LSE refutes Hogg’s claims UKLA move will create “synergies”

Baroness Hogg

The London Stock Exchange (LSE) has refuted claims by Financial Reporting
Council (FRC) chairman Baroness Hogg that there could be benefits under a
proposed shakeup of city regulation.

Last week Lady Hogg told Accountancy Age
supported government plans to bring the UK Listing Authority under the
. She said the work of the UK Listing Authority chimes well with
the work of the Financial Reporting Review Panel (FRRP), which sits within the

“It’s a very good fit in that a lot of [the UKLA’s] work has synergies with
the work of the FRRP. The FRRP is looking at accounts and, in a way, what
companies put to markets in their prospectuses, the follow on is what happens in
their accounts a year or two later,” she said.

The UKLA enforces transparency, listing and prospectus rules for London’s
listed companies, while the FRRP overseas the integrity of published accounts.

Lucy Leroy, head of UK primary market regulation at the LSE, took aim at Lady
Hogg’s comments yesterday and argued the FRRP was not well equipped to
scrutinise forward-looking documents like prospectuses.

“They are not substantive synergies,” she said.

“IPO documents are different to historical accounts – they focus on forward
looking information.”

The LSE instead would prefer the UKLA be absorbed within the proposed
Consumer Protection and Markets Authority (CPMA).

“There are greater and more natural syngergies with the markets division of
the new CPMA,” she said.

The UKLA’s proposed relocation will split the UK’s primary and secondary
markets which the LSE believe will impede effective market regulation and damage
the city’s competitiveness. Leroy believes the UKLA, under the FRC, would not
react with the immediacy required by modern markets.

“We need to move with the cycle. Part of the concern is markets change quite
quickly,” she said.

“The regulator needs to be strong and to be able to respond to those issues

Leroy’s comments come a day after the Institute of Directors questioned the
“logic” of the government move.

Miles Templeman, director-general of the IoD,
City A.M
it made no “sense to leave the UKLA separate from the
CPMA responsible for the regulation and supervision of wholesale capital

Government’s consultation closes October 18.

Further reading:

chief lends support to proposed UKLA move

chief sees no “rapid change” to auditor liability rules

new approach to financial regulation: judgement, focus and stability

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