The UK Listing Authority

Question 1

Define public companies

Answer 1

1. These are companies that seek finance from the investing public (private companies are forbidden to raise capital this way)
2. They also wish to have their securities listed on the London stock exchange
3. They need to comply with the stock exchange rules
4. Their shares are freely marketable, making them attractive to invest investors

Question 2

In the UK, who is the listing authority?

Answer 2

1. FCA also known as a financial conduct authority
2. They decide on the admission of securities to the official list based on some listing rules.
3. Power to create the rules comes from the “Financial Services and Markets Act 2000”
4. The listing rules also implement various EU directives. These are “Prospectus Directive” and “Transparency Directive”

Question 3

Briefly explain what a premium listing is

Answer 3

1. Used by large firms that want to benefit from an increased profile and a highly liquid market.
2. It’s only available to equity shares issued by commercial trading companies, OEICs and close-ended investment funds

Question 4

Briefly explain what a standard listing is

Answer 4

1. For firms that meet the minimum requirements laid down by listing regulations.
2. Overall compliance responsibilities are lighter.
3. They cover insurance of shares and depository receipts.