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Forcing UK pension funds to invest in British stocks is \u201cunnecessary\u201d and tax breaks should instead be used to encourage domestic investment in public markets, the London Stock Exchange Group\u2019s chief executive has said.<\/p>\n
The UK is struggling to attract companies to its main stock market, with fundraising from new listings falling to a 30-year low<\/a>. It is also grappling with a string of businesses seeking to float or move their listings to the US, leading the government, regulators and investors to fret about the City of London\u2019s attractiveness. <\/p>\n Westminster is seeking to reform pension rules to encourage large pools of capital to invest in domestic equities. Rachel Reeves, the UK chancellor, has sought to force pension funds to invest in UK companies<\/a>, a move seen as highly contentious by investors.\u00a0<\/p>\n \u201cWe are not pushing for mandation,\u201d LSEG chief David Schwimmer<\/a> said as the group reported its earnings on Thursday. \u201cIt\u2019s very important to take a look at the fact that the pension funds get about \u00a349bn a year in tax incentives,\u201d he added.\u00a0<\/p>\n Making those tax benefits conditional on pension funds putting a minimum percentage of their assets into UK investments \u201cwould seem to be very, very reasonable\u201d, Schwimmer said.<\/p>\n LSEG makes most of its revenues from its data and analytics business, which involves selling access to financial data to customers, including banks, brokers and asset managers. It grew into a financial data giant following its $27bn purchase of data group Refinitiv in 2019.\u00a0<\/p>\n Despite this, the London Stock Exchange remains at the heart of the City and is a barometer for the health of the UK\u2019s capital markets.\u00a0<\/p>\n \u201cWe work both with potential listings and also we work very closely with the companies that are already listed here in terms of different events, different services that we provide to them,\u201d Schwimmer said, defending LSEG\u2019s commitment to initial public offerings. \u201cThe London market has had a number of very positive, healthy reforms over the last few years,\u201d he said, adding that multiple companies were lining up to float in London soon.\u00a0<\/p>\n Business bank Shawbrook is planning to list in the UK<\/a>, while insurer CFC is also weighing an IPO, the Financial Times has previously reported.<\/p>\n This week, Wise shareholders voted to shift the fintech\u2019s primary listing from London to New York<\/a>, becoming the latest company to do so. <\/p>\n Revenues at LSEG rose 7.8 per cent to \u00a34.49bn in the first six months of the year, exceeding analysts\u2019 expectations. The company made just \u00a3205mn from its equities division over the same period, or 4.6 per cent of its overall revenues.\u00a0<\/p>\n LSEG also announced a \u00a31bn share buyback on Thursday.\u00a0Its shares fell about 4 per cent in morning trading. <\/p>\n