Module 7

Question 1

Advantages of being listed?

Answer 1

• raise finance
• status
• higher profile
• exit for shareholders

Question 2

Disadvantages of being listed?

Answer 2

• cost
• scrutiny
• responsibilities
• dilution

Question 3

What is a premium listing?

Answer 3

equity securities only -onerous

Question 4

What is a standard listing?

Answer 4

both equity and debt. can be a stepping stone

Question 5

What is a high growth segment?

Answer 5

for fast growing revenue generating businesses who want to progress to premium listing

Question 6

What is a specialist fund segment?

Answer 6

highly specialised investment entities targeting institutional or highly knowledgeable investors

Question 7

What are the requirements to pursue a premium or standard listing?

Answer 7

Minimum market cap of any equity issue is 700,000

at least 25% must be held by the public

Question 8

Do premium or standard listings require audited financial info?

Answer 8

premium- 3 years

standard- 3 years, or shorter if company hasn’t lasted 3 years

Question 9

Can premium or standard be part of indices?

Answer 9

premium - can be listed on the FTSE

standard- can’t be

Question 10

Do premium or standard require sponsors?

Answer 10

premium - yes

standard- no

Question 11

Do premium or standard have corporate governance requirements?

Answer 11

premium - UK corporate governance code

STAndard - corporate governance STAtements

Question 12

Do premium or standard have rules on transactions?

Answer 12

premium - class test ratios
standard - no

Question 13

Do premium or standard require shareholder approval for transfer between listing categories or cancellation?

Answer 13

premium- 75% shareholder approval

standard - no

Question 14

What is the alternative investment market?

Answer 14

the LSE’s public market for small, young and growing companies. Can be a stepping stone towards a full listing

Question 15

What are the requirements of the AIM?

Answer 15

• be legally established and be a public company
• publish accounts
• have a nominated advisor (NOMAD)
• have a broker

Question 16

What is a NOMAD?

Answer 16

must be approved by LSE

they carry out due diligence, prepare listing, makes sure company understands, provide advice

Question 17

What is a broker?

Answer 17

they have the responsibility of promoting and facilitating trade. must be retained and must be a member of the exchange.

Question 18

What are the two steps to be admitted to the Main market or AIM?

Answer 18

• Lse must admit a companies securities

- UK listing authority admits securities to official list

Question 19

What are the FCAs eligibility for listing?

Answer 19

• 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

Question 20

What is a sponsor?

Answer 20

advisor needed for companies with a premium listing, must be approved by FAC and be independent.

Question 21

When must premium companies publish accounts?

Answer 21

-annually and interim

Question 22

What should be included in a prospectus?

Answer 22

summary
registration document
-securities note

Question 23

When is a long form report required?

Answer 23

there are no specific regulations that require one

BUT a sponsor will ask for one when pursuing a PREMIUM listing

Question 24

When is a short form report or accountants report required?

Answer 24

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.

Question 25

What must be disclosed to the public?

Answer 25

• inside information on website for 1 year

- insider list which must be reported to FCA if requested

Question 26

What does the Market abuse regulation deal with?

Answer 26

brings AIM in line with main market
rules around disclosure
insider lists
-closed period where directors can’t deal in shares.