Top Investment Insights for UK Enterprises

One of the key changes made to the regime was to collapse the previous premium and basic listing sectors of the managed market into a flagship single listing classification for Equity Shares in Industrial Companies (ESCC), referred to as the "commercial company" classification. Whilst the objective was to introduce lighter-touch regulation for the industrial company classification (compared with the previous premium listing section) the new rules still represented an action up from the previous standard listing requirements.

The transition category is closed to new applicants and to transfers from other classifications. The FCA has not yet set a particular end date for the transition category, but this will be kept under review. The crucial provisions of the UKLR sourcebook for industrial business are set out in the table listed below: Secret contents of the UKLR sourcebook for business companiesUKLR 1Preliminary: all securitiesThe FCA can ignore specific UKLR requirements as it thinks about appropriate.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Principles need companies to, to name a few, develop and maintain sufficient procedures, systems and controls to allow them to abide by their responsibilities under the UKLR (Noting Principle 1) and deal with the FCA in an open and co-operative way (Listing Concept 2). UKLR 3Requirements for listing: all securitiesShares need to be easily transferable, completely paid and totally free from all restrictions on the right to transfer.

UKLR 5Equity shares (industrial companies): requirements for admission to listingAt least 10% of shares of the listed class must be dispersed to the public (i.e.

A company must adopt a constitution enabling it to comply with the UKLR. UKLR 6Equity shares (business companies): continuing obligationsCommercial companies are subject to continuing responsibilities, including: yearly reporting requirements (including compliance with the UK Corporate Governance Code, or an explanation in the event of non-compliance); compliance with environment and diversity disclosure requirements; and market statement requirements.

The significant deal announcement must consist of defined details, consisting of: the advantages and risks of the deal; a declaration on the effect of the transaction on the group's revenues, possessions and liabilities; details of any break charge; a "benefits" declaration by the board; and any other pertinent info required to support shareholder engagement and market openness.

UKLR 9Equity shares (commercial business): additional issuances, dealing in own securities and treasury sharesPre-emption rights use to the business's noted shares. UKLR 21Suspending, cancelling, restoring listing and transfer between listing classifications: all securitiesThe FCA may suspend the listing of a company's securities if the smooth operation of the market is, or might be, momentarily jeopardised or it is necessary to safeguard investors.

Scaling IT Transformation for Global Success

In addition to the brand-new business company category, the FCA also created new classifications for international secondary listings (UKLR 14) and shell companies (UKLR 13). For shell companies and SPACs, in the UKLR, the FCA mainly kept the rules that had actually applied to the previous standard listing sector, with improved eligibility requirements setting time frame within which initial deals should be finished by SPACs.

ANSR July UK PRs

In addition, the FCA went back to a guidance-based approach permitting larger SPACs to willingly put in place enough financier securities to avoid a presumption of suspension of listing as and when a preliminary deal is revealed. Ahead of publication of the UKLR and to offer impact to the suggestions coming out of Lord Hill's evaluation, the FCA executed particular changes to eligibility criteria set out in the then Noting Guidelines with effect from completion of December 2021, significantly to reduce the free float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization limit for premium and standard listing sections from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made more changes to eligibility requirements including the adoption of a single set of Noting Principles (to reflect the collapse of the previous premium and basic listing segments into a single commercial business classification) and removed the previous premium listing requirements for a three-year revenue track record and "clean" working capital declaration.