CrowdX welcomes HM Treasury consultation into prospectus reform

HM Treasury has launched a consultation on the regulations surrounding the publication of prospectuses ahead of debt or equity issuance. This has been triggered in the wake of Lord Hill’s review of the UK listing regime and as advocates of public capital market reform, this is something the team at CrowdX are very keen to welcome.

 

Mike McCudden, CEO of CrowdX, commented:

“CrowdX is the new secondary market for the trading of private company securities. Although the current listing regime does offer some scope for smaller issuers to access capital markets, often they will find themselves constrained by disproportionately high costs when it comes to meeting their statutory obligations. As a result, this can lead to fast-growth companies either selling out to larger competitors or having to rely on expensive bank lending to fund expansion. The public capital market in these situations is unable to serve the needs of the public in general.”

CrowdX is actively engaged in the consultation, with highlights of our response including:

  • Applauding the idea of listing reform, most notably as a result of the imbalance which currently exists between listing venues in the UK. Allowing smaller markets to devise their own admission and listing requirements can result in a lack of transparency for market participants, so ensuring the prospectus disclosure details are standardised here would improve the quality of the UK market.
  • Also, affording greater discretion to the regulator in terms of when an issuer needs to publish a new prospectus would also greatly enhance London’s appeal as a listing venue, as would the ability to streamline dual listing applications from those already traded on exchanges in third countries. We see CrowdX as being well positioned here to have the necessary flexibility when it comes to assisting those wanting to raise a modest amount of capital in the UK.

We have provided a fuller response to HM Treasury in the consultation document and believe that progress here will truly enhance the UK’s allure as a venue for raising capital. Any successful listing reform will need to be driven by a commensurate focus on the technology to enable this to integrate into the modern financial world. The automated processes we have developed at CrowdX are just one such example of how we intend to help drive the UK’s future success on the global financial landscape.

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