London stocks face more delistings amid regulatory reforms

British business leaders anticipate a continued trend of delistings on the London Stock Exchange over the next few years, despite recent reforms introduced by the Financial Conduct Authority (FCA). A survey conducted by the Chartered Governance Institute UK & Ireland revealed that over half of the FTSE 350 company boards expect net delistings to persist, while only a third believe the trend will reverse. This sentiment reflects a broader dissatisfaction with the FCA's reforms, which many view as ineffective in addressing longstanding market issues. Peter Swabey, policy and research director at the Chartered Governance Institute, criticized the FCA's approach, arguing that the reforms have compromised essential investor protections without attracting new listings. The FCA's overhaul of the listing regime aimed to rejuvenate the stock market by allowing companies greater flexibility in operations and facilitating dual-class share structures. However, critics contend that these changes may lead to an influx of lower-quality companies, further undermining market integrity. The U.K. capital markets have faced significant challenges, including increased competition from international markets and a decline in domestic investment. British companies have increasingly opted for listings in the U.S. to secure better valuations and access larger capital pools. Additionally, pension schemes have reduced their investments in domestic stocks, exacerbating the situation. Swabey urged the government to consider radical reforms to restore confidence in the stock market, suggesting that pension fund reform could be a quick and effective solution to address the ongoing decline in market participation and investment.