British Government changes rules of shares placement
The British Government plans to introduce new rules for placement of shares on the London Stock Exchange. They are necessary to ensure full operation of the market after the country leaves the European Union. The authorities want to attract as many technological companies as possible after the Brexit procedure, which will allow London to retain its status of a major financial center. The new rules will be developed in cooperation with the market regulator.
After the end of Brexit’s transition period, the UK has the right to introduce its own rules for the financial market, without taking into account the laws that apply in the EU. Therefore, the government of the Kingdom intends to revise a number of rules, which will stimulate the development of the segment and will contribute to the growth of GDP and improvement of the country’s situation. Besides, changing the rules of securities placement at British exchanges will give an opportunity to strengthen the position at the world stock market and to compete with the US and Asian exchanges.
Before formalizing the new rules, experts need to assess the current rules that companies are currently facing when they list. First of all, experts will analyze such parameters as the allowable free float threshold, peculiarities of the double class of shares, as well as the rules of issue of the share prospectus.
The stock market is not the only segment that requires a review of the rules after the UK’s exit from the EU. During the transition period, the kingdom used European rules and traded with union countries without duties or quotas. However, the period of adaptation has passed, Brexit is finally over, which requires the UK government to create new principles of taxation, interaction in different markets. Besides, the parties could not come to a solution on a number of issues for a long time; the negotiations were tense and prolonged. First of all, it concerns the trade agreement, where fishing was a stumbling block. The United Kingdom opposed the European Union’s industrial fishing in a number of zones, the deadline was postponed several times, negotiations were disrupted, and the situation between the countries was extremely tense. However, by this year the document had finally been ratified, although the parties had to make mutual concessions.
In this case, the United Kingdom held a very principled position, believing that the law on fisheries also concerns sovereignty. In addition, London and Brussels agreed on other issues, such as export/import duties for goods and services.
Despite the fact that at the beginning of Brexit many experts were sceptical, the country managed to restructure the economy with minimal losses in a relatively short time.