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Listing rules and disclosure and transparency obligations - Coggle Diagram
Listing rules and disclosure and transparency obligations
Listing suspensions, cancellation and restoration
The FCA can suspend the listing of a companys securities if the smooth operation of the market is or is likely to be at risk or for the protection of investors
During the period of suspension, the company must continue to comply with the Listing Rules
A company can request that its own shares be suspended
Any such request must be in writing and contain a clear explanation of the background and reasons for the request
The FCA may cancel a listing if it is satisfied that there are circumstances that mean that normal trading of the securities is no longer possible. A common cause for the cancellation of a listing following a takeover where the number of shares in public hands falls below the 25% threshold requirement
Sponsors
Premium listed companies are not required to have a sponsor appointed at all times but generally only at those times when they need to make submissions to the FCA or guidance is required
In practice the majority of premium listed companies will retain the services of a sponsor
General obligations
LR 9.2 - continuing application
A listed company must at all times have its shares admitted to trading on a regulated market operated by a recognised investment exchange and must notify the FCA that it has requested an RIE to admit or readmit any shares to trading, requested a RIE to cancel or suspend trading or that its shares have been cancelled or suspended from trading
At least 75% of the companys business must be independent and controlled by the company
At least 25% of the issued shares, excluding any shares held in treasury, must be held by the public
A listed company with a controlling shareholder must demonstrate that it is able to carry on business independently at all times and must have a controlling shareholder agreement in place and its Articles must allow for the election or re-election of independent directors
LR 9.3 - holders
A listed company must ensure that a proxy form allows for three way voting and state that if there is no indication on how the proxy may vote, the proxy shall exercise their discretion as to whether and if so, how to vote
Where there are five or more directors to retire by rotation the proxy form may give shareholders the opportunity to vote on all elections as a whole in addition to voting on each re-election individually
Companies must not prevent shareholders from exercising their rights by proxy and must provide all shareholders with either a paper form of proxy or by electronic mean
Where a company has power in its articles of association to impose sanctions on a shareholder for non-compliance with a request for information, those powers are restricted to
Any sanction can only be implemented after 14 days notice
For shareholdings of less than 0.25%, the sanctions are restricted to prohibition on attending meetings and exercise of voting rights
For shareholdings in excess of 0.25%, additional permitted sanctions are the withholding of dividend payments and restricting the right of transfer
Any sanctions imposed must cease to apply within 7 days of the information being requested being supplied or notice of a sale to an unconnected third party has been made through an RIS or overseas exchange or by the acceptance of a takeover offer
A company proposing to issue further equity shares or to sell treasury shares must offer them to existing shareholders in proportion to their holding, unless a general disapplication of the statutory pre-emption rights has been given or a rights issue is proposed and the misapplication relates to fractional entitlements and entitlements that are necessary or expedited or where the sale is to an employee share scheme
LR 9.4 - documents requiring FCA approval
Companies must ensure that the terms of any employees share scheme or long term incentive scheme are approved by ordinary resolution of shareholders in GM before being adopted, other than schemes where all or substantially all employees are eligible to participate on similar terms provided that all or substantially all employees are not also directors
Companies must not issue options or waanrats where the exercise price is less than the market value as determined in accordance with the scheme rules without the prior sanction of shareholders by ordinary resolution in GM, this rule does not apply where the grant relates to options or warrants being granted in an employees share scheme and participation is offered on substantially the same terms to all or substantially all employees or in circumstances where the grant of options or warrants is pursuant to the issue of replacement options following a takeover or reconstruction
LR 9.5 - transactions
As soon as practical, following completion of a rights issue the company must notify an RIS of the issue price and principal terms of the offer and the results of the issue including the date and price at which any unsubscribed rights were sold if any
Rights issues and open offers must remain open for acceptances for at least 10 business days
The timetable of an open offer of securities must be approved by the RIE on which the shares are traded, if the terms of an open upper are subject to shareholder approval, the circular relating to the open offer must not imply that the offer gives the same entitlements as a rights issue
An offer by a listed company by way of open offer, placing, vendor placing, offer for subscription or issues out of treasury must not be at a discount of more than 10% to the mid-market price on the day of the announcement of the offer or agreeing the placing taking places
A discount of more than 10% is permitted if the issue is subject to specific shareholder approval or made pursuant to a pre-existing general misapplication of pre-emption rights
A company undertaking an offer for sale or offer for subscription must ensure that letterers of allotment or acceptance are all issued simultaneously and numbered serially. There must be an equality of treatment between certificated and uncertificated holdings
If a listed company issues a circular in connection with a reconstruction or refinancing, the circular must contain a working capital statement drawn up and on the basis that the reconstruction or refinancing is successful
LR 9.6 - notifications
Companies must forward two copies of all circulars, notices or other documents to which the LR apply to the FCA for publishing through the document viewing facility
These copies must be forwarded to the FCA at the same time they are issued
Other than routine business at their AGMs, companies must forward two copies of all resolutions passed in GM to the FCA for publication through the document viewing facility as soon as possible after the meeting
Companies must notify an RIS when a document is available for viewing on the document-viewing facility, unless the full text of the document is also provided to the RIS
The FCA must be informed of the following information in relation to changes in capital
Proposed changes to capital structure including any listed debt securities
Number of shares redeemed and the number remaining outstanding
Details of any extension to the validity of temporary documents of title
Details of the results of a share issue must be notified as soon as known, except that the announcement may be delayed by up to two business days to enable udnerwriting commitments to eb taken up or lapse
An RIS must be notified no later than the end of the business day following the decision or receipt of notice of any change in the board including
Name, position and function of any new director
Resignation, removal or retirement of any director. Notification is not required where a director retires by rotation and is reappointed at a general meeting
In respect of the appointment of a new director, the following information must be disclosed within five business days of the decision to appoint them
Details of all current directorships of publicly quoted companies held during the preceding five years distinguishing between current and past directorships
Any unspent convictions in relation to indictable offences
Details of any receiverships, compulsory lqiudiations, creditors voluntary liquidations, administrations, company voluntary liquidations or compositions or arrangements with creditor s or any class of creditor where the director was an executive director or partner at the time or within 12 months preceding those evenets
Details of any receiverships of any asset of such person or partnership in which the director was a partner at the time or within 12 months preceding those events
Details of any public criticisms of the director by statutory or regulatory authorities and whether the director has ever been disqualified by a court from acting as a director or from fulfilling management duties or conducting the affairs of a company
When a company changes its name it must notify an RIS, stating the date on which the change was effective, notify the FCA in writing and forward to the FCA a copy of the certificate of incorporation on change of name
LR 9.7A - preliminary announcements
If a company prepares a preliminary statement of its annual results, the statement must be published as soon as possible after it has been approved by the board
The statement must be agreed with the company's auditor prior to publication
The statement must include figures in the form of a table including the items required for its interim report and must be consistent with the presentation to be adopted in the annual report
A company must notify an RIS as soon as possible after the board meeting to approve a decision to pay or withhold a dividend or other distribution to shareholders. It must give details of the net amount per share payable, the payment date, record and any foreign income dividend election, together with any income tax treated as payable at the lower rate and not repaybale
National Storage Mechanism
The NSM has been operated directly by the FCA since April 2020
Copies of all regulatory announcements and copies of financial statements and other documents issued by listed companies must be submitted to the NSM as a pemernanent record
The NSM is a repository of regulated information which are required by the Listing Rules, Disclosure Guidance and Transparency Rules or the Propsectus Regulation Rules to be filed and made available for public inspection
The information and regulatory announcments filed with the NSM are held indefinitely