Potential new route to the London IPO market for high-growth companies

Author: Paul Airley

On 20 September 2012, the Department for Business, Innovation and Skills (BIS) announced that it had developed a set of proposals with the London Stock Exchange to introduce a new route to the UK IPO market for high-growth companies, particularly internet and technology companies, aimed at providing a “launch pad” for companies seeking a full Premium listing on the Official List of the UK Listing Authority. The new route to market is intended to complement the UK’s existing markets, including AIM and the Premium segment of the London Stock Exchange’s Main Market.

The new proposals are intended to have a similar effect to the US JOBS Act, which streamlined the regulatory burden for growth companies listing on the US public markets, to make the UK an equally attractive competitive listing destination for high-growth businesses.

The proposals are likely to include amended rules for high-growth companies on:

  • the “free float” (currently, at least 25% of the shares of a company applying for a Premium listing must be held by the public in one or more EEA states at the time of listing);
  • listing eligibility criteria; and
  • financial reporting requirements.

The proposals will sit alongside the FSA’s ongoing consultation on wider issues relating to the UK listing regime. The FSA’s proposed amendments to the listing rules are expected to be published in October 2012.

Further details on the eligibility criteria and benefits of the new route to market are expected to be published before the end of 2012, and will be the subject of a consultation.

Paul Airley, Partner, Fladgate LLP (pairley@fladgate.com)

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