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Company Compliance & Administration > Chapter 8 - SECURITIES EXCHANGE LISTING REGIME > Flashcards

Chapter 8 - SECURITIES EXCHANGE LISTING REGIME Flashcards

1
Q

A Listed company is one whose shares have been admitted to the Official List (FSMA2000 s74). Who maintains this list?

A

The Official List is maintained by the FCA

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2
Q

What is the largest regulated market operating in the UK?

A

LSE Main Market

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3
Q

What body is the UK ‘competent authority’ and exercises its powers under FSMA2000 (Financial Services and Market Authority Act 2000)?

A

FCA

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4
Q

Applications for admission to listing (i.e. for securities to be admitted to the Official List) must be made to the ______, and a separate application must be made to a regulated market such as the _______ for those securities to be admitted to trading on the Main Market.

A

FCA

LSE

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5
Q

In what rules are the procedures for seeking and maintaining a listing set out, as issued by the
FCA?

A

Listing Rules

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6
Q

Are the the rules and the codes relating to listing requirements technically ‘law’?

A

No.

The sanction for their breach is disciplinary action against the company and, ultimately, removal from the Official List so that among other matters the company’s share price is no longer quoted and the shares no longer tradeable on an exchange. Breaches of the Listing Rules are within the scope
of civil prosecution, and the FCA has power to impose unlimited fines on companies, directors or other individuals breaching the rules.

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7
Q

What is the purpose of the Listing Principles?

A

Company:
Ensure companies uphold market confidence and

Market:
ensures a fair and orderly market

(to ensure that listed companies pay due regard to the fundamental role they play in maintaining market confidence and ensuring fair and orderly markets.)

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8
Q

How many listing principles and how many premium listing principles are there?

A

2 listing principles

  1. A listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations.
  2. A listed company must deal with the FCA in an open and co-operative manner.

6 premium listing principles

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9
Q

Why do company secretaries of listed companies need to be particularly careful when assisting employees with employee share options schemes?

A

to ensure that they are not inadvertently giving investment advice.

Note - A person carrying on a regulated activity who is not authorised or not exempted commits an offence (FSMA2000 s. 20)

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10
Q

Who are usually referred to as ‘authorised’ or ‘exempt’ persons on application to the FCA?

A

Members of professional bodies such as solicitors and accountants.

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11
Q

How long before listing must the following be submitted to the issuer management team at the FCA?

  • Application for Admission of Securities to the Official List
  • prospectus or listing particulars approved by the FCA; plus supp. list if applicable
  • a circular published in connection with the application, if applicable
  • Written confirmation of the number of shares to be allotted.
  • If a prospectus or listing particulars are not required a copy of the RIS announcement detailing the number of shares to be issued and the circumstances of their issue.
A

48 HOURS

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12
Q

When must the following be submitted to the FCA?

  • shareholder statement if the class of shares is to be listed for the first time; or
  • completed pricing statement where an issue of new shares comprising a placing, open offer, vendor consideration placing, offer for subscription or an issue out of treasury.
A

ON THE DAY OF THE APPLICATION HEARING

Note - Provided all the documents can be approved, the requirements of the Listing Rules met, and the necessary fees paid, the FCA will announce its decision to admit the securities via a market announcement and admission becomes effective
at this time.

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13
Q

What ‘adviser’ is mandatory at all times for a premium listed company?

A

A sponsor

Note - the sponsor acts as the link between the company and the FCA and the LSE.

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14
Q

What role does a Corporate Broker play for a listed company?

A

The broker acts as a link between the company and investors following listing and admission to the market.

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15
Q

Who carries personal liability for false and misleading statements in prospectuses or listing particulars?

A

Directors

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16
Q

Through what system allows the share registrar of a listed company to facilitate electronic share trading and settlement activities?

A

CREST

17
Q

Who delegates UK Prospectus Regulation?

A

The FCA

18
Q

What is deemed an offer to the public under the UK Prospectus Regulation Rules (PRR)?

A

A communication to any person that presents sufficient information on the transferable securities to be offered

19
Q

In addition to a framework for the control of inside information, what should companies focus on in respect of relevant officers and employees of the company who may handle inside information?

A

Training on procedures

20
Q

As a minimum it is recommended that companies should have a disclosure manual and a checklist for identifying inside information, as well as an insider list that is kept up to date. They should also consider establishing a _____________ ____________ to review and monitor the company’s compliance with its disclosure obligations.

A

Disclosure committee

21
Q

A listed company must publish its annual financial statements within _________________ of the end of the financial year and ensure that copies of its annual report and accounts are freely available on request for a period of at least _____________ from
their original publication

A

Four months

10 years

22
Q

A listed company must put a resolution, at the same meeting convened to receive the annual accounts, approving what report?

A

Directors remuneration report

23
Q

What must a listed company do as soon as possible after the directors have approved any decision to pay a dividend or other distribution?

A

Make an annoucement via RIS

24
Q

What are the two market functions provided by the LSE?

A

Primary market to raise capital and secondary market for investors to buy and sell shares

25
Q

Why are applications to both the FCA and LSE required to list on the Main Market?

A

Application for listing is made to the FCA, admission to trading on the Main Market is made to the LSE.

26
Q

What must Auditors leaving listed companies always be required to do?
(CA2006 s. 519)

A

make a statement of the circumstances

27
Q

IN addition to filing a copy of the auditor’s resignation with Companies House, companies that constitute major audits are also required to notify what body?

A

the FRC

28
Q

What is a security?

A

A security, in a financial context, is a certificate or other financial instrument that has monetary value and can be traded

29
Q

What is inside information?

A

Inside information is information that is precise, has not been made public, relates directly or indirectly to the company and if made public is likely to have a significant effect on the price of the company’s shares or securities (that is information that a reasonable investor would be likely to use as part of the basis of their investment decisions) (MAR 7(1)
(b) to (d)).

30
Q

What is a PDMR?

A

Person discharging managerial resonsibilities:

a member of the administrative, management or supervisory body

a senior executive who is not a member of the administrative, management or supervisory body of that entity, but who has regular access to inside information relating directly or indirectly to that entity and the power to make managerial decisions affecting the future developments and business prospects of that entity.

31
Q

Are all directors PDMRs?

A

YES

32
Q

What is a PCA?

A

Person closely associated:

  • spouse or partner considered equivalent to a spouse under national law of the PDMR;
  • dependent children of the PDMR;
  • a relative of the PDMR who has shared the same residence for at least one year; and
  • any legal person, trust or partnership, the managerial duties and responsibilities of which are carried out by the
    PDMR or PCA
33
Q

A PDMR must not for themselves or for a third party, directly or indirectly, conduct any transactions in the financial
instruments of the company during a closed period.

What is a closed period?

A

A period of 30 days prior to an announcement of the company’s full or half-year financial report.

34
Q

What is the general principle behind the FCA’s DTR 5 (Disclosure TRansparency Rule)?

A

Identify who is controlling the way in which voting rights are exercised and to disclose this to the market.

35
Q

Which of the following transactions will trigger a notification obligation under DTR:

  1. Sale of shares taking a holding from 5.9% to 5.1%.
  2. Purchase of shares taking holding from 3.9% to 4.1%.
A
  1. No
  2. Yes

(percentage point thresholds)

36
Q

What is the purpose of comply or explain in terms of the UK Corporate Governance Code?

A

It is recognised that although the Code represents best practice in the field of corporate governance one size does not fit all and companies should be able to depart from the code provisions but should explain why that approach is appropriate

Company Compliance & Administration (16 decks)

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