Press release: Decision not to implement EU settlement discipline regime in the UK good for small and mid-sized companies

25th June 2020

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The QCA welcomes the announcement from the Chancellor of the Exchequer Rishi Sunak MP that the new EU settlement discipline regime (the Central Securities Depositories Regulation (CSDR)) will not be implemented in the UK in 2021. 

The QCA has been working over many years to highlight the potential negative impact on liquidity in small & mid-cap securities that bringing this in would have caused. If implemented, its introduction would have had a seriously detrimental impact on the ability of smaller quoted companies to raise capital, as well as on the functioning of capital markets for SMEs in the UK.

As the UK’s departure from the European Union comes into full effect at the end of the year, there is scope for reshaping the UK’s public equity markets so that they work better for growth companies seeking long-term capital.


Tim Ward, CEO of the Quoted Companies Alliance:

“Growth companies on public markets have dodged a bullet that would have struck the heart of liquidity in the smallcap market. The Treasury, FCA and Bank of England deserve credit here for listening to the market and taking action. We look forward to helping the Government in reshaping the structure of the UK’s public equity markets so that they work better for small and mid-sized companies as we move forward.”

 

Philip Yarrow, CEO of Winterflood Securities and board member of the QCA:

“We welcome the Chancellor’s announcement that the settlement discipline regime will not be applied in the UK. We have been working with the QCA since 2012 to try and avoid the unintended consequences that this regime would undoubtedly have had on SME equity markets. We now have a great opportunity to custom design a growth market structure to help the businesses of Britain thrive over the long term.”

 

Steven Fine, CEO of Peel Hunt LLP and board member of the QCA:

“We are very pleased with the proactive and pragmatic decision to not implement CSDR in the UK. As a major liquidity provider to the UK retail market, this will allow us to maintain our full market presence, contribute to market stability, provide liquidity in all areas of the public markets and ensure markets remain open, orderly and transparent.”

 

Simon Fine, Co-CEO of Shore Capital Group Ltd:

"This is a very positive outcome for both quoted SMEs in the UK and the London market generally. Our markets are unique and liquid and this decision will protect them which is good news for the economy and our financial ecosystem. Maintaining and protecting our active growth markets is essential as we go through times of economic turbulence.”

 

-- ENDS --

Read more about CSDR and this decision here.

About the QCA
The Quoted Companies Alliance is the independent membership organisation that champions the interests of small to mid-size quoted companies. See more information about the QCA here.

There are around 1,250 small and mid-size quoted companies in the UK, representing 93% of all quoted companies. They employ approximately 3 million people, representing 11% of private sector employment in the UK, and contribute over £26bn in annual taxes. 

Contact
Anthony Robinson, Head of Policy & Communications, QCA, 07456686160, anthony.robinson@theqca.com

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