City Minister: Tax Regime 'Sends a Message' to Fintech IPO Prospects
City Minister Lucy Rigby has declared that the UK's tax regime critically influences its ability to attract fintech companies for initial public offerings (IPOs), as the government intensifies efforts to secure the next wave of listing candidates. Rigby, serving as economic secretary to the Treasury, emphasized that tax policy "matters" for strengthening capital markets and sending a clear signal to firms considering public listings.
Tax Incentives and Stamp Duty Measures
Rigby highlighted the stamp duty reform announced in the Autumn Budget, which eliminates the 0.5 percent rate for investors purchasing shares in newly-listed companies during their first three years post-IPO. However, earlier reports from City AM revealed that leading fintech unicorns remain unconvinced, warning that this overhaul alone may not suffice to persuade them to list in London.
"I totally recognize the importance of tax and how it sends a message for those mulling which public market they will head to," Rigby stated during a panel at Innovate Finance's Global Fintech Summit in London's Square Mile. She added, "This is about a direction of travel and is really, really important because we want to further build and ensure capital flows into growth-driving sectors."
Concerns Over London's Appeal
Anxieties about top fintech firms bypassing London have escalated over the past year, particularly after Wise relocated its primary listing from the City to New York. Access to capital and tax incentives continue to dominate discussions as the Treasury actively courts companies deemed ready for public offerings.
Treasury Unveils Stablecoin and Digital Market Push
Concurrent with Rigby's remarks, the Treasury introduced a comprehensive package aimed at bolstering the fintech ecosystem. The government plans to advance legislation reducing administrative burdens for companies offering stablecoin payments, targeting a share of the rapidly expanding digital assets market.
This move follows the Bank of England's softened stance on stablecoins last year, after earlier calls to "publicly walk back" due to fears the UK was lagging in this arena. Rigby also outlined proposals for a "single, coherent framework" for tokenised payments, a security process replacing sensitive data with valueless alphanumeric tokens to prevent theft.
Appointment of Digital Markets Champion
The Treasury announced Chris Woolard, former EY partner and interim chief executive of the Financial Conduct Authority, as its Wholesale Digital Markets Champion. Woolard will spearhead efforts to create a more efficient and competitive financial sector by developing a tokenised wholesale financial markets system.
"Today's package is our latest stake in the ground as we build a payments ecosystem that is secure, competitive, and fully equipped to harness opportunities from rapid technological change," Rigby concluded, underscoring the government's commitment to positioning London as a global fintech hub.
