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Listing Requirements - Coggle Diagram
Listing Requirements
Listing and the FCA
The FCA is the UK competent authority and exercises its powers under FSMA2000 and retained EU legislation including UK Market Abuse Regulations regulating the admission of securities to official listing in the UK
As the competent authority, the FCA establishes the listing rules for admission of securities to listing, the containing obligations of the issuers of those securities and the enforcement of those continuing obligations
Applications for admission to listing must be made to the FCA and a separate application must be made to a regulated market such as the LSE for those securities to be admitted to trading on the Main Market
These rules and the codes are not technically law, the sanction for their breach is a disciplinary action against the company and ultimately removal from the Official List so that among other matters the company's share price is no longer quoted and the shares no longer traceable on an exchange.
Breaches of the Listing Rules are within the scope of civil prosecution, and the FCA has power to impose unlimited fines on companies, directors or other individuals breaching the rules
Listing Principles
The FCA has established a number of principles applicable to all listed companies together with additional principles applicable to premium listed companies
The purpose of the Listing Principles is to ensure that listed companies pay due regard to the fundamental role they play in maintaining market confidence and ensuring fair and orderly markets
The Listing Principles are designed to assist listed companies in identifying their key obligations, behaviours and responsibilities as a listed company. This helps to ensure both the spirit and the letter of the listing regime are observed
Regulated activity
Financial promotion and investment activity includes giving any form of investment promotion and advice and investment management as well as undertaking securities transactions as broker dealer and/or principal within the UK
While new share issues are an obvious example, company secretaries need to be particularly careful when assisting employees with employee share options schemes to ensure that they are not inadvertently giving investment advice
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Agreements made in respect of the regulated activity may be unenforceable by the unauthorised person and they may be subject to a restitution order
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Regulatory regime
The offer for sale of shares in listed companies is subject to the legislation set out in FSMA2000 and the Listing Rules issued by the FCA, derived in turn from retained EU legislation
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The regime is supervised by the FCA, to which most of the powers of the Secretary of State under the FSMA2000 have been transferred. The main feature of this regime is that subject to certain exceptions only authorised or exempt persons may carry on a regulated activity
Listing Principles
Listing Principles
A listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations
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Authorised persons
The status of being an authorised or exempt person is conferred on application to the FCA by an individual or firm
Members of professional bodies such as solicitors and accountants are usually authorised by their professional body