London competes for next Google

In a bid to stay competitive with the US, the London Stock Exchange is offering its own set of simplified rules for high-growth businesses.

The London Stock Exchange (LSE) plans to carve a “High Growth Segment” into its listing rules that will cater to mid-market businesses. 

The draft rules allow EU business owners who have grown their company at least 20 percent over three consecutive years to publicly list their business while retaining as much as 90 percent of the equity. 

The reforms address criticisms that the UK has not done enough to attract the next Google or Facebook from its US competitor Nasdaq. In similar effort, the US is trying to lure the next tech giant to its shores with the Jumpstart Our Business Startups Act, which simplifies the listing procedure for emerging growth companies. 

For private equity firms, the advantage of a more relaxed LSE free-float requirement – which previously mandated at least 25 percent of a company's equity be open to public trading – is having available an additional liquidity channel for portfolio companies, said in a statement Jonathan King, corporate partner at law firm Osborne Clarke.

LSE intends to launch the High Growth Segment next month, having first solicited comments on its draft rules until 8 March.