The UK is changing its listing rules to attract high-growth companies. These reforms aim to make the market more appealing while ensuring investor protection. Shein, the fast-fashion retailer valued at $66 billion, plans to list on the London Stock Exchange (LSE) by mid-2025. This move highlights the opportunities and challenges of these regulatory changes.
The UK has simplified its listing rules by merging premium and standard segments into one, lowering public share requirements, and increasing transparency for listed companies. These reforms, introduced by the Financial Conduct Authority (FCA), are intended to support a broader range of companies in raising capital on UK exchanges. For Shein, this represents a chance to secure a strategic foothold after abandoning plans for a US listing due to regulatory scrutiny.
Shein’s prospective IPO, however, faces significant governance and compliance challenges. Allegations over its supply chain, including the use of cotton from China’s Xinjiang region, have led UK lawmakers to call for a detailed review before the company is allowed to list. The FCA is already extending its review process to examine Shein’s governance practices and assess potential legal risks. This reflects the regulator’s commitment to upholding market integrity and ensuring transparency from listed companies.
Questions have also been raised about Shein’s impact on the UK fashion industry. The British Fashion Council has expressed concerns about how the listing might affect ethical practices and has urged the government to support fair competition. These issues, combined with past criticism of Shein for failing to disclose its ultimate beneficial owner in the UK, highlight the growing importance of transparency in corporate governance.
For companies aiming to list in the UK, Shein’s situation provides some lessons. Companies should conduct thorough due diligence, especially in supply chain management, to meet governance expectations in addition to legal and regulatory requirements. They need to be transparent, fully disclosing ownership and operations to comply with legal and regulatory standards. The FCA’s scrutiny of Shein highlights the importance of adhering to these rules.
The UK’s listing reforms aim to balance market accessibility with strong governance standards. Shein’s IPO plans demonstrate the importance of meeting these standards while navigating the opportunities these reforms create. Robust governance and transparency are no longer optional—they are central to gaining market trust and securing investor confidence. And if a company has decided not to list somewhere else because it has concerns about regulatory scrutiny, then the UK, with its strong governance standards, is unlikely to be a softer touch.
