The Financial Conduct Authority today announced an overhaul of the UK listing regime, aimed at making London’s struggling capital markets a more attractive place for global businesses.
But Tom Lee, head of trading proposition at Hargreaves Lansdown PLC (LSE:HL.), warned that certain measures being implemented by the FCA could harm shareholders.
While “a successful listings regime which supports our home market is essential,” Lee added that “making the UK an attractive place to list has to be balanced with rights for shareholders and ensuring that the quality of the market is not diluted".
Under the new listing rules coming into effect at the end of the month, listed companies will not require shareholder approval on significant or related-party transactions. They will also have more flexibility around enhanced voting rights.
“We have been concerned that the plan to remove shareholder votes on significant and related-party transactions would dilute investors’ rights,” said Lee. “We will watch closely as these new rules embed.”
On the bright side, Lee noted that retail access to primary and secondary listings will be enhanced under the new rules.
“The demand from retail investors to buy into the equities market is there, and regulatory change should support this demand.
“Boosting retail investment on the stock exchange will have wider market benefits, providing depth and liquidity, as well as boosting interest in investment with the wider public, unlocking further capital for UK-listed companies.”