UK investors warn against plans to make London a `sexier' stock market

* UK govt review looking to change listing rules

* Aim is to attract more high-growth companies

* Jupiter, LGIM, Aberdeen Standard voice opposition

By Abhinav Ramnarayan and Simon Jessop

LONDON, April 13 (Reuters) - British money managers
representing over a trillion pounds of assets say the UK
government's bid to overhaul its equity- listing regime to
attract more companies to London could leave investors too
vulnerable.

A review commissioned by UK finance minister Rishi Sunak and
led by former EU Commissioner Jonathan Hill is seeking to change
how companies that want to list on the London Stock Exchange are
assessed.

Its recommendations include watering down some governance
requirements to make London more attractive, especially to tech
and fast-growth firms

On Tuesday, Clare Cole, director of market oversight at the
Financial Conduct Authority, the UK regulator, described one of
the recommendations -- on so-called dual class shares -- as
"controversial".

The regulator would take time to sound out all sides of the
market before making proposals to change rules, Cole added.

Major British investors -- including Jupiter Fund Management
, Legal & General Investment Management, the
country's biggest asset manager, and Aberdeen Standard
Investments -- have all opposed the plans to varying
degrees.

"The idea seems to be to get all these new types of
companies listing in London and make it a much sexier index,
instead of being stuck with all these oil and gas names," said
Richard Buxton, head of strategy at Jupiter. "But this can end
badly. I'd rather that London distinguished itself by not
joining the race to the bottom."

Most contentious of the Hill review recommendations is that
companies with unequal voting rights be allowed to join the
London Stock Exchange with a "premium" listing, which would
grant them access to the multi-trillion-dollar FTSE indices.

As of now, such companies are only allowed a "standard"
listing.

The Hut Group and Deliveroo have made such
listings, their dual-class share structures attracting some
criticism

Hill and others argue entrepreneur-led firms would go to
other, more flexible venues such as New York or Amsterdam rather
than compromise to stay in London.

Many investors, though, argue either that existing rules
would suffice or that the proposed changes would not make a big
difference.

"The argument people try and use about people like me is
'you're going to stop growth and innovation'," said Sacha Sadan,
director of investment stewardship at Legal & General Investment
Management.

"Of course not; we really want it, but ... do you really
think Silicon Valley stocks are coming here just because you
change one rule? I wish that was so easy."

Sadan said LGIM had instead made seven recommendations to
the FCA to help attract more growth companies.

However, Peter Harrison, the chief executive of Schroders
, Britain's biggest standalone listed asset manager, came
out in support of the Hill review reforms.

"I have become increasingly concerned that without reform,
London faces slow decline at a time when Amsterdam and other
markets are in the ascendancy," he said in a note.

British investors have been bitten in the past by governance
failures for companies such as Bumi and Eurasian Natural
Resources Corporation.

"Investors here seem to have a longer memory than in the
U.S.," said one investment banker who manages European IPOs, and
asked to remain unnamed. "While I hope the changes go through
... I can't blame them for being cautious."
(Reporting by Abhinav Ramnarayan, editing by Larry King)