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FCA > Companies Act > Flashcards

Companies Act Flashcards

1
Q

What are pre-emption rights?

A

Rights given to existing shareholders which prevent dilution, have right of refusal to new shares issued for cash

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2
Q

What is a scheme of arrangement?

A

Compromise arrangement with shareholders or creditors allowing it to restructure itself

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3
Q

What is a squeeze out?

A

Bidder acquires 90% of shares or 90% of voting rights, bidder may oblige shareholders to sell any remaining shares to them

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4
Q

What is a sell out?

A

Bidder has acquired >90% in value, shareholders who did not accept offer have right to oblige bidder to acquire their shares

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5
Q

How many days given to shareholders to make a decision in pre-emption rights?

A

14 calendar days

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6
Q

What are the exceptions for listed companies for pre-emption rights?

A
  1. Special resolution: (Suspend up to 5 years with a special resolution)
  2. General approval: if issuing no more than 5% of issued share capital in one year, 7.5% over three years
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7
Q

What are the restrictions on non pre-emptive issues pricing based on Listing Rules?

A

Price cannot be at a discount of more than 10% to the middle market price

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8
Q

When may the share capital be reduced?

A

AoA allow it, a special resolution is passed and courts approve action for plc

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9
Q

When can shareholders appoint inspectors from BEIS to investigate company?

A

1) Ordinary resolution is passed or

2) >200 shareholders or owners at least 10% of issue shares

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10
Q

Define financial assistance rule (CA S678-680)?

A

Prohibits a public company or its subsidiary from directly or indirectly giving financial assistance to a third party for the purchase of its own shares or to reduce or discharge a liability incurred by a purchaser or third party for purpose of acquisition

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11
Q

What is the penalty for financial assistance in the purchase of shares in itself?

A

2 years and unlimited fine

Contracts are void

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12
Q

What is the notice period for AGM?

A

21 calendar days for plc and 14 calendar days for ltd

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13
Q

What is the notice period for GM?

A

21 calendar days for plc (may shorten to 14 days if shareholders agree) and 14 calendar days for ltd

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14
Q

Who can propose a resolution?

A

1) Directors,

2) Shareholders with either 5% of voting rights, >100 shareholders holding at least £100 paid-up share each

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15
Q

When does a company / person have to disclose shareholdings?

A

If no previous interest, when shareholdings are above 3% or any change to whole % point if over 3% (disclose within 2 business days)

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16
Q

What requirements does a plc must satisfy?

A
  1. Minimum of two shareholders
  2. Minimum share capital of £50,000 (at least 25% nominal paid up)
  3. Registered as plc
  4. Memorandum stating as plc
17
Q

Which are the primary legislation for money laundering?

A
  1. POCA
  2. SOCPA
  3. Terrorism Act 2000
  4. Counter-Terrorism Act 2008
18
Q

Describe 3 stages of money laundering

A
  1. Placement: proceeds of any crime are placed in bank
  2. Layering: Cheque is drawn to buy different investments to cover audit trail
  3. Integration: Money appears as legitimate source of income
19
Q

What is the maximum penalty for money laundering?

A

14 years and or unlimited fines

20
Q

What is the maximum penalty for prejudicing a money laundering investigation?

A

Five years and or unlimited fine

21
Q

What is the maximum penalty for failure to comply with Money Laundering Regulations?

A

Two years and or unlimited fine

22
Q

What are 3 main requirements for firms under the Money Laundering Regulation 2017?

A
  1. Administrative
  2. Training of relevant employees
  3. Preventative
23
Q

What is the difference between money laundering and terrorist acts?

A

Size of fund and origin of fund being legitimised

24
Q

What is the maximum penalty for bribery?

A

10 years and or unlimited fine

25
Q

Define inside information and insider

A

Inside information is unpublished, specific or precise, from an inside source and price sensitive

Insider can be either primary or secondary

26
Q

What are the excluded investments in relation to insider dealing?

A
  1. Assets with no secondary market
  2. Commodities and commodity derivatives
  3. Sport and forward FX
  4. Insurance policies
27
Q

What are the defences for insider trading? (3)

A

1) No intent
2) Not price sensitive and already publicly available,
3) Following required procedures

28
Q

What is the maximum penalty for insider trading in the Crowne Court?

A

7 years and unlimited fine

29
Q

What is the maximum penalty for insider trading in the magistrates court?

A

£5000 and up to 6 months

30
Q

What are the special defenses for insider trading?

A

1) Market makers
2) Market information
3) Price stabilisation

31
Q

What does the S89-92 FSA 2012 cover?

A

Misleading Statements and Impressions

32
Q

What is the maximum penalty for misleading impressions or statements in the magistrates court?

A

£5000 and up to 6 months

33
Q

What is the maximum penalty for misleading impressions or statements in the Crowne Court?

A

7 years and unlimited fine

34
Q

What are the penalties for Market Abuse (EU MAR)

A

Civil law in UK so lighter burden of proof and effect-based

35
Q

What is the purpose / scope of MiFID?

A
  1. Increase post-trade transparency
  2. Allows for passporting across EEA
  3. Ensure cost effective venues are available across EEA
36
Q

What services can be passported under MiFID?

A
  1. Broker
  2. Execution of orders
  3. Portfolio management
  4. Investment services
  5. Underwriting and placing
  6. Operating MTF or OTF
37
Q

What services are excluded for MiFID? (4)

A

1) Hedging derivatives
2) Gambling
3) Insurance companies
4) Commodity trading

FCA (6 decks)

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