitiveness, partly due to skepticism that trying to align with the EU will break down barriers over access to its market.
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