UK Listing Authority and prospectus requirements

Question 1

What is a Public Company and the advantage of being public

Answer 1

Those that seek finance from investing public

Attractive to list a public company on LSE since the shares are freely marketable

Question 2

Role of Listing Authority and Official List

Answer 2

If a public company wants to raise capital by listing on the LSE, the FCA is the ‘competent’ or ‘listing authority’ who can add them to the Official List assuming they satisfy listing rules

The power to create these rules comes from ‘Financial Services and Markets Act 2000’

Question 3

Types of Listing

Answer 3

Premium
- company must meet standards above and beyond those set out in EU Directive.

• Only available for for commercial trading companies, open-ended investment companies and closed-ended investment funds
• only premium listing are eligible for FTSE indices m this is important for companies seeking liquidity since tracker funds invest

Standard
- company only meets requirements of EU legislation, has lighter listing and ongoing requirements - standard shares

Question 4

Prospectus and Listing Particulars

Answer 4

Prospectus - required when an application for listing is made and securities will be offered to public before admission.

When not offered to the public before admission, Listing Particulars are needed

Both must be approved by listing authority and Published

Question 5

Prospective Directive and Passport

Answer 5

Requires the publication of a prospectus when securities are admitted onto a regulated market in EU.

Companies get a ‘passport’ allowing them to raise capital in any EU member state with a prospectus in one member state

Question 6

Conditions for Listing

Answer 6

Standard

• aggregate market value of securities £700,000 (shares) £200,000 (debt)
• 25% of securities must be held by public by date of admission

Premium

• published accounts of last 3 years
• sufficient working capital to cover next 12 months
• requires a sponsor

Question 7

Listing on AIM

Answer 7

AIM is not a EU market and is classified as an MTF

Must have a nominated adviser (NOMAD) from approved register and an admission document

Required to disclose financial performance through interim and full year results, as well as developments which may affect financial performance

Question 8

High Growth Segment (HGS) and criteria

Answer 8

Designed to attract mid sized UK/EU companies aspiring for Official Listing.

• Incorporated in EEA
• Issue equity shares only
• Minimum free float of 10% at IPO
• CAGR of 20% over three years

Question 8

Listing on NEX

Answer 8

Next Exchange Main Board requires same eligibility as Official List with standard and premium listings

Further requirement to get on NEX Exchange Growth Market

Question 10

Exemptions from Listing Particulars

Answer 10

1. Offer is made to qualified investors
2. Offer made to <150 persons per EEA state
3. Minimum consideration per investor is equal to or >€100,000
4. Where total consideration is