The government launches a review of the rules for raising capital as part of the overhaul of the stock markets


The government has launched a review of UK capital raising rules to help make the UK a more attractive destination for listings.

The UK secondary fundraising review will examine whether rule changes and better use of technology could make fundraising more efficient for companies already listed on UK markets.

The review comes in response to Lord Hill’s UK Lists Review, which was released in March and aimed to make the UK a more attractive destination for IPOs and improve capital raising for large and small businesses.

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Chancellor Rishi Sunak has appointed Freshfields partner Mark Austin to lead the latest review.

“Our plans to boost UK markets go beyond attracting the world’s most successful companies to register here,” Sunak said.

“We want to ensure that companies that already operate our major global financial markets can raise funds effectively and include their current shareholders in the process.

“I am pleased that Mark has agreed to lead this effort and push forward this important recommendation of the Lord Hill List review in the UK,” he added.

“The brief is to be reformist and look at him with fresh eyes,” Austin said. Financial news.

He said the review will look at lessons learned from pandemic fundraising, recent technological advancements, practices in other jurisdictions and how to further engage retail investors in secondary fundraising.

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“There is a big emphasis on trying to make the market more accessible,” he added.

Firms raised £ 30bn of new stocks in UK capital markets in 2020 as they sought to strengthen their balance sheets in the face of the Covid-19 pandemic.

Most of these companies have chosen to raise funds through private placements with small groups of institutions, which can be done quickly and inexpensively, but exclude existing shareholders and dilute their stakes in the company.

The Hill study found that companies were discouraged from using mechanisms such as rights issues to raise funds because they involve greater costs, time and uncertainties and require the publication of a prospectus.

The panel of experts chaired by Austin will review these regulatory barriers with the aim of broadening the choices of listed companies seeking to raise capital.

It will examine how long the process takes, whether the technology can be used to better communicate with shareholders and also examine fundraising mechanisms used in other international markets.

“Improving the efficiency of secondary capital raising by listed companies is an important part of making the UK an even more attractive place for companies to list,” said Austin.

“I want to receive the views of a wide range of interested parties, which is why we are launching the review with the call for papers,” he added.

The call for testimonials will run until November 9 with a final report expected in spring 2022.

Austin said FN the review was “a unique opportunity to look at this whole area and see if we can improve it for the better”.

To contact the author of this story with comments or news, email James Booth


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