It has been reported by the Wall Street Journal that The London Stock Exchange (LSE) has proposed a special market for private companies to trade shares publicly.
The proposal would give private companies access to public markets on certain days to trade their shares: between one and five days in each trading window, once a month or quarter, or every six months according to the report.
This would be an exciting new way for private companies to raise finance and would act as a stepping stone between private and public markets. Private companies could move to the public markets without facing the level of regulatory oversight that fully listed companies face.
Start-ups, as well as large companies, would be able to sell shares to retail and institutional investors.
The plan would need regulatory approval and changes to UK law, including the Companies Act 2006, which currently prohibits private companies from offering their shares to the public.
The proposals are part of a plan to attract more fast growing tech companies to the London market, according to the report by the Wall Street Journal.
We understand that, before the public trading periods, the private companies would need to give a "cleansing statement" disclosing material information, which is something DMH Stallard would be able to assist with, in view of its public markets experience.
DMH Stallard LLP is a highly regarded UK law firm and our Capital Markets Group is a key element of our Corporate Team. Our capital markets lawyers advise companies and their advisers in relation to pre-IPO structuring and fundraising, the listing process and transactions such as secondary fundraisings and mergers and acquisitions following listing. The companies and businesses coming to the London markets often have an international presence and we are experienced in the jurisdictional issues that have to be addressed and working with lawyers from outside the UK.