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In an effort to help London keep pace with New York, the UK stock markets regulator said new listing rules would be released this week, according to a report from Reuters Thursday (Dec. 2).
The updated rules, which were made available to the public earlier this year, are intended to bolster London’s position as a global center for publicly traded companies.
When the rules go into effect, a company’s founders would retain an initial measure of control while allowing for some form of dual-class share structures in premium listings for five years.
According to PYMNTS, governments in Europe have been working for some time to make initial public offerings (IPOs) for home use more affordable, particularly in view of a set of technology-friendly regulations.
The move to change listing rules comes at a time when more European companies are listing in the US.
Read more: European companies rush to US list
Through August of this year, $9.5 billion had been raised through IPOs in New York, the most over the period in more than 20 years, according to PYMNTS. The appeal of US IPOs stems from the high first-day returns and the willingness of Wall Street investors to pump large amounts of investment into new stocks.
To turn the tide, Britain is working to implement the changes, which are expected to take effect on December 3 for the London Stock Exchange and Aquis, according to Reuters.
Under the changes, the company’s shares that can be publicly traded will fall from 25% to 10%, while the minimum market cap for the premium and standard listing would increase from £700,000 ($930,692) to 30 million pounds ($39.8 million), which is significantly less than the £50 million ($66.4 million) initially put forward, according to the report.
But even before the rule changes, London saw its highest number of IPOs since 2014 in the first half of this year, according to PYMNTS.
More here: London Exchange reports highest IPO numbers in years
In addition, 100 UK tech companies reached a valuation of at least $1 billion, compared to just seven companies that reached that milestone in 2020.
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