LSE CEO Dame Julia Hoggett calls for reforms to revive London’s IPO market amid declining listings

2:15

London’s battle to restore its standing as a leading global listing destination is intensifying, with London Stock Exchange chief executive Dame Julia Hoggett backing sweeping market reforms as the UK seeks to reverse a prolonged decline in initial public offerings.

London accounted for just 2% of European IPO proceeds between January and April 2024, according to Reuters, after a series of high-profile companies chose alternative markets or were acquired and removed from the exchange. Competition from New York and other European financial centres has added pressure on London’s public markets.

Hoggett has argued that regulatory reform is essential to make the UK more attractive to companies seeking growth capital. In July, the Financial Conduct Authority introduced the biggest overhaul of UK listing rules in decades, replacing the previous premium and standard segments with a simplified framework.

Hoggett said, "We congratulate the FCA on delivering the largest set of reforms to our listing rules in decades". She added, "The changes would ensure companies listed in Britain could benefit from a listing regime that better supports their growth ambitions, while increasing investment opportunities and supporting the wider UK economy."

The reforms provide companies with greater flexibility when raising capital and conducting mergers and acquisitions, while removing requirements regarded by market participants as unnecessarily restrictive.

Despite weak recent issuance, Hoggett has said London’s IPO pipeline is building, with prospective issuers coming from the UK, Asia, the Middle East and Europe. Some businesses had delayed listing plans while waiting for the new regulatory regime to take effect.

The challenge now extends beyond regulation. London must persuade domestic and international investors to allocate more capital to UK-listed companies while competing with deeper US equity markets.

With the new listing framework now in place, the focus is shifting towards whether the reforms can translate into a sustained revival in flotations and strengthen London’s position in global capital markets.