Strategic Review of UK Capital Markets

In connection with its review of the UK listing regime described above, the FCA made a few modifications to the continuing obligations of noted business, all of which became effective on 29 July 2024 with the adoption of the UKLR sourcebook. In connection with the collapse of the previous premium and standard listing sections into the brand-new business company classification, the Listing Concepts (set out in UKLR 2) were streamlined to need industrial companies to: develop and preserve appropriate procedures, systems and controls to enable them to adhere to their commitments under the UKLR (Concept 1); offer with the FCA in an open and co-operative way (Concept 2); take affordable actions to enable its directors to understand their duties and commitments as directors (Concept 3); show integrity towards the holders and possible holders of its listed securities (Principle 4); ensure that it treats all holders of the very same class of its listed securities that remain in the same position similarly in regard of the rights connecting to those noted securities (Principle 5); andcommunicate information to holders and prospective holders of its listed securities in such a way as to avoid the production or continuation of an incorrect market in those noted securities (Concept 6).

As part of the consultation on modifications to the UK listing program, the choice was taken to maintain the role of sponsor. Since of the lighter-touch policy of the brand-new business company category (especially a relaxation of shareholder approval requirements for significant and associated party deals as described below), a sponsor is now just required to be selected: in the context on an IPO, where a business is seeking admission for the very first time; in the context of a significant or related celebration transaction, where a demand is made to the FCA for individual assistance or modification or waiver of the guidelines in UKLR 7 or UKLR 8; in the context of an associated party transaction, to verify the transaction is "fair and sensible"; in the context of a reverse takeover, to supply assistance and submit a circular and prospectus; where needed by the FCA due to a breach (or presumed breach) of the UKLR or DTR sourcebooks; for particular transfers between listing categories; andin the context of additional share issuances, if a listed company is needed to send a document such as a prospectus to the FCA for approval.

ANSR July UK PRs

Appropriately, under UKLR 7, commercial business are needed to make a market announcement as soon as possible after the regards to a considerable transaction (25%+ on any one of the class tests (factor to consider, possessions and capital), excluding transactions in the ordinary course of company) are concurred. No announcement requirements are prescribed for deals below that threshold, but the requirements of the UK Market Abuse Guideline (UK MAR) use.

When it comes to a disposal, the statement must likewise consist of particular monetary details. There is likewise an overarching catch-all responsibility to reveal any other appropriate circumstances or details required to enable shareholders to assess the terms and impact of the transaction. No shareholder approval or circular requirements use to a significant deal, nor exists any requirement to designate a sponsor (conserve where assistance, waiver or adjustments from the FCA are looked for).

ANSR July UK PRs

Top Investment Insights for UK Enterprises

Under UKLR 7.5, reverse takeovers (100%+ on any one of the class tests (factor to consider, possessions and capital)) continue to need a market statement, an FCA-approved circular and investor approval. Sponsor guidance must be gotten if a company is proposing to get in into a deal which could amount to a reverse takeover and one must be appointed in regard of the circular and any re-admission prospectus.

Accordingly, under UKLR 8, for transactions involving an associated party (for example, a 20% shareholder or current/former director) which exceed the 5% class test limit (leaving out transactions in the normal course of company), the following requirements apply: board approval of the transaction, leaving out any conflicted directors; composed confirmation from a sponsor that the transaction terms are "reasonable and reasonable"; anda market statement as soon as possible after the deal terms are concurred which must consist of, amongst other requirements, a "fair and reasonable" declaration by the board.

ANSR July UK PRs

The UK Secondary Capital Raising Review, led by Mark Austin MBE, was released in October 2021 to examine improving additional capital raising procedures for noted companies in the UK (read our summary here). The findings of the review were published in July 2022 and included a number of recommendations to the government, the FCA and the Pre-Emption Group (PEG). PEG reacted and welcomed the suggestions, consequently issuing an upgraded version of its Statement of Concepts on 4 November 2022.