UK Equity Markets (Competitiveness)

Vince Cable Excerpts

Wednesday 22nd June 2011 Written Statements

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

My Department published a call for evidence in October 2010 entitled “A long-term focus for corporate Britain”. The call for evidence responded to concerns that capital markets may be increasingly focused on the short-term to the detriment of long-term sustainable growth in the UK. The response to the call for evidence made it clear that, while the UK has strong equity markets, there is scope for improvement.

I have therefore invited Professor John Kay to carry out an independent review, which will examine investment in UK equity markets and its impact on the long-term performance and governance of UK quoted companies. This includes the actions of boards, shareholders and their agents; the impact of rules and practices; and the level of transparency and engagement in the investment chain. The review will also consider the impact of increasing fragmentation and internationalisation of UK share ownership. Professor Kay will be supported by an expert panel of investor and corporate practitioners.

I have placed copies of the terms of reference for the review in the Libraries of both Houses.