Stock Exchange plays down regulation fears

The London Stock Exchange has downplayed fears that increasing regulation is
chasing businesses away from the public markets and forcing groups to consider
private equity.

Last week in a report by KPMG, The Pressure of Regulation on
Business, leading commentators, including Paul Boyle, chief executive of
the Financial Reporting Council, and former GlaxoSmithKline CFO John Coombe,
both expressed fears that the tightening regulatory noose was having the
damaging effect of discouraging groups from pursuing a listing.

Boyle said the balance between investor protection and delivering profits
‘may have been overstepped’ and warned that this was ‘driving people off the
public markets’, while Coombe warned ‘people are going off to private equity and
hedge funds’.

However, a spokesman for the LSE, which saw turnover for the first quarter of
the current financial year increase 13% to £67.7m, said there were no
indications that tighter regulations were having an effect on the Exchange’s
business.

‘We are eager to maintain our competitiveness, but I don’t think we have been
compromised considering the successful number of listings over the past year,’
he said.

Bridgewell Securities analyst Katrina Preston said there was ‘little
evidence’ that regulation was affecting the LSE’s performance.