The UK Listing Authority

Question 1

Define public companies

Answer 1

1. These are companies that seek finance from the investing public (private companies are forbidden to raise capital this way)
2. They also wish to have their securities listed on the London stock exchange
3. They need to comply with the stock exchange rules
4. Their shares are freely marketable, making them attractive to invest - they are easy to buy and sell is they traded on a public exchange which has liquidity 

Question 2

In the UK, who is the listing authority?

Answer 2

1. FCA also known as a financial conduct authority
2. They decide on the admission of securities to the official list based on some listing rules.
3. Power to create the rules comes from the “Financial Services and Markets Act 2000”
4. The listing rules also implement various EU directives. These are “Prospectus Directive” and “Transparency Directive”

Question 3

Briefly explain what a premium listing is?

Answer 3

A premium listing is a:

1. higher-tier option for companies on a stock exchange
2. Gives them more visibility and credibility.
3. It requires meeting stricter rules, but in return, it helps attract more serious investors
4. can make the firm look more professional and trustworthy.
5. It’s only available to equity shares issued by commercial trading companies, OEICs and close-ended investment funds

Question 4

Briefly explain what a standard listing is

Answer 4

1. For firms that meet the minimum requirements laid down by listing regulations.
2. Overall compliance responsibilities are lighter.
3. They cover insurance of shares and depository receipts.

Question 5

Why would firms use premium listings?

Answer 5

1. Increased Visibility
   Premium listings are more prominently displayed, helping firms stand out to a wider audience of investors.
2. Access to Exclusive Investor Markets
   Certain institutional or high-net-worth investors only consider premium-listed firms, so this opens doors that standard listings can’t.
3. Enhanced Credibility
   Premium listings typically require stricter governance and transparency, which builds investor trust and confidence.
4. Greater Marketing Support
   Premium-listed firms often receive additional promotional exposure—such as featured placements, search priority, or targeted communications.
5. Competitive Advantage
   Being seen in the premium section gives firms a more professional, established image compared to standard-listed peers.
6. Improved Fundraising Potential
   More visibility and trust often lead to faster and larger investments.