UK could block stock market listings on national security grounds
Companies could be blocked from listing on the London Stock Exchange on national security grounds, under new rules being considered by the Treasury.
The department said it will consult on the proposals in the coming months.
As first reported by the Financial Times, it will consider whether a listing could be stopped if it gave a foreign state access to state or commercial secrets.
Firms owned by people who might harm UK interests could also be blocked.
In a statement on Tuesday, a Treasury spokeswoman said: “The UK’s reputation for clean, transparent markets makes it an attractive global financial centre.
“We’re planning to bolster this by taking a targeted new power to block listings that pose a national security risk, and will launch a consultation to inform its design in the coming months.”
It comes after Chancellor Rishi Sunak said he planned to relax the UK’s strict stock market listing rules to attract more fast-growing companies from abroad.
Proponents say it could draw much needed investment to the UK, as technology companies would be encouraged to choose London over places like New York to list their shares.
However, some fear it could lead to more accounting scandals, as boards would potentially be less accountable to investors.
They also argue that the City watchdog, the Financial Conduct Authority, lacks the teeth to regulate companies as closely as its peers in the US, following scandals at firms such as Carillion, NMC Health and Tesco.
Under the Treasury’s national security proposals, companies owned by people whose activities may harm UK interests could also be blocked from selling shares on the London market.
The new rules would be focused on strategic areas of importance such as technology, defence and national infrastructure.