Pathway To Becoming Listed Notes

Pathway to Becoming Listed (FCA)

FCA are the Authority

FSMA

• s73(a) FCA has power to make various rules

• s74 FCA must maintain official list

• s75(1) Admission to list only granted on application made to FCA

• s75(4) FCA may not grant application unless it is satisfied that listing rules are met

• s75(3) No application to be made in respect of shares of a prescribed kind

FSMA (Official Listing of Security Regulations)

• Regulation 3 Prescribed Kind means from a private company

FCA make the Listing Rules

Standard Listing - LR 2

LR 2.2.1R Must Incorporate in Conformity with its Constitution

Companies Act 2006

• s755 Only PLC can offer securities to public

  • s4 Companies can start as a plc

  • ss90-96 Private companies must reregister as PLC

• s551 Directors must have the authority to allot shares

• s561 Pre-emption rules must be disapplied

• s271 Company must have a company secretary

LR 2.2.2R Offer Valid Securities

• Securities must be validly allotted

• s2(5a) CA 1985 Ltd only authorised to issue certain amount of share capital

• s28 CA 2006 Has the effect of bringing old articles in line with the 2006 Act

  • SR needed if not to amend articles

  • MA Directors don’t have automatic authority to allot shares

• s550 CA 2006 Ltd with only 1 class of shares before / after allotment

  • (a) Directors may allot shares

  • (b) Directors may grant rights to subscribe / convert to shares

  • Unless the articles prevent this

• s551 CA 2006 Any other type of company

  • (a) Directors may allot shares

  • (b) Directors may grant rights to subscribe / convert to shares

    • If authorised to do so by the company's articles or by resolution

    • s551(2) This power may be granted generally or for a specific occasion by OR

    • s551(8) It does not matter that this OR will change the articles

    • s551(3) State max amount of shares that may be allotted in this instance and the date the instance will expire (5 years max)

    • s551(4) Authorisation can be renewed by OR for another 5 years

    • Disapply statutory pre-emption rights

    • s560 Equity securities means ordinary shares (not usually preference shares)

LR 2.2.3R Successfully Admit Shares to Trading

• This incorporates the pathway to a Main Market listing (therefore companies must comply with all the LSE rules too)

  • Admission and Disclosure Standards

    • ADS 1 Must be on the Official List (FCA) to apply

    • ADS 2 The application process must be complied with

LR 2.2.4R Have shares that can be transferred

• A Special Resolution is needed to change articles if it is necessary to do so

LR 2.2.7R Have a Market Cap of 700,000 or Higher

LR 2.2.8G FCA can accept lower threshold if there is a market for the shares

LR 2.2.9R Must list the entire class of shares

LR 2.2.10R Have a prospectus

Premium Listing - LR 6

LR 6.1.3R Publish independently audited historical financial information for 3 years

LR 6.1.4R Demonstrate that it can carry out an independent business as its main activity

LR 6.1.4BR Where a new applicant has a controlling shareholder upon admission it must have in place:

• (1) A written and legally binding agreement intended to ensure controlling shareholder complies with 6.1.4DR

  • LR 6.1.4DR Independence...

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