CEO Harrison of Schroders: Proposals to overhaul listings rules are step in the right direction but much more work needs to be done
It seems the City of London has developed a new passion — commentating on its own demise. The challenges the UK faces are significant and important. The long-term wealth creation capacity of the country is at stake. But the arguments over those challenges have been well rehearsed to the point of becoming cliched.
The Financial Conduct Authority should be applauded for joining the movement for change with proposals for a regulatory overhaul last week. Reforming the listings regime and simplifying related party transactions will make London an easier place to do business. As importantly, the FCA‘s move recognises that we cannot aspire to a risk-free market in which there are no participants.
Understanding the need to take risk to achieve return is a fundamental tenet on which the City was built. “It’s not enough” has been a familiar refrain in the past few days. Nobody says it is. But it is part of a set of wholesale changes that are now moving swiftly in the right direction. A series of government-sponsored reviews led by Ron Kalifa on fintech, Lord Jonathan Hill on listings and Mark Austin on secondary capital raising have all made important contributions.
The Edinburgh reforms proposed by chancellor Jeremy Hunt for financial services set out an ambitious agenda. The Prudential Regulation Authority is engaging constructively on reforms of the so-called Solvency II for insurance. Nicholas Lyons, the lord mayor of the City of London, is making strides in pushing for the creation of a UK sovereign wealth fund. Regulators, politicians and the wider business community have reached an extraordinary state of agreement. The skies are brightening....
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