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The new City minister will on Thursday hail the government’s ambition to orchestrate a “renaissance” of London’s capital markets as he unveils fresh details of proposals for a new platform that will allow investors in private companies to trade shares.
Sky News has learnt that Bim Afolami, who replaced Andrew Griffith as economic secretary to the Treasury in November, will use a speech on Thursday to reiterate the government’s determination to press ahead with its financial services regulatory reform agenda ahead of the next general election.
Sources said on Wednesday that Mr Afolami was expected to disclose that a new intermittent trading venue (ITV) pledged as part of last year’s Mansion House reforms would be called Pisces.
One leading City executive said that establishing a robust ITV would represent a major step forward for London’s capital markets by familiarising larger private companies with the idea of trading their equity and ultimately encouraging more of them to go public in the UK.
The City watchdog has backed the plan, saying last September that it would “broaden access to institutional liquidity while expanding the investment opportunities for private companies and their shareholders”.
Executives from London Stock Exchange Group have also signalled their enthusiasm for its creation.
“I want to be clear that capital markets play a key role in the UK economy,” Mr Afolami, himself a former City executive, is expected to say on Thursday.
“By allocating capital – facilitating investment, growth and job creation – they create investor returns.
“All of this drives activity across the economy.”
The new minister’s speech will come during a period when the attractiveness of the City as a financial centre has become the subject of increasingly intense debate.
Some blue-chip British-based companies, such as the semiconductor designer Arm Holdings, have opted to float in the US, while a growing number of London-listed companies, including Flutter Entertainment, have pursued New York listings.
Speaking at the headquarters of Bloomberg, the financial data and media group, Mr Afolami will say that Britain’s economy will benefit from a more balanced approach to risk-taking in the financial sector.
“Our approach to capital markets must carefully balance appropriate regulation with investors’ appetite for risk, and our post 2008 approach has focused too much on the former and not enough on the latter,” he will say.
“It is only through measured and purposeful risk taking that we can deliver progress, economic growth and a capital markets renaissance.”
The government has announced two principal packages of measures since Jeremy Hunt became chancellor.
Dubbed the Edinburgh Reforms and Mansion House Reforms, they included moves to bolster pension fund investment in British companies as well as proposals aimed at reinvigorating the culture of retail investing.
“The result of these reforms is that after three-and-a-half years we are now within sight of making the UK’s public markets match-fit again.
“But… we must go further to fully deliver on the promise of our capital markets.”
Mr Afolami is said by officials to be focused on delivering a successful retail offering of NatWest Group shares later this year, following an announcement in Mr Hunt’s autumn statement that the Treasury would look to undertake such a sale this year.
The government will have a relatively narrow window to organise a deal, which it hopes will invoke the retail investing culture created by the Thatcherite privatisations of the 1980s.
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