In a sharply worded ThinkPiece titled “LSE Secondary Listings: Under a Jaded Eye”, Christopher Ecclestone of Hallgarten + Company argues that London’s efforts to revive its attractiveness for secondary listings, particularly in mining, are falling painfully short. While investor enthusiasm in mining has surged, driven by strong precious metals prices and heightened demand for base metals linked to industrial-military applications, the London Stock Exchange (LSE) seems oblivious, imposing ever-more restrictive rules that effectively shut out smaller companies.
Ecclestone highlights that recent attempts by the LSE and FCA to simplify and attract secondary listings have ironically produced the opposite result. He describes London’s market for secondary listings as a “financial Gobi Desert,” emphasizing how the new category, named “International Category,” imposes a minimum £30 million market capitalization—excluding roughly 90% of potential mining candidates.
One of the most contentious hurdles Ecclestone identifies is the compulsory prospectus requirement. Previously, secondary listings not involving immediate capital raises enjoyed less bureaucratic oversight. The new regulations, however, mandate prospectuses even without financing activities, resulting in expensive legal and accounting obligations. This requirement acts as a significant deterrent, particularly for smaller companies whose budgets are tight, and management resources limited.
Furthermore, Ecclestone criticizes London’s regulatory rigidity regarding corporate structure and jurisdictional requirements, arguing these rules disproportionately impact mining firms that typically operate multinationally. For instance, he points out that companies like Alphamin Resources Corp. (TSXV: AFM), a major Western tin miner, would find their listings “killed dead” due to complex management structures spread across multiple jurisdictions.
Ecclestone concludes that these regulatory developments underscore a disturbing trend: the LSE’s ongoing neglect of small investors and smaller companies, catering instead exclusively to larger entities and powerful investment banks. This, he argues, undermines London’s historical legacy and strengths in mining finance, particularly its deep knowledge of markets such as Africa and the ex-CIS region.
As London continues its self-defeating approach, Ecclestone warns, the city’s once-prestigious capital markets risk further erosion. Investors and companies alike may increasingly look elsewhere, leaving the LSE struggling for relevance on the global stage. To read the complete Hallgarten + Company Thinkpiece titled “LSE Secondary Listings: Under a Jaded Eye”, click here
Leave a Reply