Recent reforms in the UK equity markets are driving changes, says FCA chair Ashley Alder.
- In a prominent speech, Alder highlighted significant reforms impacting the UK’s public equity markets.
- He emphasised the critical need to channel household savings into local businesses.
- UK household stock ownership has dramatically declined since 2003, noted Alder.
- Alder cited the UK’s market capitalisation as significant, likening it to 100% of GDP.
In a keynote address at the International Capital Markets Conference, Financial Conduct Authority (FCA) chair Ashley Alder noted that recent reforms in the UK equity markets are having a tangible effect. His comments underscored the significance of these reforms, which he described as the most vital changes in a generation for the UK’s public equity markets.
However, Alder pointed to a pressing issue: the need to redirect the savings of UK households into domestic businesses remains a significant challenge. This task, he argued, is even tougher than implementing the aforementioned reforms.
Citing statistics from the think-tank New Financial, Alder highlighted a worrying trend. The proportion of UK households that directly own stocks and shares has plummeted from 23% to a mere 11% between 2003 and 2022, indicating a decline in direct retail investor engagement in the equity markets.
To further illustrate the scale and scope of the UK’s financial landscape, Alder remarked that the country’s market capitalisation is currently valued at approximately $3.2 trillion, which is equivalent to the entire gross domestic product of the nation. This comparison highlights the robust and substantial nature of the UK’s financial markets.
In summary, while the UK’s markets see progressive reform, increasing retail investor participation remains crucial.
