London Stock Exchange to launch high growth market

LSE outlines plans to attract medium-sized, fast-growing companies to the UK

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London Stock Exchange has revealed plans for a new, niche market designed to bring high growth companies – such as tech firms – to the London market.

The new high-growth segment, set to launch in March, will feature a minimum free float of just 10 percent, compared to 25 percent on the main market, allowing companies to retain greater control after listing.

With no European tech firms floating on London’s main market in almost three years, the government – and LSE – are keen to attract tech companies to the UK. Last year the government was reported to be considering a relaxing of IPO rules in a bid to lure tech firms away from the US, where they can take advantage of an existing 10 percent free float on NASDAQ.

To qualify for the new market, companies must show revenue growth of at least 20 percent over the last three years, as well as an intention to list on the main market in the future. Companies must also be incorporated in the European Union. Some types of firms will also be excluded, such as mineral companies at exploration stage or investment entities, explains LSE’s rulebook for the market.

‘The government is committed to making the UK the best place in the world to start and grow a business,’ says Greg Clark, financial secretary to the Treasury, in an LSE press release. ‘High-growth companies are a key driver of job creation, and these companies will be vital to delivering the recovery.

‘The UK has a world leading crop of high growth businesses, and the announcement of the high-growth segment today by London Stock Exchange is an important step in creating the right environment for them to IPO in London.’