By:Pramod Thomas

The chief of Britain’s financial watchdog has said that it will always play a full part in UK’s listing reforms and was open-minded about changes.

Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), has said that the UK has to compete for investment, including from UK pension funds, and we cannot assume it will naturally flow into the country.

While speaking at the Global Investment Summit at the Guildhall in London on Wednesday (29), Rathi pointed out that regulation is only one element to encouraging firms to list in the UK.

The watchdog will publish a blueprint for further reform of the listings regime, he added.

Rathi said that the FCA saw value in allowing experienced investors the flexibility to form their own judgement in making investment decisions based on issuers’ disclosures and rely on their considerable negotiating power.

Britain made some changes to listing rules in 2021 to help attract tech company flotations as part of a wider set of reforms to keep London a globally competitive financial centre after being largely cut off from the European Union by Brexit.

The decision by UK chip designer Arm to only list in New York has added to calls for further changes, with the London Stock Exchange saying that ‘pace and precision’ is needed in reforms.

“The UK needed to be clear eyed about the cumulative impact of ‘asymmetries’ between the UK’s approach and those taken by other jurisdictions, and of the need to constantly work to ensure a level playing field through regulatory cooperation and market access discussions,” the FCA chief executive said.

Rathi explained the FCA planned to consult on replacing the current standard and premium listing segments for shares in commercial companies with a single listing category with one set of requirements.

“This change, coupled with a focus on transparency, would lead to a significant reform of the FCA’s listing rule book,” he added.

During the speech, Rathi set out possible reforms to the UK framework for asset management to ensure its proportionality, continued alignment with high global standards and to better support innovation.

According to him, the proposed environmental, social, and corporate governance (ESG) labelling regime for investment products will build trust in the growing sustainable investment category.

He also called for an open discussion about the cultural change reform and stressed the need for wider, concerted action.

Rathi also asked for engagement in the debate to meet global ambitions, high standards and proportionate regulation.