A group of influential City executives is pressing ahead with ambitious plans to create a new stock exchange that would compete directly with the London Stock Exchange, according to sources familiar with the matter.
The Driving Force Behind the New Market
The initiative is being spearheaded by several prominent financial figures, including Xavier Rolet, the former chief executive of the London Stock Exchange Group. Rolet, who led the LSE for nearly a decade until 2017, brings substantial experience in exchange operations and market structure.
Other key figures involved in the project include Jonathan Hausman, head of strategy at the Ontario Teachers' Pension Plan, and Paddy Dear, a former executive at the trading firm Citadel Securities. The consortium has engaged the services of City law firm Travers Smith to provide legal counsel on the ambitious undertaking.
The project has been in development for several months, with initial discussions beginning earlier this year. The timing reflects growing concerns among market participants about the declining competitiveness of UK public markets and the need for structural reforms to attract and retain high-growth companies.
Addressing Market Challenges
The proposed exchange aims to tackle several persistent issues that have plagued London's capital markets in recent years. These include the steady decline in the number of publicly listed companies in the UK, which has fallen by approximately 40% since its peak in 2008.
Another key concern is the trend of companies opting for private ownership rather than pursuing public listings. The new market would seek to reverse this by offering more attractive listing conditions and reduced regulatory burdens for companies considering going public.
The initiative comes at a critical juncture for London's financial services sector, which has faced challenges following Brexit and increased competition from European financial centres such as Paris and Amsterdam.
Competitive Landscape and Next Steps
The London Stock Exchange Group currently dominates UK equity trading through its main market and AIM, its junior market for smaller companies. The proposed new exchange would represent the first significant challenge to the LSE's dominance in recent years.
While details remain confidential, sources indicate that the project has gained traction among institutional investors and market participants who believe increased competition could benefit the entire ecosystem.
The consortium faces significant hurdles, including securing regulatory approvals from the Financial Conduct Authority and building the necessary technological infrastructure to support trading operations. However, the involvement of experienced market operators suggests the project has serious intentions.
Market observers will be watching closely to see whether this initiative can gather sufficient support from both companies seeking listings and the investment community to become a viable competitor in the UK's financial landscape.
