The City watchdog will consult on streamlining its company listing rules to help London compete better with New York in company floats.
Financial Conduct Authority (FCA) boss Nikhil Rathi said the regulator is launching a consultation on replacing its twin-track standard and premium company listing regime with a single regime and set of requirements.
The UK tweaked listing rules in 2021 to help attract tech company flotations as part of a wider set of reforms to keep London a globally competitive financial centre after Brexit.
UK chip designer ARM Holdings PLC's (LSE:ARM) decision to only list in New York has added to calls for further changes, with plenty of FTSE companies also opting to shift their main or sometimes only listing away from London, including CRH PLC most recently and others mooted to be potentially following.
with the London Stock Exchange saying that "pace and precision" is needed in reforms.
"Rather than simply lamenting these decisions or insisting that a few regulatory levers would change the outcomes, it is important to recognise there has not until now been a fundamental discussion about the entire ecosystem," Rathi said in a speech, Reuters noted.
"We plan to propose replacing our current standard and premium listing segments for shares in commercial companies with a single listing category with one set of requirements," he added.
Some market participants have also told the FCA that premium listing standards are burdensome and deter some companies, so it will propose scrapping requiring companies to have a three-year financial track record as a condition of listing, which is a challenge for startups, Rathi said.
He also noted that the fall in pension scheme investments in UK companies from over 50% in 1992 to less than 2% today, reflecting changes in the treatment of dividend tax to accounting rules and other global economic shifts.
"Overseas investors now own a majority of the UK equity market – this can be both a cause of celebration and, in some quarters, concern."
Rathi also said sustained commitment was required from all parts of the City, and that asset managers "need to keep investing in capacity to undertake investment analysis", noting that in some markets equity research for SMEs is funded by the local exchange.