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Britain proposes company listing reforms to catch up with New York

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By Huw Jones

LONDON (Reuters) – Britain’s financial watchdog proposed on Monday making it easier for tech companies to list in London to strengthen the capital’s ability to compete with New York and the European Union following Brexit.

The Financial Conduct Authority (FCA) has proposed allowing “dual class share structures” for “innovative, often founder-led companies” listing on the London Stock Exchange’s premium segment.

Dual class share structures are popular in New York, allowing founders of companies to maintain control at the expense of ordinary shareholders.

They are already available in London on the standard segment, but shareholder rights groups who back “one share, one vote” oppose their introduction on London’s premium segment where top companies list.

The FCA also proposed cutting the amount of shares that must be made available to the public or free-float to 10% from 25%.

The minimum market capitalisation, however, for both the premium and standard segments for ordinary commercial companies would be raised to 50 million pounds ($69 million) from 700,000 pounds.

The proposals stem from a government-backed review of listing rules by former European Commissioner Jonathan Hill, who said they would help London catch up with what was already happening in New York and elsewhere.

“These proposals are essential if we intend for the UK to continue to be a modern and dynamic market. Today, we are acting assertively to meet the needs of an evolving marketplace,” said Clare Cole, the FCA’s director of market oversight.

“Our proposals should result in a wider range of listings in the UK, and increased choice for investors while we continue to ensure appropriate levels of investor protection.”

A public consultation on the proposals will close in September, with final rules due before the end of 2021.

The FCA is also due to announce final rules for easing listings of SPACs or special purpose acquisition companies to catch up with a flurry of listings in New York and Amsterdam.

($1 = 0.7227 pounds)

(Reporting by Huw Jones)

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