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Flashcards in Chapter 6 Deck (10):
1

Special fund segment requirements (SFS)

-segment on the main market
-to target institutional and high net worth professionally advised investors (not retail)
-EU regulated, outside UKLA
-UK and non-UK domiciled are eligible

Admission to trading is two stage
-approval of prospectus by EEA competent authority
-following approval of the prospectus, application to the LSE for trading

2

Listing Requirements (LR)

shares must be fully paid up and free from liens and any other restrictions on the right of transfer
-expected market value of the securities issues by the company must be at least £700k of shares and £200k for debt.
- a prospectus for the sale or admission to listing must be approved by FCA and published
-certificate of approval (passport)
at least 2% of the shares must be distributed to the public (free float)

For premium listing:
-independently audited accounts of 3 years must be published with the latest accounts no more than 6 months old
-at least 75% of the applicant's business must be supported by this 3 year period and it must carry out independent business as its main activity and have controlled the majority of its asses for at least 3 years
-clean working capital statement: sufficient working capital for the next 12 months

3

DTR (timely and accurate dissemination of inside information)

Also covers recklessly created misleading impressions and those create intentionally
All regulatory disclosures must be disclosed through an RIS asap prior to being disclosed to the third parties
all listed companies must retain at least one RIS
company that provides inside information via an RIS must make info available by the next close of business day following

Delaying is ok, but under MAR the issuer has to explain to the FCA why there was a delay

4

Insider lists

Insider lists must be kept for at least5 years from the date on which it is drawn or updated

5

Sponsors

-premium listing company must appoint a sponsor when it:
*makes an application fro admission of equity shares which requires a prospectus
*required to produce a class 1 circular
*transfer of listing from standard to premium
*when it appears to the FCA that there has been a breach of LRs and DTRs

6

Role of sponsors on transactions

-when a sponsor is appointed, it is required to liaise with the FCA, submit all documents required to the FCA and to sumbit the application for listing or circular the the FCA.
It must also sumbit conflicts declaration to the FCA

7

New application for listing and further issues

-LRs satisfied
-prospectus rules
-directors of the company have established procedures to comply with DTRs and LRs
-proper judgement as to the financial position and prospects
-working capital statement

Sponsor's declaration is needed. ,must be submitted to the FCA on the day that the FCA is to consider the application for approval of the prospectus

8

Primary offerings

-offer for sale (institutional investors and public
-offer for subscription (issuing of new shares in response to applications for shares, also likely to be underwritten)
-intermediaries offer (similar to offer for subscription except that an intermediary such as a bank or a broker acts as a conduit to gather investors from among the clients , may or may not be underwritten)
-placing (selective marketing)
-introduction (does not involve an offer of shares for sale, but allows the company's existing shareholders to trade their shares on the stock exchange)

9

Open offer

same as rights issue but does not give the right to shareholders to sell their entitlements
maximum price discount permissable 10%

10

Vendor consideration placing

way of raising relatively small, amount of money to finance an acquisition