In 2025, the UK stands at a pivotal juncture in its capital markets evolution. Groundbreaking reforms inspired by voices like Mark Austin and Ron Kalifa are transforming the landscape—making London once again a premier hub for IPOs and growth companies.
1. Why UK IPOs Need a Boost in 2025
London’s equity markets have struggled in recent years. In the first half of 2025, only nine new listings launched down 64% from the previous year. Notably, high-growth fintech firms like Wise and Ashtead have opted for New York listings, citing ongoing barriers—including time-limited dual-class shares and stamp duty.
These trends underscore a widening scale-up financing gap in the UK. Many promising businesses can’t access deep liquidity or capital. London risks losing out on high‑growth pipelines, unless reforms deepen and accelerate.
2. Austin & Kalifa Reviews: The Driving Force
- Mark Austin, co-founder of the Capital Markets Industry Taskforce, has been a vocal advocate for reform—calling for permanent dual-class share structures and simplified listing regimes.
- Ron Kalifa, in his 2021 fintech review, highlighted the regulatory hurdles slowing IPOs and called for listing-rule modernization to support capital growth.
Together, their insights shape a reform trajectory aimed at fixing issues like IPO eligibility, investor access, and long-term attractiveness.
3. Simplified Listing Rules & IPO Eligibility Requirements
July 2024 marked a key milestone: the FCA implemented new UK Listing Rules (UKLRs), consolidating premium and standard listings into one category and dropping burdensome revenue and track record requirements. Now, companies can list with:
- No three‑year revenue test
- No working‑capital statement
- No historical financials for acquisitions
These simplified listing rules broaden IPO eligibility requirements—enabling firms, including early-stage and scale-ups, to access public markets.
4. Dual-Class Share Sunset Clauses
One long-discussed deterrent for founders was London’s dual-class share sunset clause, which required special voting rights to expire after a fixed period. Though recent reforms have temporarily relaxed this, many firms seek permanence.
Austin’s Taskforce emphasizes making dual-class permanent to keep founder-led tech firms in London. This, in turn, reduces flight risk among unicorns and scale-ups.
5. ELTIF 2.0 Reforms: Unlocking Institutional Capital
The European Long-Term Investment Fund (ELTIF) 2.0 reforms—coming into play in 2025—are significant for UK investors. These changes widen the asset classes and investor base eligible for ELTIFs, improving pension and insurance fund access to long‑term capital, including private equity and venture capital backing.
While ELTIF is EU-driven, the UK is moving in a parallel direction. The FCA is consulting on a consolidated tape, retail investment reforms, and instruments like PISCES (Private intermittent Securities and Capital Exchange System), opening private-market liquidity to a broader investor pool.
6. Scale-Up Financing Gap & Venture Capital Backing
Despite venture rebound, UK firms still face a scale-up financing gap—a mismatch in available funding between early-stage VC and later-stage public markets. Chambers’ 2025 VC report highlights increased seed funding, yet many scale-ups struggle to exit via IPOs.
Reforms like simplified listing, dual-class permanency, ELTIF 2.0, and development of hybrid wheat IPOs (see below) aim to bridge this gap—bringing venture capital-backed firms onto public markets.
7. Secondary Trading Mechanisms & Liquidity for SMEs
Liquidity is vital—not just initial capital. Tools such as secondary trading mechanisms like PISCES and possible hybrid wheat IPOs enable early investors to exit while bringing in new capital. PISCES, proposed by the FCA in March 2025, allows private shareholders to sell stakes—providing flexibility and encouraging SME growth.
8. Hybrid Wheat IPO: A New Model
The concept of a hybrid wheat IPO—combining private and public capital—emerged in 2025 dialogues. It allows partial floatation and ongoing private investment alongside public market participation. Governments and platforms like PISCES could pilot this to help scale-ups gradually transition to the public.
9. ELTIF 2.0 + Hybrid IPO + Venture Capital = Bankable Pipeline
Together, these reforms–ELTIF 2.0, PISCES, simplified listing rules, dual-class permanence, and new IPO mechanisms—create a seamless pipeline:
- Venture capital backs scale-ups
- Hybrid or direct listings allow growth
- Secondary trading enhances liquidity
- Institutional capital via ELTIF boosts depth
This addresses both IPO eligibility requirements and the scale‑up financing gap, positioning the UK as a VC-financial-superpower.
10. Secondary Bond Structures & Retail Liquidity
The FCA’s July 2025 reforms simplify bond and equity prospectuses. Companies issuing less than 75% of existing share capital now skip detailed prospectuses; bond prospectuses are halved; public-offer platforms enable £5M+ raises without heavy paperwork.
These measures democratize investment access for retail savers and support liquidity options for SMEs—a win across capital markets strata.
11. Attractiveness: Austin/Kalifa Today
Mark Austin notes that despite some firms listing abroad, London still presents an attractive destination—particularly if reforms accelerate. Likewise, the Kalifa Review underpins support for fintech IPOs and scale-up transparency.
The UK is blending high governance standards with agility:
- Single listing rules
- Flexible dual class
- Streamlined prospectuses
- New secondary platforms
All under a long-term strategy fueled by venture capital backing and institutional investment.
12. Questions Remaining & Risks Ahead
Despite momentum, challenges remain:
- The scale‑up financing gap still requires funding depth
- Institutional adoption of ELTIFs depends on pensions strategy
- Retail confidence hinges on fee structure, tax incentives (e.g., potential stamp duty removal)
- US listings narrative still powerful—Wise and Ashtead illustrate flight risk
13. How Insights UK Can Help You
At this critical moment, Insights UK is here to support businesses, investors, and advisors with market entry, listing readiness, and capital strategy. Here’s how we can assist:
- Listing readiness assessment: Review eligibility under simplified rules, dual-class clause, track record
- IPO roadmap design: Chart step-by-step listing strategy—direct, hybrid, or via platforms like PISCES
- Investor-network activation: Connect businesses to ELTIF/VC investors, pension fund channels, and institutional vehicles
- Govt liaison: Navigate regulatory frameworks and upcoming FCA/tax consultations
- Secondary liquidity planning: Plan for shareholder transition using hybrid IPO or PISCES
By leveraging Insights UK’s tailored support, your business can confidently capture the upside of this reform wave.
FAQs
1. What are the key Capital Markets Union reforms impacting UK IPO attractiveness in 2025?
These include the ELTIF 2.0 reforms (expanding long‑term investment vehicles), simplified listing rules, relaxing dual-class share sunset clauses, updated IPO eligibility requirements, and the establishment of secondary trading mechanisms such as PISCES—collectively making public listings more accessible and appealing to scale-up firms.
2. What do simplify listing rules mean for UK companies?
In July 2024, the FCA merged premium and standard listings into one category by simplifying listing rules, removing stringent revenue, track record, and working-capital disclosure requirements. This expansion of IPO eligibility requirements allows earlier-stage and high-growth companies to list more easily.
3. How have dual‑class sharing sunset clauses been reformed?
UK reforms have softened previous sunset clause rules. The dual class share sunset clauses are now optional or significantly extended, enabling founders and venture capital investors to maintain control timelines that align better with growth objectives.
4. What is ELTIF 2.0 and how will it support UK scaling businesses?
ELTIF 2.0 reforms broaden permit eligible assets and investor participation—pension and insurance funds—to invest in long-term vehicles. Though EU-driven, the UK aligns with these reforms and introduces alternatives like PISCES to channel venture capital backing and institutional capital into SMEs.
5. What trading improvements support liquidity options for SMEs?
New secondary trading mechanisms such as PISCES allow private company shares to transact on regulated platforms, making liquidity options for SMEs more viable. Additionally, raising the prospectus threshold from 20% to 75% of capital allows smaller capital raises without full disclosure—streamlining access.
6. What is a hybrid wheat IPO, and how does it work?
A hybrid wheat IPO mixes public and private investment by listing only a portion of shares while retaining private capital and investor support behind the scenes. This structure addresses both fundraising and scale-up financing gap issues, offering flexibility for expansion before a full public exit.
7. How do Austin and Kalifa recommendations complement these reforms?
The Austin/Kalifa reviews serve as reform blueprints: Austin champions permanent dual-class structures and agile listing regimes, while Kalifa advocates for fintech readiness and streamlined IPO eligibility requirements. Together, they frame the regulatory approach revitalizing London’s capital markets.
