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FCA: We’re moving at the ‘speed and precision’ of a Formula One team on London listing reform

The FCA is moving with the speed and precision of a Formula One team in listings reform, an official has claimed
The FCA is moving with the speed and precision of a Formula One team in listings reform, an official has claimed

The Financial Conduct Authority (FCA) is delivering reforms to the UK’s listing regime with the “speed and precision” of a Formula One team, a top official has claimed, despite fears that London’s IPO market has lost ground to the US and Europe in recent years.

Clare Cole, the FCA’s director of market oversight, invoked the high speed style of Mercedes and Ferrari this morning as she mounted a defence of the regulator’s work in overhauling the rules around listing in the UK.

“The adrenaline-soaked anticipation of success. The zooming of wheels spinning in unison to deliver a synchronised performance. Split-second decisions that can have far-reaching consequences,” Cole said at the Westminster Business Forum.

“You would be forgiven for thinking I am describing a Formula One Grand Prix, but I had something far more exciting in mind – the UK’s capital markets ecosystem.”

The watchdog had acted “not unlike the crew at a pit-stop” with “pace, agility and ambition”, she added.

The FCA has been forced to revamp the UK’s listing rules over the past two years after a drop off in IPOs and fresh listings in the UK.

The IPO market in London slumped to fresh lows last year amid a wider global slowdown. Just 23 firms floated on the London Stock Exchange, down from 45 in 2022, which itself was a 62 per cent drop on the record 119 listings in 2021.

The number of firms listed in London has now cratered by around 40 per cent from its peak in 2008.

After London was struck a blow by the chipmaker Arm’s move to float in the US last year, the FCA revealed plans to merge the premium and standard segments of the market and scrap red tape in a bid to tempt more firms to market.

In a consultation paper in December, the regulator confirmed it would also scrap a requirement for firms to get shareholder approval for major deals, which had been blamed for the decision by Arm to head to New York.

“The disadvantage faced by UK-listed companies when competing on the global M&A stage is very real,” Cole said today.

Changes are out for consultation with the industry until March and are set to come in from the second half of this year.

Clare Cole is Director of Market Oversight at the FCA - and argues it's time to have a cultural debate over our appetite to risk as well as pushing ahead with listing reforms
Clare Cole, Director of Market Oversight at the FCA

Cole made headlines last year when she pointed to the “negative” press as one of the reasons for London’s IPO drought.

Asked by City A.M. today whether she felt media was still playing a role in weighing on the appeal of the public markets in London, she said the FCA was “hoping […] that we can encourage much more positivity throughout the industry”.

“I think we all have a role to play in that. The environment can be challenging. I know many issuers have spoken about this before. And it can be quite difficult,” she added.

The media “need to have freedom to talk and to challenge as well”, Cole said.