London Goes Radical to Take On New York and Amsterdam

A long awaited review into how the U.K. can reinvigorate its capital markets has not held back. It goes further than addressing inconsistencies in the current regime for initial public offerings and special purpose acquisition companies. The smorgasbord of policy prescriptions make sense, but the vision of a generally more flexible and amenable regulator warrants caution.

First, consider the necessary steps needed to make the City of London competitive with New York and Amsterdam. Former EU commissioner Jonathan Hill’s report sensibly backs allowing dual-class shares with a five-year limit and other constraints. Founder-managers of companies would finally be able to maintain control if they list on London’s “premium” market segment. It’s a pragmatic compromise on the U.K.’s one-share one-vote doctrine that will give investors more choice at an acceptable cost in terms of temporarily limited outside influence.