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A new review into the UK’s research and investment landscape
will formally kick off on Monday (13 March) - City Minister
is expected to
announce tomorrow in a speech at FIX trading
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Rachel Kent, senior partner in financial services at Hogan
Lovells, has been announced as chair of the Review.
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Move comes just weeks before Financial Services and Markets
Bill expected to receive Royal Assent – enabling us to
deliver more of the Edinburgh Reforms
The review, which was first announced as part of the government’s
Edinburgh Reforms, will formally kick off on Monday 13th March.
It seeks to develop concrete steps the government can take to
enhance London’s status as Europe’s leading listings destination,
and only second globally.
Rachel Kent, an expert and senior financial services partner at
leading global law firm Hogan Lovells, has been tasked by City
Minister MP with leading the
review, and has been asked to report within three months.
Speaking at the FIX trading conference, City Minister is expected to say:
Research matters - and the right depth and breadth of investment
research is vital to ensure markets operate well and companies
obtain the valuations they deserve.
I am therefore pleased to announce City expert, Hogan Lovells
Partner Rachel Kent, will spearhead the Investment Research
Review.
With her experience and knowledge of the sector, as well as the
regulatory framework, I have every confidence Rachel will do a
fantastic job at speedily convening the sector, looking at the
evidence and finding solutions to improve the UK market for
investment research.
I look forward to receiving her recommendations.
Investment research provides investors with information that
allows them to understand a company’s business model,
performance, and risks, and therefore to assess its value as an
investment.
Concerns have been raised about the quality and quantity of
investment research produced in the UK as compared to other
jurisdictions - particularly for certain sectors like tech and
life sciences - and that this could undermine valuations and
therefore the attractiveness of the UK as a place to list and
make it harder for companies to access private capital.
Through the review, the UK is seeking to identify and address
some of these concerns, to ensure London maintains its unique
attractiveness as a listing’s destination.
Attracting some of the largest companies in the world to list in
the UK supports a broader ecosystem providing high-skill, and
high-paying jobs for Brits up and down the country – widening
opportunity and increasing revenues for the public purse.
Addressing these issues will help to deliver on the government’s
plan to grow the economy and become a leading technology
superpower.
Further information
Past reviews by both Lord Hill and Ron Kalifa have argued there
is a perception that the US has a cluster of expert analysts – in
particular specialising in high growth sectors such as tech and
life sciences – which contributes to a valuation gap between the
US and the UK.
Some market participants and representative groups have
specifically pointed to the EU derived MiFID II unbundling rules
as a potential source of decline of investment research in the
UK. The review will seek evidence as to whether these rules
may have contributed to the decline in the quality and quantity
of UK research.
The review will also provide recommendations on how to improve
the research landscape in the UK with the aim of making London a
more attractive location for companies looking to list and access
private capital.
Rachel’s bio
Rachel is a senior partner in the financial services regulatory
team at Hogan Lovells. She has advised a number of the largest
banks, asset managers, insurers, and financial market
infrastructures on a variety of financial services issues. Rachel
is also a client relationship partner for the Government and
leads the work for HM Treasury following Hogan Lovell’s
appointment as their main legal advisor on financial services.
Alongside her main job, she sits on the TheCityUK’s International
Regulatory Strategy Group (IRSG) where she specialises on
international access and competitiveness.
Publications:
As Chair of the IRSG Brexit Working Group on international access
and competitiveness, Rachel was the lead author on three of their
post-Brexit reports.
In 2020 she drafted the Regulation chapter of HM Treasury’s
FinTech Strategic Review (‘FSR’) commissioned by Ron Kalifa.
Rachel regularly publishes papers on Hogan Lovells website about
regulatory reform, such as a legal explanation of the Edinburgh
Reforms package in December
