LPC Law Notes Corporate Finance Notes
A collection of the best LPC Corporate Finance notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Corporate Finance notes available in the UK this year. This collection of notes is fully u...
The following is a more accessible plain text extract of the PDF sample above, taken from our Corporate Finance Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Corporate Finance: SGS 1: Flotations (I): Preparation for Listing
INDEX OF ABBREVIATIONS
- RIE – Recognised Investment Exchange
- IPO – Initial Public Offering
- PR – Prospectus Rules
- LR – Listing Rules
- DTR – Disclosure Guidance and Transparency Rules
- LP – Listing Principles
- PLP – Premium Listing Principles
- FSMA 2000 – Financial Services and Markets Act 2000
- RAO – Financial Services and Markets Act 2000 Regulated Activities Order 2001
- FPO – Financial Services and Markets Act 2000 Financial Promotions Order 2005
- MAR – Market Abuse Regulations
- CJA – Criminal Justice Act 2002
- FSA – Financial Services Act 2012
- UK CGC – UK Corporate Governance Code
- RCF – Revolving Credit Facility
- LSE – London Stock Exchange
- AIM – Alternative Investment Market
- FCA – Financial Conduct Authority
- MAC - Material Adverse Change
- EoD – Event of Default
Corporate Finance: Key Terms and Concepts
- Recognised Investment Exchange – Investment exchange recognised by the FCA and which engages exemptions from general prohibition in respect of regulated activities in s.19(1) FSMA 2000 – includes LSE.
- Regulated Market – Defined in FCA Handbook – includes LSE Main Market BUT NOT AIM.
- Prescribed Market – Defined in FSMA Regulations – includes both LSE Main Market and AIM.
- Quoted Company – Company whose equity share capital listed on the Official List and admitted to trading on LSE Main Market.
- Traded Company - Company, any shares of which carry rights to vote at general meetings AND are admitted to trading on a regulated market in an EEA State.
- Primary Issue – Flotation/Initial Public Offering (IPO) – first time that company makes on offer of listed shares but does NOT always involve an offer of shares to the ‘public’ (e.g. primary issue can be a purely institutional offer).
- Secondary Issue – Subsequent issue of shares by a listed company.
- CREST – Central Securities Depositories for the UK under the Central Securities Depository (CSD) Regulations 2014 – computerised system which allows shares to be held and traded electronically between CREST members by sending electronic instructions about the price/number of shares being transferred.
- Advantages of Listing Company Shares – Access to capital + providing market for trade in company’s shares + increased public profile for the company.
- Disadvantages of Listing Company Shares – Enhanced disclosure/reporting requirements + requires significant investment of management time/resources + may require changes to board to satisfy demands of new investors/comply with regulatory obligations + expensive process (e.g. adviser’s fees/commissions) + loss of control to new investors.
- LR 8.2.1R: Sponsor – FCA requires that a company applying for premium listing on Main Market of LSE appoint a sponsor to assist the application – sponsor usually an investment bank/broker and must be FCA approved (LR 8.6.2R).
- LR 8.3/8.4: Responsibilities of Sponsor – Sponsor responsible for:
(a) co-ordinating/project managing the listing application process;
(b) helping company prepare/submit application for listing;
(c) ensuring that the company/its shares satisfy the applicable requirements for listing on Main Market of LSE; and
(d) Making declaration to FCA that sponsor has fulfilled its responsibilities under the Listing Rules.
- LR 8.7: FCA Supervision – FCA monitor/supervise sponsors to ensure that they continue to satisfy criteria for FCA approval as a sponsor and comply with responsibilities under the Listing Rules – FCA can sanction sponsors which fail to fulfil their duties under Listing Rules under ss.88A-88E FSMA 2000.
Types of Offering
- Retail Offers – Shares offered to the public in general – creates a large shareholder base which results in greater liquidity for shares but are more expensive and take longer to organise due to increased marketing requirements + need to appoint receiving bank to manage applications process – can be further divided into:
(a) LR App 1.1: Offer for Subscription – Invitation to public to subscribe for securities of the issuer not yet in issue (i.e. sale of new shares) as a means of raising capital for the company – new shares offered to public by way of an initial public offering (IPO) with company appointing receiving bank to process applications to subscribe from members of public, obtain payment of purchase price and transfer payment to company.
(b) LRD App 1.1: Offer for Sale – Invitation to public to purchase shares in the issuing company which are already in issue (i.e. pre-existing shares issued/allotted prior to flotation) – does NOT involve the company issuing new shares to raise new capital but rather allows existing shareholders to realise their investment – selling shareholders appoint receiving bank to accept applications/obtain payment/forward consideration to selling shareholders.
- Institutional Offers – Shares offered directly to pre-identified institutional investors (e.g. banks/pension funds/insurance companies) through an investment bank/broker – results in smaller shareholder base which leads to reduced liquidity of shares but reduced expense to reduced marketing costs/regulatory requirements – does not usually require the appointment of a receiving bank due to reduced numbers of subscribers/investors.
- LR App 1.1: ‘Placing’ – Marketing of securities already in issue but not listed OR securities not yet in issue to specified persons/clients of sponsor/securities house which does NOT involve an offer of shares to the public/existing shareholders of the issuer.
- Placing Letter – Sent to places detailing the terms/conditions of the offer – signed/returned by the places if they wish to subscribe for the shares.
- Placing Agreement – Record of agreement between sponsor and company for the sponsor to place shares with investors on behalf of company.
- ‘Bookbuilding’ – Means of marketing an issue of shares whereby investment bank involved creates a ‘book of interest’ in shares being placed to...
Buy the full version of these notes or essay plans and more in our Corporate Finance Notes.
A collection of the best LPC Corporate Finance notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Corporate Finance notes available in the UK this year. This collection of notes is fully u...
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