UK-based IPOs could see their timelines reduced under proposed changes designed to make London a more attractive place for companies to list their shares.
The Financial Conduct Authority is reportedly in early stage talks to shorten the amount of time it takes for companies to launch initial public offerings
Bloomberg said the changes could see timelines reduced by as much as a week in a bid to boost listings on the London market.
London has seen a sharp slowdown in IPO activity over recent years, with the City now languishing outside of the top 20 global markets for IPO activity.
Meanwhile there has been a steady exodus of major companies like Wise and Flutter choosing to shift their primary listings away from London.
Recent weeks have shown signs of improvement, with Shawbrook and Princes Group both planning IPOs, while The Beauty Tech Group debuted earlier this month, raising £107million.
The changes could see timelines reduced by as much as a week in a bid to boost listings on the London market.
Jonathan Parry, partner in the White & Case Capital Markets group, said: ‘We are now in the early stages of a recovery in the IPO cycle, with companies and investors eyeing the longer-term attractiveness of the UK as a listing venue.
‘Any further reforms will help build on the growing IPO momentum and help London reassert its position as Europe’s largest and pre-eminent listing venue.’
There is no certainty any reform will go ahead, Bloomberg said, citing people familiar with the situation.
Currently the UK has a two-stage filing system, which critics say makes London listings more at risk of market fluctuations compared to public offerings on other European exchanges.
In 2018 the FCA shifted rules to bring in more external research at the prospectus stage to give investors more information on the offering. These potential changes would reverse the earlier changes.
The two-stage process gives outside analysts time to write reports on the company before IPO marketing.
In Europe, however, the intention to float statement is also the start of the marketing process, but companies themselves share information with analysts ahead of the announcement to float, so that they have time to prepare reports.
Parry said: ‘Removing the two-stage Intention to Float approach would be a welcome change to the London IPO process. The existing approach has not really generated the volume of unconnected analyst research that was hoped for.’
The FCA has already announced plans to remove the requirement to publish prospectuses before launching new shares and has halved the length of time that firms have to wait before they can offer shares to the general public to three days after prospectus publication.
The FCA declined to comment on the situation.
The regulator is currently undergoing a number of reforms to capital markets, including changes to its prospectus regime, and altering the rules for bonds and derivatives to reduce costs for firms and give better data to investors.
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