Module 7 Flashcards
Advantages of being listed?
- raise finance
- status
- higher profile
- exit for shareholders
Disadvantages of being listed?
- cost
- scrutiny
- responsibilities
- dilution
What is a premium listing?
equity securities only -onerous
What is a standard listing?
both equity and debt. can be a stepping stone
What is a high growth segment?
for fast growing revenue generating businesses who want to progress to premium listing
What is a specialist fund segment?
highly specialised investment entities targeting institutional or highly knowledgeable investors
What are the requirements to pursue a premium or standard listing?
Minimum market cap of any equity issue is 700,000
at least 25% must be held by the public
Do premium or standard listings require audited financial info?
premium- 3 years
standard- 3 years, or shorter if company hasn’t lasted 3 years
Can premium or standard be part of indices?
premium - can be listed on the FTSE
standard- can’t be
Do premium or standard require sponsors?
premium - yes
standard- no
Do premium or standard have corporate governance requirements?
premium - UK corporate governance code
STAndard - corporate governance STAtements
Do premium or standard have rules on transactions?
premium - class test ratios standard - no
Do premium or standard require shareholder approval for transfer between listing categories or cancellation?
premium- 75% shareholder approval
standard - no
What is the alternative investment market?
the LSE’s public market for small, young and growing companies. Can be a stepping stone towards a full listing
What are the requirements of the AIM?
- be legally established and be a public company
- publish accounts
- have a nominated advisor (NOMAD)
- have a broker
What is a NOMAD?
must be approved by LSE
they carry out due diligence, prepare listing, makes sure company understands, provide advice
What is a broker?
they have the responsibility of promoting and facilitating trade. must be retained and must be a member of the exchange.
What are the two steps to be admitted to the Main market or AIM?
- Lse must admit a companies securities
- UK listing authority admits securities to official list
What are the FCAs eligibility for listing?
- must be public with public accounts for three years
- must be revenue generating with sufficient working capital for the next 12 months
- whole class must be listed
- must be freely transferrable
- market cap more than 700,000
- 25% must be in public hands
- warrants and options must not exceed 20%
- convertible must be converted into listed or capable of being listed
- electronic settlement
What is a sponsor?
advisor needed for companies with a premium listing, must be approved by FAC and be independent.
When must premium companies publish accounts?
-annually and interim
What should be included in a prospectus?
summary
registration document
-securities note
When is a long form report required?
there are no specific regulations that require one
BUT a sponsor will ask for one when pursuing a PREMIUM listing
When is a short form report or accountants report required?
in certain circumstances such as where there has been a material change to group structure or a qualified audit report in the last three years.
What must be disclosed to the public?
- inside information on website for 1 year
- insider list which must be reported to FCA if requested
What does the Market abuse regulation deal with?
brings AIM in line with main market
rules around disclosure
insider lists
-closed period where directors can’t deal in shares.
