Key figures in the City of London have applauded the UK's stock market reforms announced today, which are set to ease the regulatory burden on companies seeking to list on London’s exchange.

The Financial Conduct Authority (FCA) unveiled a significant overhaul of the prospectus rules, aimed at reducing the complexity and cost associated with raising capital and listing on the London Stock Exchange. This move addresses longstanding criticisms that bureaucratic hurdles and high expenses have hampered London’s ability to attract and retain businesses.

Mark Austin, a partner at Latham & Watkins who led a government-commissioned review of the UK capital markets, commented: “The latest consultation on prospectus regulations will cut costs for listed companies, simplify capital raising, and boost retail investor engagement. With these changes, the UK will have a competitive framework that rivals the best globally.”

These changes to prospectus rules come shortly after the FCA’s recent update to listing regulations, which began to take effect today. The new framework, described as the most substantial overhaul in three decades, aims to streamline the listing process for companies.

Delphine Currie, a partner at Reed Smith, described the reforms as a crucial step in making the London market more competitive with US and EU exchanges. She said, “The new rules are essential for addressing the decline in listings and position London to capitalize on the significant demand for initial public offerings (IPOs).”

The comprehensive reforms are seen as a response to the challenges faced by UK capital markets in attracting high-profile firms. According to research by BDO, over a quarter of medium-sized companies are contemplating listing abroad, with many calling for even simpler regulations to facilitate mid-sized business listings.

Richard Austin, a partner at BDO, noted, “Medium-sized enterprises are vital to the UK economy, providing significant employment and investment. Our findings indicate that many of these companies are considering listing outside the UK. Streamlining listing processes, expanding government grants, and simplifying R&D tax credits could help these businesses stay in the UK and unlock substantial private sector investment.”