UK urged to change stock market rules to boost fintech sector post-Brexit

The government has been urged to set up a £1bn startup investment fund, introduce special fast-track visas to draw global talent and change the UK’s stock market listing rules to protect and grow Britain’s financial technology sector post-Brexit.

The recommendations are made in a report commissioned by the chancellor, Rishi Sunak, that warns that growing overseas competition and Brexit uncertainty, including the more complex issue of hiring talent from Europe, is threatening the UK’s position as a leader in the fintech sector.

The 108-page report by the former WorldPay chief executive Ron Kalifa calls for changes to UK stock market listing rules to stop fintech companies being lured to float in bases such as New York, Paris or Frankfurt. Changes could include introducing dual-class share structures, which give founders more control over their business after an initial public offering (IPO), and dropping the minimum number of shares that must be made available to 10%.

The report found that out of 3,787 IPOs on the world’s major stock markets between 2015 and 2020, the UK accounted for just 4.5%.

“IPOs are thriving globally, driven in part by tech companies that have become indispensable to both consumers and businesses in search of digital tools amid the coronavirus pandemic, and it is important the UK seizes this opportunity,” said Kalifa.

Britain has a 10% share of the global fintech market, generating about £11bn in revenues, and is home to success stories including Revolut, Monzo, Starling Bank and Wise, formerly TransferWise.

Other recommendations include launching a new privately financed £1bn “fintech growth fund”, creating a new visa “stream” to more easily allow access to global talent, and setting up a “scalebox” to support fintech firms to grow.

Sunak, who could unveil support for some of the recommendations in his budget next week, said: “We must now build on our global reparation for fostering innovative startups and ensure firms can access the talent, finance and support they need to scale up here in the UK. This review will make an important contribution to our plan to retain the UK’s fintech crown.”