06 November 2006

Independent: UK hails victory over EU listing rule

Foreign companies will be given an extra two years to prepare for a European directive on reporting requirements that experts had said could force them to abandon their London listings, Ed Balls will say today.

Mr Balls, the City minister and key ally of Gordon Brown, will tell Japanese investors the Government has persuaded Brussels to delay this part of the Transparency Directive until 2009. He said this would aid more than 80 Japanese firms and several hundred multinationals listed in London.

It is the latest high-profile move by the Treasury to convince the City it will defend its light-touch regulation style from threats from the EU and the US. The directive, which comes into effect in January, sets a common standard for listing and financial disclosure across all 25 EU nations. Charlie McCreevy, the internal markets commissioner, wants to increase protection for investors. But organisations such as the London Stock Exchange and the British Bankers' Association had warned that foreign firms that had chosen to list in London would be forced to abandon their listing.

Mr Balls will tell Japanese investors such as Nomura and Mizuho at a lunch hosted by the Treasury and the CBI that the delay will avert a “disruption to markets”. “Europe was in danger of applying rules in a way that would have made our markets less attractive to non-EU companies especially the US and Japan, for the sake of an artificial timetable on convergence,” he will say.

London has become the location of choice for foreign firms seeking a listing from the US and Japan as well as more exotic locations such as Russia, Kazakhstan, Chile and South Africa. Meanwhile, the Financial Services Authority will today highlight concerns about the volume of debt held by private equity firms.

© The Independent