LONDON (Reuters) - Britain plans to make it easier for technology firms to list their shares in London, the government said on Thursday, in an attempt to stem the flow of high-growth companies heading across the Atlantic in search of capital.
Europe has seen a slowdown in initial public offerings (IPOs) generally over the last two years, as euro zone debt worries buffeted stock markets, and some technology firms have ditched their attempts to go public in Europe in favour of the United States - a more well established hub for tech flotations.
“There is a rich crop of innovative European high-tech companies that will be going to the financial market over the next few years. We’re determined to make sure that as many as possible should do an IPO and float in the UK, not elsewhere,” David Willetts, Minister of State for Universities and Science, said in a statement.
Plans developed with the London Stock Exchange (LSE.L) and which Reuters revealed last week, will likely include a new route to the stock market for high growth companies, particularly internet and technology businesses, and changes to rules on free float, eligibility criteria and reporting requirements.
The aim is that this route will act as a “launch pad” for European mid-sized high growth businesses seeking a full premium listing on London’s main market, the government said.
The move follows U.S. President Barack Obama’s JOBS Act earlier this year, which reduced the regulatory requirements for small companies going public on U.S. stock exchanges.
The British government’s changes, aimed at making the UK an equally attractive place for companies to raise capital, are part of its broader quest for economic stimulus and employment growth that could inject some life into the moribund economy.
“The quality of the entire business ecosystem will improve if the UK remains globally competitive, and particularly so with the US, so that we retain more of our best tech companies and all the jobs and revenues that they create,” said Reshma Sehoni, partner at Seedcamp, which invests in early stage tech firms.
The government said it would also review regulations which may be deterring investors from funding growth companies, and would work with LSE to try and widen the availability of equity capital for both UK and international businesses in London. (Reporting by Kylie MacLellan; Editing by Elaine Hardcastle)