Should investors be wary of London listing rules shake-up?

There has been a global race to the bottom when it comes to regulation, writes James Moore – but is Britain joining in?

Britain’s financial watchdog has revealed plans to encourage more companies to list on UK stock markets (PA Archive)

Plans by the City watchdog to shake up the rules companies must follow to list on the London Stock Exchange have sparked debate among investors, who will have to deal with the consequences, good and bad.

Under the changes, proposed by the Financial Conduct Authority (FCA), companies that disdain best practice when it comes to corporate governance will no longer have to do business in economy class. There will be an end to “premium” listings for companies that tick the right box, alongside an easier path to the market for candidate companies and greater tolerance of the dual-class shares beloved by tech company founders who like to have 10 times the votes of those whose funds they tap. They won’t even have to hold votes on the acquisitions they want to make.

It is interesting to note where the some of the initial criticisms of the plans came from following their announcement: active managers such as Jupiter and Newton (per the Financial Times), whose funds aim to beat the market by picking what they see as the best stocks.