By Charlie Conchie
Ministers must keep the “continuity” and “momentum” behind capital markets reform in order to cement the UK’s standing as a global financial powerhouse, the author of a major government-commissioned review of fintech has warned.
Ron Kalifa, who masterminded the Kalifa Review of UK Fintech in 2021, said that pushing through the recommendations of his review and those of the UK’s listing and secondary markets reviews, conducted by Lord Jonathan Hill and Freshfields lawyer Mark Austin respectively, should remain firmly on the agenda for newly-appointed prime minister and Chancellor Kwasi Kwarteng.
“Keeping the gravity, continuity and momentum behind reform will be key, and government needs to continue to really use its convening power to drive change across the capital markets,” Kalifa told City A.M. in an interview.
“Making sure private and public markets are better connected will be crucial, and ensuring there are research and tax policies to support that”.
The comments come after City A.M. revealed in April that Kalifa had written to then-City minister John Glen outlining a number of proposals to boost the landscape for firms looking to float and raise capital in the UK.
Among his recommendations were a review of the environment for corporate research designed to boost the depth and quality of investment analysis into UK firms, as well as changing tax rules to stop firms from reaping early-stage tax breaks before heading overseas to go public.
Kalifa toldCity A.M. that while there “haven’t been any outcomes” to the letter, the recommendations will be “swept up” as part of Mark Austin’s Secondary Capital Raising Review, published in July.
The recommendations of his own fintech review published in February 2021 were “well in train and being delivered”, he added.
Under former Chancellor Rishi Sunak, the Treasury sponsored a number of reviews in a bid to maintain the UK’s status as a hub of fintech innovation, and to tempt more high-growth firms to come to market in London.
Plans to promote the Capital as a home for tech have been struck a series of high profile blows in recent months however, as foreign firms continue their bargain-hunting raids on cheap London listed tech businesses, and domestic tech darlings look elsewhere to float.
London Stock Exchange officials and ministers have also been wrestling to land the listing of homegrown chipmaker Arm, which looks set for a primary listing in New York. The fight now hangs in the balance after the resignation of several key players leading negotiations with Arm’s owner, the Japanese investment giant SoftBank.
“Positive and hopeful”
Kalifa added that he was “actually quite positive and hopeful” over the prospects of both Truss and chancellor Kwasi Kwarteng, saying their track record towards reform in the UK fintech and financial sector had been strong.
“I’ve been in several meetings with the chancellor in his previous roles, where he has asked me to bring entrepreneurs to meet with him, and he has always been very engaged with and interested in innovation,” he said.
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