FCA Chief Appears to Pave Way for Shein UK IPO

Great Britain’s financial regulator has reportedly opened the door for Shein to go public there.

While not mentioning the eCommerce retailer by name, Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), told the Financial Times (FT) Tuesday (Dec. 3) that decisions about public listings were based on company disclosures and not “every aspect” of their corporate behavior.

Rathi added that it was “not unusual” for companies that go public in the U.K. to carry legal risks in other parts of the world and “what’s important is that they disclose it, the investors understand it and they can price that risk.”

Earlier this year, Shein filed confidential documents with the FCA for an initial public offering (IPO) in the U.K., a listing that would value the company at 50 billion pounds ($63 billion). As the FT notes, the FCA has faced calls to block the IPO because of allegations that Shein uses slave labor along its supply chain.

“What parliament has not asked us to do is to be a broad regulator around every aspect of corporate behaviour and every company listed in the UK, everywhere around the world,” said Rathi, who declined to comment on Shein specifically.

For example, he said, there are mining companies that list in London and “find themselves facing legal difficulties in many different parts of the world.”

Asked if allegations of human rights violations or forced labor would keep the FCA from allowing a listing, Rathi said the watchdog was focused on “disclosures around the legal risks that a company may be subject to.”

Shein began considering a U.K. listing after facing pressure in the U.S., where lawmakers have expressed concerns about the company’s ties to the Chinese government. While founded in China, Shein is now headquartered in Singapore. It no longer does business in China, but most of its suppliers are based there.

Meanwhile, last week saw reports that Shein and rival Temu were likely to account for a larger share of holiday season toy sales in Europe and the U.S. As Reuters reported, the companies are expanding their toy offerings while also building a reputation as sellers of a range of goods.

Although Shein gained popularity as a fast-fashion merchant, toys have become one of the company’s fastest-growing categories, a spokesperson told Reuters.