The UK could lure more companies to its stock markets by pooling pension funds to invest in British firms and by pushing ahead with listing rules reforms, a group of market veterans told parliament.
(Bloomberg) — The UK could lure more companies to its stock markets by pooling pension funds to invest in British firms and by pushing ahead with listing rules reforms, a group of market veterans told parliament.
Creating retirement funds of £50 billion to £100 billion ($62 billion to $125 billion) to back a wider range of assets including UK projects is “really urgent,” according to Jonathan Symonds, chairman of GSK Plc and head of a government review on the issue.
The government is trying to reverse the trend of companies choosing to list in the US rather than in London. However, pension funds have warned Chancellor Jeremy Hunt not to force them into buying risky assets.
At a Treasury select committee hearing Wednesday, Symonds spoke alongside Julia Hoggett, chief executive officer of the London Stock Exchange, Jonathan Hill, the European Union’s former financial services commissioner who reviewed the listings rules for the government, and Nick Lyons, a financier serving a one-year stint as Lord Mayor of London.
They raised issues such as encouraging entrepreneurs and considering the culture around high pay. Making it easier for retail investors to participate in markets is also a priority, Hoggett added.
“The last time our listing rules were really looked at was in the 1980s,” said Hoggett, who is leading a group called the Capital Markets Industry Taskforce to identify possible reforms. Financial Conduct Authority proposals to simplify premium and standard listing rules should improve the situation, she added.
Hoggett said the UK’s rules on related party transactions should also be reviewed, but that significant change was beyond the remit of the FCA. The area was seen as a factor in Arm Ltd.’s decision not to list in the UK last month.
The need to reform is made more pressing by the US Inflation Reduction Act, which is “sucking” investment from across Europe, according to Symonds. “It is the biggest shift in the competitive dynamic in my career,” he added.
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