The U.K.’s Financial Services Authority is expected to propose new rules within the next few months that will make it easier for private equity firms to float in London. The proposal would replace current regulations that prevent firms that list in London from controlling firms in which they invest. That, according to Reuters, would attract some top U.S. private equity firms to London, rather than to elsewhere in Europe, such as Amsterdam, where Kohlberg Kravis Roberts recently took its $5 billion initial public offering. “We hope these measures will help London to maintain its position as the prime center for raising capital in Europe, the FSA’s Hector Sants said in a statement. At the same time, the agency is studying what course of action it should take regarding contracts for difference. Industry groups have called on the regulator to adopt rules to better monitor holders of derivative positions, such as hedge funds. Reuters says the FSA is mulling three options: leave things status quo; introduce new regulations that would cover cases where banks vote stock according to the wishes of CFD holders; or order the disclosure of economic interests in shares held by CFDs. The fear is that without tighter control, hedge funds would acquire a larges stake in a company without being noticed at first.
