Are the UK’s Efforts to Revive Its Capital Market Doomed to Fail?
It has been a case of one step forward, two steps back for the London Stock Exchange. Despite ending last year with the large listing of Canal+ – the biggest since 2022 – the year as a whole saw the lowest number of listings since EY began keeping records in 2010.
Hopes that a more stable local policy after the election, a solid list of expected deals and reform to listing rules would bring better results in 2025 did not last long.
There were just five new listings on the London stock market in the first quarter, raising £74.7 million – only just over a quarter of what was raised in the same period last year. Worries over trade tariffs are holding back some companies from listing, and market conditions are not expected to improve much over the rest of the year.
In contrast, the US had its third-best first quarter on record, with 59 listings raising £8.9 billion.
Last month, Indivior confirmed that it would cancel its secondary listing on the London Stock Exchange in late July, and Shein is now expected to list in Hong Kong instead of London.
Last week, Metlen Energy & Metals announced it would move its main listing to London in early August – one of the few recent bits of good news.
Read more: London’s Fintech FOMO: Treasury Woos Revolut and Monzo for IPOs
The problem of European exchanges losing companies to US markets (and possible answers to this) has been a talking point for some time.
The UK
government’s response has included introducing the Private Intermittent
Securities and Capital Exchange System (PISCES) framework for buying and
selling private company shares, which will kick in his summer
As FinanceMagnates.com reported recently, IG has called for the UK to scrap stamp duty on share purchases as part of a plan to boost the London market. At the same time, the Private Intermittent Securities and Capital Exchange System (PISCES) framework for buying and selling private company shares is due to start this summer.
There is no denying that UK investors pay more tax than their European or US counterparts. But this is nothing new – the CEO of Interactive Investor made a similar plea last year – and a UK government lurching from one fiscal mishap to another is unlikely to introduce any policy that would further reduce its revenues.
Then there is the reality that the pools of capital available in Europe are not – and are unlikely ever to be – as deep as those in the US. Combine that with an investor base more focused on revenue and short-term returns than its US counterpart, and it becomes clear that European policymakers need to do more than make minor tweaks to their capital markets.
Faster Settlement to Speed Up Consolidation
A new report from Firebrand Research notes that the global move to shorten the settlement cycle is part of a broader review and change of the market infrastructure behind the world’s capital markets.
From a European viewpoint, one of the more interesting points is the chance of market consolidation as smaller firms may pool their resources to meet the investment demands of a shorter settlement cycle.
Larger firms have had the move to T+1 on their radar for some time, but there is still a lack of awareness and focus among some smaller firms. The US transition highlighted this gap – while bigger players were generally well prepared, many smaller firms and asset managers faced serious challenges, especially around automating key processes.
It could be said that T+1 is speeding up consolidation trends that were already in progress. The technology gap between firms that can spend $30–50 million each year and those that cannot is creating a clear split in the industry.
Read more: CySEC Informs Firms as EU Commission Targets T+1 Securities Settlement by 2027
Larger companies are always in a better position to seek efficiency, as they can spread the high cost of IT development pushed by rule changes across a wider client base. Smaller companies that face either lower efficiency or higher IT costs (leading to unhappy clients or lower profits) will likely consider working together or using outside services.
The industry needs to learn from the US experience, realising that smaller firms in Europe may need to share resources or work more closely with others to handle the demands of T+1.
Over time, financial markets have naturally gone through periods of consolidation. Meeting the needs of T+1 will require better openness and systems that can work together. Working with key market service providers will also become more important.
The cost of adapting to a shorter settlement cycle may also be a factor for firms thinking about a merger or sale. This may not be the main reason for market consolidation, but smaller managers looking at the best way to run their business in the next ten years will need to think about it carefully.
The US has already made the leap. Now, the EU, UK, and Switzerland are preparing to transition to T+1 settlement where trades are settled just one business day after execution. But this isn’t just about speed.
𝐒𝐨, 𝐰𝐡𝐲 𝐭𝐡𝐞 𝐝𝐞𝐥𝐚𝐲 𝐢𝐧 𝐄𝐮𝐫𝐨𝐩𝐞?
The complexities… pic.twitter.com/l3eOhZ5US3— Crisil Integral IQ (@CrisilIntIQ) June 30, 2025
Retail Investors Should Tread Carefully in Non-Public Markets
According to State Street, large investors expect a clear rise in retail investment into private markets over the next two years, with retail investors set to become the main source of fundraising in this space during that time.
Fund managers are starting to see the growth chance that retail clients offer. As rules already allow retail-focused structures to hold private assets, more investment managers are likely to offer these to retail clients in the near future.
Related: ESMA Is Curious About Retail Investors’ Habits
The Deloitte Center for Financial Services predicts that if current trends continue, retail investment in private capital will grow from $80 billion to $2.4 trillion in the US by 2030, and more than triple in the EU from €924 billion to €3.3 trillion.
SEC commissioner Hester Peirce is a strong supporter of making private markets more open to retail investors. At the same time, Eric Pan, head of the Investment Company Institute, has also asked for some limits to be eased.
This would be a good move for private markets, helping to increase capital flow into the sector. But retail investors need to be alert to issues such as limited liquidity, a lack of clear information in private credit funds, and varying rules in different regions.
One answer may be to create products built specifically for retail users, rather than simply copying what is used for institutions. One example might be a retirement fund that slowly shifts its mix over time, including private assets for those still far from retirement age.
Are the UK’s Efforts to Revive Its Capital Market Doomed to Fail?
It has been a case of one step forward, two steps back for the London Stock Exchange. Despite ending last year with the large listing of Canal+ – the biggest since 2022 – the year as a whole saw the lowest number of listings since EY began keeping records in 2010.
Hopes that a more stable local policy after the election, a solid list of expected deals and reform to listing rules would bring better results in 2025 did not last long.
There were just five new listings on the London stock market in the first quarter, raising £74.7 million – only just over a quarter of what was raised in the same period last year. Worries over trade tariffs are holding back some companies from listing, and market conditions are not expected to improve much over the rest of the year.
In contrast, the US had its third-best first quarter on record, with 59 listings raising £8.9 billion.
Last month, Indivior confirmed that it would cancel its secondary listing on the London Stock Exchange in late July, and Shein is now expected to list in Hong Kong instead of London.
Last week, Metlen Energy & Metals announced it would move its main listing to London in early August – one of the few recent bits of good news.
Read more: London’s Fintech FOMO: Treasury Woos Revolut and Monzo for IPOs
The problem of European exchanges losing companies to US markets (and possible answers to this) has been a talking point for some time.
The UK
government’s response has included introducing the Private Intermittent
Securities and Capital Exchange System (PISCES) framework for buying and
selling private company shares, which will kick in his summer
As FinanceMagnates.com reported recently, IG has called for the UK to scrap stamp duty on share purchases as part of a plan to boost the London market. At the same time, the Private Intermittent Securities and Capital Exchange System (PISCES) framework for buying and selling private company shares is due to start this summer.
There is no denying that UK investors pay more tax than their European or US counterparts. But this is nothing new – the CEO of Interactive Investor made a similar plea last year – and a UK government lurching from one fiscal mishap to another is unlikely to introduce any policy that would further reduce its revenues.
Then there is the reality that the pools of capital available in Europe are not – and are unlikely ever to be – as deep as those in the US. Combine that with an investor base more focused on revenue and short-term returns than its US counterpart, and it becomes clear that European policymakers need to do more than make minor tweaks to their capital markets.
Faster Settlement to Speed Up Consolidation
A new report from Firebrand Research notes that the global move to shorten the settlement cycle is part of a broader review and change of the market infrastructure behind the world’s capital markets.
From a European viewpoint, one of the more interesting points is the chance of market consolidation as smaller firms may pool their resources to meet the investment demands of a shorter settlement cycle.
Larger firms have had the move to T+1 on their radar for some time, but there is still a lack of awareness and focus among some smaller firms. The US transition highlighted this gap – while bigger players were generally well prepared, many smaller firms and asset managers faced serious challenges, especially around automating key processes.
It could be said that T+1 is speeding up consolidation trends that were already in progress. The technology gap between firms that can spend $30–50 million each year and those that cannot is creating a clear split in the industry.
Read more: CySEC Informs Firms as EU Commission Targets T+1 Securities Settlement by 2027
Larger companies are always in a better position to seek efficiency, as they can spread the high cost of IT development pushed by rule changes across a wider client base. Smaller companies that face either lower efficiency or higher IT costs (leading to unhappy clients or lower profits) will likely consider working together or using outside services.
The industry needs to learn from the US experience, realising that smaller firms in Europe may need to share resources or work more closely with others to handle the demands of T+1.
Over time, financial markets have naturally gone through periods of consolidation. Meeting the needs of T+1 will require better openness and systems that can work together. Working with key market service providers will also become more important.
The cost of adapting to a shorter settlement cycle may also be a factor for firms thinking about a merger or sale. This may not be the main reason for market consolidation, but smaller managers looking at the best way to run their business in the next ten years will need to think about it carefully.
The US has already made the leap. Now, the EU, UK, and Switzerland are preparing to transition to T+1 settlement where trades are settled just one business day after execution. But this isn’t just about speed.
𝐒𝐨, 𝐰𝐡𝐲 𝐭𝐡𝐞 𝐝𝐞𝐥𝐚𝐲 𝐢𝐧 𝐄𝐮𝐫𝐨𝐩𝐞?
The complexities… pic.twitter.com/l3eOhZ5US3— Crisil Integral IQ (@CrisilIntIQ) June 30, 2025
Retail Investors Should Tread Carefully in Non-Public Markets
According to State Street, large investors expect a clear rise in retail investment into private markets over the next two years, with retail investors set to become the main source of fundraising in this space during that time.
Fund managers are starting to see the growth chance that retail clients offer. As rules already allow retail-focused structures to hold private assets, more investment managers are likely to offer these to retail clients in the near future.
Related: ESMA Is Curious About Retail Investors’ Habits
The Deloitte Center for Financial Services predicts that if current trends continue, retail investment in private capital will grow from $80 billion to $2.4 trillion in the US by 2030, and more than triple in the EU from €924 billion to €3.3 trillion.
SEC commissioner Hester Peirce is a strong supporter of making private markets more open to retail investors. At the same time, Eric Pan, head of the Investment Company Institute, has also asked for some limits to be eased.
This would be a good move for private markets, helping to increase capital flow into the sector. But retail investors need to be alert to issues such as limited liquidity, a lack of clear information in private credit funds, and varying rules in different regions.
One answer may be to create products built specifically for retail users, rather than simply copying what is used for institutions. One example might be a retirement fund that slowly shifts its mix over time, including private assets for those still far from retirement age.
