Stock market reforms would ‘pass greater risk to investors’, FCA says

theguardian.com:

The UK’s financial regulator has warned reforms to stock market listing rules will pass greater risks on to investors in British companies, as it presses ahead with changes designed to reverse a decline in London’s position as a top financial centre.

The Financial Conduct Authority (FCA) on Tuesday night said it plans to abolish the stricter “premium” class of London stock market listing, and make it easier for company founders to keep control of businesses using US-style “golden shares”, among a series of big changes to City regulations.

The changes are part of a push by the Conservative government to arrest the decline of the London stock market since the global financial crisis and lure new companies to list here. There were 2,101 companies listed on London’s main market in 2003, but that number has fallen to 1,097 today, according to London Stock Exchange data. The average number of companies floated has fallen from 177 a year before the financial crisis in 2008 to 66 a year in the period since then, according to the data company Dealogic.

The prime minister, Rishi Sunak, a former City financier, commissioned a 2021 review into the UK listing regime that had proposed many of the new changes. The government in December unveiled a separate plan for sweeping deregulation for banks and insurers.

The FCA chief executive, Nikhil Rathi, who previously led the London Stock Exchange, acknowledged that the aim of helping the UK economy grow would mean higher risks for investors because there will be fewer checks on listed companies, in a foreword to a consultation paper published on Tuesday night.

“Access to a potentially wider range of companies listing will provide greater opportunities for investors in UK markets and help create