UK to ease rules for tech IPOs

The UK government is trying to make it easier for high-growth companies to launch initial public offerings in London as part of its strategy aimed at making the city Europe's high-tech capital. Investors though, even as they welcomed the move said they would not be necessarily persuaded to recommend companies to float in London.

Proposals cover a planned new route to the UK IPO market for high-growth companies, which are likely to feature reformed rules on free float, eligibility criteria and reporting requirements.

Meant to work as a ''launch pad'' for companies seeking a full premium listing, the move was aimed at attracting mid-sized, high-growth European businesses that are currently underrepresented on UK exchanges.

Further detailing the proposal, David Willetts, the minister for universities and science, said the government had looked at US president Barack Obama's Jumpstart Our Business (JOBS) Act to see what lessons London could learn. JOBS Act, is a bill aimed at making it easier for startups and small businesses to raise funds, especially through online crowdfunding.

Crowdfunding refers to the collective effort of individuals who network and pool their resources, usually via the internet, to support efforts initiated by other people or organisations.

Willettssaid from the London meeting of Seedcamp, Europe's leading micro-seed investment fund and mentoring programme that some of the regulations in the London financial markets did not work well for tech start-ups.