London Stock Exchange Seeks Accelerated IPOs in Listing Review

(Bloomberg) -- London Stock Exchange Group Plc is pushing the U.K. government to shorten the process for companies to go public as part of a review of its listing rules, according to a person familiar with the matter.

Initial public offerings in London take five weeks from publication of the registration document to a stock’s trading debut, after the U.K. market regulator tacked on an extra seven days in 2018 to allow unconnected analysts, from banks not working on the deal, earlier access to information.

The LSE has suggested shorter timetables to the government review, the results of which are expected early this year. The proposals would still give unconnected analysts enough time to form a view about the IPO candidate and relay it to investors, according to the person, asking not to be identified as discussions are private.

LSE declined to comment. The U.K. Treasury and watchdog Financial Conduct Authority didn’t immediately respond to requests for comment.

These changes would bring the City’s listings more in line with swifter procedures on U.S. and continental exchanges. The longer timeline is particularly cumbersome now that companies are accelerating their IPO processes to avoid prolonged exposure to market swings.

U.K. regulators are studying possible changes to the listings regime in an effort to attract more listings from innovative and fast-growing companies. LSE is said to back relaxing the 25% minimum free float requirement and allowing dual-class structures in the premium listing segment.

The review comes as the U.K. has just left the European Union, with a deal on financial regulation still to be negotiated. London has also missed out on a blank-check listings boom in the U.S., as its less investor-friendly rules for these offerings are seen as a hurdle.

Another area of focus is retail participation in U.K. IPOs. The minimum marketing period for listings that include individual investors is six working days. The LSE has suggested relaxing this requirement, as issuers seeking to wrap deals up quickly tend to leave this buyer base out altogether, the person said.

“The rules governing the retail IPO timetable are from an age of checks and postage stamps,” said Anand Sambasivan, chief executive officer of PrimaryBid Ltd., a fintech app that markets share sales to individual buyers. Digital technologies mean time frames can be compressed, “nullifying the main argument for excluding retail investors from public market debuts.”

Still, changing London’s rules has its challenges. The U.K Investment Association, an influential fund management industry body, resisted softening the listings regime for state-controlled companies in 2018. This time around, the IA has also balked at some of the relaxations being reviewed.

Former EU commissioner Jonathan Hill, who is leading the government’s review of the listing rules, closed an industry consultation about the listing rules this month.

©2021 Bloomberg L.P.