Softbank and Arm Chiefs Meet Hunt as City Reforms Open Door to Secondary Listing in London

On Tuesday, Arm’s chief executive and owner met with Jeremy Hunt at Downing Street. At the same time, regulators announced reforms that could encourage Arm to have a secondary listing in London.
On Tuesday, Rene Haas and Masayoshi son, the heads of SoftBank’s majority shareholder, Cambridge Microchip, were spotted leaving Number 11.

The Financial Conduct Authority (FCA), which is responsible for London’s listing regulations, unveiled proposals that included a new category to encourage secondary listings.

The Arm was floated earlier this year on Wall Street, which was seen as a blow for Rishi Sunak’s hopes of encouraging more tech companies in the UK to list and to stem the tide of companies leaving the London Stock Exchange.

has left the possibility of a secondary listing to London open in the future. Arm was waiting for FCA to review the rules on “related parties transactions”, which are agreements between companies with existing relationships.
The FCA announced on Tuesday that it would remove the requirement for shareholders to approve transactions involving related parties. This will bring the US regime in line with Canada, where related party transactions must be simply disclosed.

Arm had a problem with related party transactions because they could have meant voting on dozens of SoftBank investments.

In addition, the proposals include creating a secondary listing category when companies already have a primary listing somewhere else. However, only foreign companies would be eligible, meaning Cambridge-headquartered Arm would not be able to take advantage of it as long as it remained incorporated in Britain.

The Treasury didn’t comment on whether Mr Haas or Mr Son discussed the UK listings regime with Mr Hunt. It only confirmed that both men had met Mr Hunt who “regularly meet business leaders and investors to talk about opportunities to drive economic development across the UK”.

Rishi Sunak, as Chancellor, had met with representatives of Softbank and Arm in order to lobby for the semiconductor manufacturer to list in London.

SoftBank and Arm did not respond to our questions.

In September, Nasdaq valued Arm at $55bn. When it announced in March that it would list in New York it stated it “intends to consider an additional UK listing in due time”.

Reforms by the FCA are being implemented amid fears that London’s position as one of world’s leading financial centres may be under threat.

On Tuesday, the City’s reputation took another hit after business leaders warned that it was losing its appeal.

According to a new study, more than four fifths (45%) of UK chief executives think that the value of belonging to the London Stock Exchange has decreased in the last year.

81pc said that the benefits of a UK Stock Market quote have diminished. 57pc believe the benefits will continue to diminish in the next year. One third of those interviewed have thought about moving their listing from London to another country.

Teneo, a consultancy that conducts an annual survey among business leaders, has revealed the results of its annual survey. The findings will raise concerns over the future of London’s capital amid the rapid decline of the UK stock exchange.

Peel Hunt analysts have warned the London Stock Exchange that it has fallen into a “doomsday loop” due to a shrinking pool UK stocks and the high number of British companies which have been taken over by foreign or private equity-backed acquisitions. The number of UK listed companies has dropped by 40% since 2008.

The London-listed Kin and Carta consultancy accepted a £239m bid on Tuesday from a firm backed by BC Partners.