Chapter 8 - Securities Exchange Listing Regime

Question 1

What are the two market functions provided by the LSE?

Answer 1

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

Question 2

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

Answer 2

Application for listing is made to the UKLA, admission to trading on the Main Market is made to the LSE. The Main Market although the largest is not the only market where listed shares can be admitted and traded

Question 3

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%.
3. Company purchasing and cancelling shares held by shareholder A resulting in shareholder B’s holding increasing from 2.9% to 3.0%.
4. Sale of shares taking a holding from 5.1% to 4.9%.

Answer 3

1. Sale of shares taking a holding from 5.9% to 5.1%.
   No
2. Purchase of shares taking holding from 3.9% to 4.1%.
   Yes
3. Company purchasing and cancelling shares held by shareholder A resulting in shareholder B’s holding increasing from 2.9% to 3.0%.
   Yes
4. Sale of shares taking a holding from 5.1% to 4.9%.
   Yes

Question 4

What is the purpose of comply or explain?

Answer 4

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