Rishi Sunak reveals fintech-inspired fast-track visa scheme in budget build-up

Programme aims to turbocharge Britain's economy and bolster regulation-hit financial industry

Rishi Sunak believes the 75,000-strong UK fintech sector serves as a model of the flexible economy he wants to create. Reuters

UK Finance Minister Rishi Sunak has unveiled a new fast-track visa scheme designed to boost Britain's Covid-hit economy.

He told the Financial Times in a pre-Budget interview on Friday that he wanted to "scale up" sectors such as fintech in a bid to attract talent from around the world.

The scheme is an endorsement of the government-backed Kalifa Review which said the UK should overhaul its stock listing rules and visa requirements to help the country’s fast-growing fintech industry compete after Brexit.

It also warned that Britain’s departure from the European Union gave Paris, Berlin and other cities “a window to capitalise on uncertain messaging” around immigration and other regulatory changes

“Without additional action, the UK risks having its market share eroded,” the review found.

The review was led by former Wordplay chief Ron Kalifa and is the first of several intended to aid Prime Minister Boris Johnson's government as it considers easing regulations on the financial industry. The UK's crown jewel was largely excluded from the British trade deal struck last year with the EU.

Mr Sunak believes the 75,000-strong UK fintech sector serves as a model of the flexible economy he wants to create.

“We want to be innovative, entrepreneurial, agile,” he told the Financial Times.

“We can do things differently after Brexit. We want to be open to the world, we want to be world class at things.”

The UK already invests heavily in fintech, which accounts for nearly half of venture capital investment in Europe with $4.1 billion in 2020, according to the trade group Innovate Finance.

Fintech contributes £7 billion ($10bn) a year to the UK economy with some of its darlings like Wise, Monzo and Revolut already attracting billion-dollar valuations.

And UK FinTech firm Paymentology expanded to the Middle East in October last year.

The Kalifa review of UK fintech review: recommendations

The Kalifa Review supports changing stock-listing rules to allow dual-class shares for fintech companies, a change meant to entice founders to list their companies in London while allowing them to retain control over their firms.

Allowing companies to join the top tier of London’s market by selling just 10 per cent of their shares, down from 25 per cent, is recommended.

As is relaxing rules that give existing shareholders first refusal during fundraising, known as pre-emption rights, to allow companies to raise more capital quickly.

The creation of stock indices for fintech companies to attract investors is also backed.

The Investment Association, which represents asset managers, welcomed the proposed reforms.

“Any changes should, however, consider minority shareholder protections so that these fintechs can attract long-term investment,” said Andrew Ninian, director for stewardship and corporate governance.