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Abu Dhabi, UAETuesday 25 September 2018

London Stock Exchange head backs rule change to lure Saudi float

Xavier Rolet says rules have to be updated
 

The London Stock Exchange boss has supported a proposed rule change. AFP PHOTO/Shaun Curry
The London Stock Exchange boss has supported a proposed rule change. AFP PHOTO/Shaun Curry

The London Stock Exchange boss has supported a proposed rule change aimed at luring Saudi Aramco’s $2 trillion oil mega-float to the UK’s capital.

The UK’s Financial Conduct Authority (FCA) has proposed watering down listing rules for sovereign-controlled entities. Some believe this will help the Saudis to come to London.

Although Xavier Rolet, the 57-year-old chief executive, declined to comment on Saudi Aramco and a possible float explicitly, he clarified that all the rule changes were in the hands of the City regulator.

He said: “We need to adjust to reality and that’s all that’s happening”.

“I’m not sure why there’s so much focus on this particular point. It should be a surprise to no one if listing rules are from time to time refreshed by the regulators to take into account the reality we live in,” he added.

The Institute of Directors and pension fund manager Royal London criticised the plans, arguing governance standards will be damaged if London helps Saudi Aramco list 5% of the company on the stock market.

Many believe 25% of shares must be listed to meet governance rules but Mr Rolet said that is not the case. Instead there is a liquidity test.

Mr Rolet and Prime Minister Theresa May travelled to Saudi Arabia earlier this year.

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