The City watchdog is to slash red tape and make it easier for companies to list in London in an effort to rival New York.

The Financial Conduct Authority (FCA) will attempt to lure companies to list in the capital by bringing its rules more in line with the US, just weeks after UK tech darling Arm snubbed the London Stock Exchange in favour of New York.

The regulator has proposed to replace the City’s current premium and standard listings regime with a “single segment” system with less-onerous rules.

At present, only companies with a premium listing are eligible to be included in the FTSE indexes - which are influential because they are tracked by passive funds - meaning that scrapping the current regime would mark one of the most significant overhauls of London’s stock market rules since the 1980s.

Lord Jonathan Hill, who previously authored a review into London’s stock market rules, saidthat, if implemented, the proposed overhaul would enable the City “to stand toe to toe” with its international competitors.

London’s stock market is battling to remain relevant following an exodus of companies leaving for New York in recent months.

Fleeing to US

Building materials giant CRH and gambling giant Flutter are among companies fleeing the London market in favour of the US.

Arm’s decision to snub London earlier this year was a blow to the Government, which had lobbied for Arm to return to the British stock market, and added to growing concerns about the competitiveness of the market.

Mark Austin, a partner at law firm Freshfields and chairman of the FCA’s independent listings advisory panel, told the Telegraph: “This is a very welcome move by the FCA and is about making our listing rules much less rules-based and much more disclosure-based - much more like the US system.

“We have to understand that capital markets involve risk and we need to get an insurgent mindset back - otherwise we’ll become a mid-tier regional market.”

The FCA will today launch a consultation on its proposed reforms, which also include removing compulsory shareholder votes for large and related party transactions; axing eligibility rules that require a three-year financial track record as a condition for listing; and easing rules around dual-class share structures.

The reforms are squarely aimed at encouraging fast-growing companies to float on the LSE, which has become a comfortable home for banks, miners and oil companies, but severely lacks the high-growth technology businesses that have propelled other international exchanges to new heights.

FTSE 100

The UK's top share index, the FTSE 100, was up 43 points at 7,816 shortly after opening this morning, following yesterday's 97-point loss on US economic worries.

Brent crude futures edged 0.13% higher at $75.42 a barrel after yesterday's big drop.

Companies reporting today

  • Trading update: Barratt Developments, Flutter Entertainment, Lloyds Banking Group

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