Listing Rules & UK Corporate Governance Code Flashcards
(19 cards)
Who regulates listed companies
UKLA - United Kingdom Listing Authority
FSMA 2000 (S572) FCA
Part 6 Rules or UKLA Rules
1- Listing Rules
2- Prospectus Regulation Rules
3- Disclosure Guidance and Transparency Rules
other points to consider
- conditions for admission to listing
- continuing obligations
- Compliance with Corporate Governance code
- listing principles
FCA Rename UKLA
FCA Primary Market Function
LSE & AIM
LSE - official list = known as listed
AIM ( Alternate Investment market ) - smaller start up = known as quoted
AIM not regulated - regulated by operator LSE
Standard Listing Principles
Apply to all listed companies - only with EU minimum standards
1) Adequate procedures, systems and controls for compliance
2) Cooperation with FCA
Premium Listing Principles
Apply to all premium listed companies
1) Appropriate understanding on part of directors
2) integrity towards holders + potential holders of premium listed shares
3) Equal number of votes for shares in each class of listed shares
4) Diff classes of listed shares have proportionate voting rights
5) Holders of listed shares to be treated equally
6) Disclose info to avoid false markets
Corporate Governance
Structure of rules, practices and processes used to direct and manage a company
- systems how company is directed and controlled
- processes by which objectives established, achieved monitored for company
- relationships and responsibilities between directors, managers, shareholders and other relevant stakeholders
Purpose of Corporate Governance
Sets out standards of good practice in relation to;
- Board Composition and development
- Accountability and leadership of directors
- Remuneration of directors
- Controls and audit
- Relations with shareholders
Who does corporate governance code apply to
All companies with a premium listing of equity shares
Common platform firms
Who responsible for the code
FRC (Financial Reporting Council) - text, interpretation and development of code
FCA - day to day supervision of listed companies
Corporate Governance code structure
Section A - Leadership
Section B - Effectiveness
Section C - Accountability
Section D - Remuneration
Section E - Relations with shareholders
Disclosure requirements
Companies subject to code are required to make a two part disclosure in annual reports
Statement how applied main principles set out in code
Statement whether has complied with all code provisions
and if not;
what provisions and reasoning
Climate Financial Risk Forum
Providing research
Climate change Presents financial risk and opportunities relevant to firms and objectives of FCA and PRA
Objective build capacity share best practice across financial regulators and firms
Good responses -bringing senior representatives
ESG Factors
Environmental
Social
Governance
CFRF Guide
Good practice guidelines
Guide to climate related - financial risk management Risk management Scenario analysis Disclosures Innovation
Regulated Markets
Markets that comply with requirements for regulated markets under MIFID
a multilateral system operated or managed by market operator, which brings together multiple third party buying and selling interests in financial instruments
Recognised Investment Exchange (RIEs)
Investment exchange which is considered by the FCA to be fit and proper
subject to FCA supervision and oversight
is not required to be authorised
LSE example - both regulated market + MTF
Multilateral Trading Facilities (MTF)
Brings together multiple parties that are interested in buying and selling. Operated by investment firm or a market operator.
Bloomberg example
Organised Trading Facilities (OTFs)
Multilateral system that is not regulated market or MTF
Bonds, derivates, structured finance products
Equities are not permitted
Bring together third parties buying and selling resulting in contracts.
Clear rules and processes on trading under mifid
