1. MM Flotations Flashcards
(138 cards)
1
Q
What happens after publishing pathfinder?
A
Formal bookbuilding
2
Q
What is a standard listing on MM
A
Comply w/ minimum standard of EU Directive
3
Q
What is an institutional placing
A
New and existing shares to e.g. brokers
4
Q
What is CREST
A
Ms hold e-share certificates for LCs, allowing electronic trading
5
Q
Where are a sponsor’s responsibilities
A
LR 8.3 + 8.4
6
Q
When is it 20 clear working days to submit docs to FCA before approval of prospectus
A
New issue
7
Q
What applies (acronym) to issue new shares on listing
A
CADNB
8
Q
Why does a company have to re-register as a public company to list
A
755 FSMA general prohibition
9
Q
What is a ‘controlling shareholder’?
A
30%
10
Q
What financial info must applicant have under LR Ch.6 to list
A
3 years
11
Q
Two kinds of retail offering
A
Subscription and/or sale
12
Q
Some cons of listing
A
Disclosure + reporting requirements, management time, change of BoD, CGC, costs and loss of control
13
Q
What states that prospectus for non-IPO must be made public ASAP and reasonable time before offer/admission to trading
A
PR 3.2.2
14
Q
What two changes must be made to the constitution of C if converting to plc under 90 CA
A
To name + AoA
15
Q
21 FSMA applies to what
A
Cannot make a financial promotion unless exemption in FSMA (Financial Promotion)
16
Q
What part of CA has prohibition against offering to the public
A
755
17
Q
When must 48-hour listing docs be submitted to FCA by
A
By midday 2 BDs before FCA to hear app to admit listing
18
Q
What 3 requirements does C have to comply w/ for shares to convert from Ltd to Plc under 90 (conditions of converting)
A
Minimum share capital of £50k + 1/4 NV paid up + 100% of premium
19
Q
What is the correct terminology for shares going onto AIM
A
Admitted to trading
20
Q
What is a global offering
A
Offering in more than 1 country
21
Q
Time period over which listing on MM can span
A
6 - 12 months from day of appointing advisers to listing
22
Q
What three committees does CGC recommend having
A
Audit, Nomination and Remuneration
23
Q
What must the nature of the shares be under LR Ch.2 to list on MM
A
Duly authorised, admitted by LSE and freely transferable
24
Q
What is the correct terminology for shares going onto MM
A
Listing
25
Benefits of premium listing on MM
Good reputation, easier passporting and encourages investment
26
What is used to avoid complying w/ regs in every J in a global offering
Exemptions
27
How do you subdivide existing share capital - M res
OR
28
What regime is a pathfinder subject to?
Advertising regime - PR 3.3
29
What is the 'on-the-day' doc
Sponsor submits shareholder statement before 9am on day FCA to consider app
30
Some pros of listing
Access to capital, market to trade shares, public profile, incentivise employees, liquidity + can retain control
31
What is a sale retail offering
Sale of existing shares by Ms
32
Why must rights of pre-emption be removed in AoA
To make shares freely transferable
33
Is it sufficient that a company secretary have a law degree?
No - needs a qualification, e.g. solicitor
34
What happens after prospectus docs have been submitted to FCA prior to 48-hour docs
Approval of prospectus + publish fixed price prospectus
35
For what listings on MM does the free float requirement apply
Premium and standard
36
Two kinds of institutional offering
Placing or through intermediaries
37
What is a premium listing on MM
EU minimum and UK standards (super-equivalent listing regime)
38
Timing consideration for institutional offering (compared to retail)
Fewer investors, identified early (unless global), so faster
39
What should you be careful of when deciding if 25% of shares are in public hands for listing
Not to include any exemptions under (3) for both standard (Ch.14) and premium (Ch.6)
40
Where is the comply (w/ CGC) or explain rule
LR 9.8.6R(6)
41
Three rounds of docs that will be submitted to FCA prior to listing
Prospectus, 48-hour listing docs and on-the-day docs
42
How does C convert from Ltd to plc
90 CA via SR
43
618 CA
OR to subdivide existing share capital
44
What changes might need to be made to the articles of a company when it becomes public
Change kind of articles - e.g. MA for private company no longer applicable
45
Is compliance w/ DTRs compulsory for all listings?
Yes
46
Why must pathfinder only be distributed to qualified investors
Exclusion under 86(7) FSMA, otherwise breaching 85(1)
47
How can control over company be retained despite listing
Selling 25% only (which is the minimum) - can still pass SR w/ remaining 75%
48
What two bodies does a C who wish to list have to apply to
LSE (to admit to trading) and FCA (for app to Official List)
49
Shareholder liquidity point for retail offering
Larger M base so greater liquidity - more people buying and selling
50
What market capitalisation is needed under LR ch.2
£700k
51
Provision on publishing price once established for price-range prospectus
PR 2.3.2R(2)
52
What provision states methods to make prospectus public after approval
PR 3.2.4
53
Two important PLPs before listing
PLP 5 treat holders of same share class equally, and PLP 6 ensure info communicated to Ms to avoid creating false market
54
What is the free float requirement for premium & standard listings
25% to be held in public hands
55
What happens after prospectus approved and published
Submit docs to FCA + LSE for admission hearings
56
What must the latest BS be for listing under LR Ch.6
No more than 6 months from prospectus and no more than 9 from admission
57
What is required for a company to move from premium to standard listing on MM
75% of Ms to agree (as losing protection)
58
What is an 'introduction'
Moving shares from MM to AIM or other way around
59
By when does sponsor submit Shareholder Statement to FCA
By 9am on morning FCA to **hear app**
60
When is compliance w/ CGC compulsory - for what listings
Premium
61
What is bookbuilding
Institutional investors show interest
62
Why are the costs of listing a negative side
Uses up substantial proportion of cash from flotation
63
Why does listing require significant investment of management time
Have to comply w/ all requirements whilst also managing business
64
How does listing affect liquidity?
Gives objective valuation of company
65
What is a retail offering
At least some shares offered to public
66
What provision requires LisC to produce statement on relevant corporate governance code
DTR 7.2.1 + 7.2.2
67
Two kinds of listing on MM
Standard and premium
68
If company decides not to comply with CGC and to explain instead, where do they have to explain
In Annual Report
69
Is an 'introduction' an offer?
No
70
Cost point for retail offering
Expensive to offer to public as need to appoint bank to deal w/ apps + advertising costs
71
How does listing lead to a loss of control
External influences + pressures + follow guidelines + keep investors happy
72
Why is it good to comply with the CGC
Investors more likely to invest in the company
73
When are CREST accounts credited
Day of admission
74
Timing point for retail offering
Time-consuming - more marketing + processing apps
75
What provision requires consolidated accounts if company to list has a subsidiary
LR 6.2.1R(4)
76
Two ways a placing institutional offer may be done
Via Placing Letter + Agreement, or book built
77
755 CA says what
Prohibition against offering to the public
78
When is a receiving bank appointed to deal with applications - what kind of offering
Retail
79
What does CGC say about make-up of board
1/2 of Board should be NED and independent
80
How can you make shares a more marketable price upon listing
Subdivide existing share capital
81
What should notice period be for Ds per CGC
One year
82
Under what is a sponsor REQUIRED to list on MM
LR 8.2.1R
83
When might the free float requirement not apply + provision
If FCA modifies (LR 6.14.5G)
84
Three ways pathfinder restricted
Comply w/ advertising rules, only distribute to qualified investors, and counted as 'financial promotion' so only send to exemptions
85
For what two things will AoA need to be amended
Remove rights of pre-emption and ensure constitution compatible with CREST
86
Cost consideration for institutional offering *over* retail
Cheaper - offered through investment bank/broker direct to investors
87
Does a pathfinder have to be approved by FCA?
No
88
What part of LR contains LPs and PLPs
7.2R
89
Who is usually the lead UW in a listing
Investment bank
90
Two kinds of offering when listing on MM
Retail or institutional
91
What provision states that prospectus must be approved before it is published
PR 3.1.10R
92
When might a global offering be appropriate
To increase profile and/or strong presence in that country
93
If shares are held by M on CREST through sponsored M, what does that mean?
Direct user appointed to communicate on M's behalf, but M holds stock in their own name
94
Two kinds of marketing documents for roadshows (if not using full prospectus)
Price-range prospectus and pathfinder
95
When must LPs and PLPs be complied with - from when?
As soon as C listed
96
What states that prospectus for IPO must be published 6 WD before end of offer
PR 3.2.3
97
Where is 'financial promotion' in FSMA
21 FSMA
98
Two examples of minimum standard for standard listing on MM, compared to premium
No 3-year accounting history, no sponsor
99
Three ways Ms can hold shares on CREST
Directly, sponsored M or nominee
100
273 CA requires what
Ds of Plc check CS has requisite knowledge + experience
101
What intermediaries might institutional offering be with
Stockbrokers
102
What LR Chapter deals with conditions relating to **_all_** shares (e.g. freely transferable)
2
103
When do unconditional dealings commence
8am on morning of admission
104
Provision on when to submit docs to FCA prior to approval of prospectus
PR 3.1.3(2)(b)
105
What is the free float requirement for listing
Number of shares that must be held in public hands
106
What is a price-range prospectus
Contains all info except exact price - range w/ criteria/conditions instead
107
What is necessary to have with 'controlling shareholders' before listing
Must have relationship agreement w/ controlling shareholder
108
What working capital must C have to list under LR Ch. 6
Sufficient working capital for next 12 months from date of publication of prospectus
109
What is bookbuilding
Marketing shares to investors via bookrunners to get an idea of demand and set a realistic price
110
Dual application to be listed on MM is what
Shares admitted to trading by app to LSE AND application to Official List by app to FCA
111
What is an institutional offering
100% of shares sold to sophisticated investors
112
What provision gives docs to submit to FCA for admission hearings
LR 3.3.2R
113
Shareholder liquidity point for institutional offering
Fewer Ms holding larger number of shares - lower liquidity
114
How does listing provide access to capital
Cash injection of money from selling shares to list to fund growth and/or reduce debt
115
Where is 'qualified investors' defined
86(7)
116
What happens if there is overlap between DTR and CGC
As DTR = mandatory, must comply
117
Why might BoD have to change upon listing
Ds must have appropriate experience and expertise to comply w/ CGC
118
When is a pathfinder commonly used
Institutional offerings
119
What is a subscription retail offering
New shares
120
What parts of CA state need minimum £50k share capital to be plc (2 parts)
91(1)(a) + 763
121
Provision stating price-range prospectus to be approved by FCA
PR 2.3.2R
122
What parts of CA state shares in plc must be at least 1/4 NV paid up + 100% premium (2 parts)
91(1)(b) + 586
123
Under what part of CA do you subdivide existing share capital
618
124
What chapter of LR relates to the conditions the applicant must fulfil before listing (premium listing)
Chapter 6
125
What is a marketing tool to list on MM
Pathfinder
126
Why do Cs have to convert from Ltd to Plc to list
Because of 755
127
If a prospectus has to be used, when must docs be submitted to FCA
20 clear working days before intended approval date
128
Most important LP to consider before listing
LP 1 - reasonable steps to have adequate systems in place
129
What doc can present key info about C to potential investors in roadshows
Pathfinders
130
When must prospectus be made public for IPO
6 WD before end of offer
131
First step to list on MM
Publish pathfinder
132
What does UW of listing do
Guarantees to purchase any shares not taken up, for a small fee
133
What does compliance with LR 9.8.6R(6) mean - automatic compliance w/ what provision
DTR 7.2.3R
134
When must docs be submitted to FCA + LSE for admission hearings
By midday 2 BD prior to listing
135
What does UK CGC contain
Principles and Provisions for good governance
136
What test under 85 would pathfinder breach if not solely distributed to qualified investors
85(1)
137
Name four parties involved in listing
Investment bank, broker, sponsor, reporting accountants and solicitors
138
Who is sponsor approved by
FCA
