Backlash over plot to bend City rules in bid to woo Arm back to London

Plans to water down City rules to bring Arm Holdings back to the London market have provoked a backlash.

The Institute of Directors (IoD) said there was a ‘real danger’ in trying to rewrite the rulebook to lure specific firms such as the chip maker.

British officials are locked in last-ditch talks to bring Arm back to the UK in a float expected to value the company at around £50billion.

The Cambridge-based firm, which is the world’s leading specialist designer, yesterday revealed latest quarterly revenues of £620million, up 28 per cent on last year, as well as underlying profits of £374million.

It said its initial public offering (IPO) preparations were ‘well advanced’ and it ‘remains fully committed to listing in calendar 2023’ but gave no further details about the venue or timing of the float.

But some in the City fear that regulators are preparing to relax established stock market rules in order to lure Arm to London.

Roger Barker, director of policy and corporate governance at the IoD, said: ‘The UK regulatory authorities are demonstrating a worrying willingness to rewrite the listings rulebook as a means of luring business to London. 

There is a real danger in watering down established governance rules in order to win transactions. It undermines the integrity of both the rules themselves and the UK’s wider governance framework.

In the long term, good corporate governance is best served by the consistent and fair application of sensible listing rules that protect investors and other stakeholders.

‘The UK should not endanger its hard-won reputation for high governance standards by engaging in a regulatory race to the bottom.’

But one City source described the reported plans for watering down rules as ‘pretty weak beer’. 

Arm, whose chips underpin the global smartphone industry, was listed in London before being bought by Japan’s Softbank in 2016 for £24billion.

A plan to sell it to America’s Nvidia fell through amid scrutiny from regulators, prompting plans for it to return to public markets, with New York initially seen as being in pole position for the listing.