1. Intro

Question 1

Advantages of public co status

Answer 1

offer its shares to the public

Question 2

what is a listed co?

Answer 2

a public co, any of the shares in which are officially listed and trade on a stock market

Question 3

what are institutional investors?

Answer 3

large orgs such as banks, insurance companies, pension funds and investment funds

Question 4

why do institutional investors require less protection?

Answer 4

specialist knowledge

Question 5

what is an ipo?

Answer 5

process by which a co becomes a listed co

Question 6

what is the listing procedure for an ipo

Answer 6

admitted to listing on official list (must list with fca and comply with UKPR and UKLR)

admitted to trading on the market (liaise with stock exchange and comply with admission and disclosure standards)

Question 7

main marketing doc for an ipo

Answer 7

the prospectus

Question 8

what is the prospectus

Answer 8

doc containing a substantial amount of info about the co

Question 9

who is responsible for ensuring accuracy of prospectus

Answer 9

directors

Question 10

can responsibility be delegated?

Answer 10

no- can enlist help of secretary and key managers to locate, and provide advisers with accurate info

Question 11

which UKLR provides info on whether a sponsor is needed

Answer 11

4.2

Question 12

when does a co need to appoint a sponsor

Answer 12

any co applying for admission of equity shares to escc category requiring publication of a prospectus

Question 13

which UKLR provides rules re sponsors

Answer 13

ch 24

Question 14

what do brokers do

Answer 14

advises co, ensuring there is sufficient demand for shares

Question 15

how do brokers advise co

Answer 15

by analysing market conditions & liaising with investors

Question 16

what else do brokers advise on

Answer 16

best flotation method, other tactical issues

Question 17

what do reporting accountants do

Answer 17

review the co finances and produce 3 main reports

Question 18

what are the 3 main reports reporting accountants produce

Answer 18

long form
short form
working capital

Question 19

what is underwriting

Answer 19

taking leftover shares post ipo for a fee

Question 20

what if the ipo is fully subscribed

Answer 20

no obligation to take sharesw

Question 21

role of registrar at ch

Answer 21

manages the co’s share register
sends share certificates to successful applicants

Question 22

role of pr consultant

Answer 22

maintain a positive public profile
ensure comms are effective
manage co expectation re sales pitch
provide media training

Question 23

ch3 conditions for listing

Answer 23

• duly incorporated as public co
• securities comply with all legal requirements
• admission to trading on a regulated market
• shares must be freely transferable

Question 24

min aggregate market capitalisation for listing

Answer 24

30 mil

Question 25

what if a co has different classes of shares

Answer 25

all shares of that class must be listed

Question 26

what must happen re prospectus for a co to be listed

Answer 26

- approved by fca and published if art 3 UKPR and s85 FSMA applies

Question 27

UKLR Ch 5 Requirement re Controlling Sh

Answer 27

board can take strategic decisions without interference from controlling sh

Question 28

what is a controlling sh

Answer 28

a sh who alone or with persons acting together own 30% or more of voting rights

Question 29

what could regulate unwanted interference by a controlling sh

Answer 29

relationship agreement

Question 30

role of neds

Answer 30

ensure good corporate practice once co has been listed

Question 31

who approves of election or re-election of neds

Answer 31

majority of sh and majority of independent sh

Question 32

which uklr sets out application procedure

Answer 32

ch 20

Question 33

what are the different floating methods

Answer 33

public offer placing intermediaries offer introduction

Question 34

how are public offers structured

Answer 34

1) offer for subscription (shares not yet in issue) 2) offer for sale (shares in issue)

Question 35

advantages of a public offer

Answer 35

can raise large amounts of capital private and institutional investors can invest

Question 36

what is a placing

Answer 36

marketing of shares either already in issue or not yet in issue to specified persons, clients of sponsor or other securities houses

Question 37

advantages of a placing

Answer 37

greater discretion to choose sh co can raise large amounts of capital

Question 38

what is an intermediaries offer

Answer 38

similar to a placing

Question 39

what is an introduction

Answer 39

co with shares already held by public or institutional investors is admitted to listing without offering further shares

Question 40

other methods of floating

Answer 40

institutional offer retail global or international employee friends / family

Question 41

what does listing do

Answer 41

provides access to a market on which members of the public and financial institutions can buy and sell shares