McDermott Comment | Should The UK Change Its listing Rules To Attract More Overseas Companies?
Tom Whelan, partner at law firm McDermott Will & Emery, said:
“There is sufficient flex in what we have with the standard segment, and you can always move to premium segment later if you need to amend your capital structure in order to meet the premium segment requirements. The US markets offer the deep liquidity and tend to offer higher valuations – that’s the draw of the US market, and no matter what we do to tinker around the edges in the UK, I don’t think that is going to change in the short to medium term. The tradeoff is the price of US regulation and more draconian reporting requirements, and penalties if you get it wrong.
The UK should emphasise more the flex of the standard segment for those looking to a London listing where the company doesn’t meet premium segment requirements, and that it has slightly less burdensome regulatory requirements. On balance, I think the unicorns will still head to Nasdaq (no matter what the UK markets do) for the higher valuation and liquidity.”