There is a need for significant reform of the UK’s equity markets because there has been a steady decline in listings over the past two decades, argues the QCA in response to Lord Hill’s Listing Review.
The QCA proposes that the best solution is to create a new market that would reinvent the current Standard Listing. This new market would seek to emulate the success of the Nasdaq in the US by focussing on flexibility and agility, in order to attract and foster a wide array of growth-focused businesses.
The review establishes a number of areas for reform, such as free float and prospectus requirements but the QCA believes that these rules should be relaxed in the new market rather than pushed through in the Premium Listing. This would mean the UK has a home for companies seeking greater dynamism while maintaining the high standards demanded from investors of Premium Listed companies.
A key role would be played by the FCA to provide oversight across the segments to ensure the rules establish differentiation but not confusion. All market stakeholders would also need to promote the new market to companies and investors, ensuring that it is presented as a welcoming place to issue and buy shares.
CEO of the QCA Tim Ward said:
"The evidence points to a glaring gap in the UK equity market offering. It’s essential to address this and create markets that are fit for our future. Leaving our equity offering little changed since the 1980’s is simply no longer an option. The types of company that want to list has changed, the markets need to follow suit quickly if they want to stay in the game."
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Lorence Nye, Head of Policy, QCA
020 7710 8752
About the QCA
The Quoted Companies Alliance is the independent membership organisation that champions the interests of small to mid-size quoted companies.
There are around 1,250 small and mid-size quoted companies in the UK, representing 93% of all quoted companies. They employ approximately 3 million people, representing 11% of private sector employment in the UK, and contribute over £26bn in annual taxes (source).