London Stock Exchange Aims to Attract Private Tech Firms With Special Listings

The London Stock Exchange (LSE) wants to draw big-growth tech firms to the U.K. as Brexit has seen the dust settling, according to a report Saturday (Jan. 15) from The Wall Street Journal.

This could blur the line between public and private companies, as the LSE has proposed making a special market for private companies to trade their shares publicly on some days.

The private shares would trade publicly between one and five days in every trading window, once a month or quarter, or every six months. Additionally, they wouldn’t be subject to the levels of regulatory oversight as fully listed companies, which has been a hurdle toward listing shares for other companies in the past.

The report notes that startup founders, their employees and early stage investors would be able to raise cash through selling shares to retail and institutional investors.

Startup founders and others would be able to garner cash through selling shares to investors, both of the retail and institutional stripe, while large private companies would also be able to access the public market. Banking app Revolut, buy now, pay later (BNPL) firm Klarna and others have used this model before.

According to a representative from the London Stock Exchange Group, there could be “potential for additional routes to market to support the widest range of companies through their funding lifecycle,” which could include going from private to the public markets, and then back again.

Meanwhile, the U.K. is looking to change up its financial markets in the wake of Brexit. Last November, the U.K. government granted the Financial Conduct Authority a mandate to make competition easier.

All of it could be a boon as London tries to draw in younger, faster-growing companies, as tech firms typically list in the U.S. or Asia.

PYMNTS recently reported that a plan has been proposed to spot holes in U.K. regulations, identifying regulations that haven’t kept up with innovation for crypto and artificial intelligence.

Read more: New UK Institute Could Spot Crypto, AI Regulation Gaps

“The business world will be changed by technology, and a challenge will be providing a platform for the supporting law for these new technologies,” said Richard Susskind, director of independent institute LegalUK.