By contrast, the benchmark FTSE 100 Index, responding to investor complaints, is raising the minimum free float to 25 percent from 18.4 percent to qualify for inclusion in the index. Inclusion in the FTSE 100 generally benefits share price as some mutual funds are required to buy all the stocks in the index.
For investment banks, IPOs are among the most lucrative advisory businesses. They earned about $154 million in IPO underwriting fees in London in 2012, according to researcher Freeman & Co., about 53 percent from foreign companies. JPMorgan Chase & Co. is the top-ranked underwriter in the City this year, with estimated fees of $14 million, Freeman said.
“The FSA needs to be careful not to throw the baby out with the bathwater,” said Charles Jacobs, a partner at London law firm Linklaters LLP. “They need to strike the right balance between welcoming multinational companies and coming up with sensible measures that regulate but aren’t excessive.”