Optimizing IT Transformation for British Firms

Among the essential modifications made to the regime was to collapse the previous premium and standard listing sectors of the regulated market into a flagship single listing category for Equity Shares in Business Companies (ESCC), described as the "commercial business" classification. Whilst the objective was to introduce lighter-touch policy for the commercial business category (compared to the previous premium listing sector) the new guidelines 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 specific end date for the shift category, but this will be kept under evaluation. The essential provisions of the UKLR sourcebook for commercial 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 considers proper.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Principles need business to, amongst others, develop and keep appropriate treatments, systems and controls to allow them to abide by their commitments under the UKLR (Noting Principle 1) and handle the FCA in an open and co-operative manner (Listing Principle 2). UKLR 3Requirements for listing: all securitiesShares must be freely transferable, fully paid and complimentary from all constraints on the right to move.

UKLR 5Equity shares (industrial business): requirements for admission to listingAt least 10% of shares of the noted class needs to be distributed to the public (i.e.

A business should adopt a constitution enabling it to comply with the UKLR. UKLR 6Equity shares (business companies): continuing obligationsCommercial companies are subject to continuing obligations, including: yearly reporting requirements (including compliance with the UK Corporate Governance Code, or a description in the occasion of non-compliance); compliance with climate and diversity disclosure requirements; and market announcement requirements.

The substantial deal statement should include specified information, including: the advantages and dangers of the transaction; a declaration on the effect of the transaction on the group's incomes, properties and liabilities; information of any break cost; a "benefits" statement by the board; and any other appropriate details required to support investor engagement and market transparency.

UKLR 9Equity shares (commercial companies): more issuances, handling own securities and treasury sharesPre-emption rights apply to the business's noted shares. Particular rules use in relation to rights issues, open offers and placings (and a maximum 10% discount applies to open deals and placements). UKLR 10Equity shares (commercial business): content of circularsShareholder circulars should abide by particular content requirements, and circulars in relation to specific deals (including a reverse takeover) needs to be authorized by the FCA.UKLR 20Admission to listing: processes and proceduresSpecific procedural and documentary requirements are set out in relation to an application for listing of securities (consisting of the submission timing of using documents to the FCA). UKLR 21Suspending, cancelling, restoring listing and transfer between listing classifications: all securitiesThe FCA might suspend the listing of a business's securities if the smooth operation of the marketplace is, or might be, momentarily jeopardised or it is required to secure investors.

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In addition to the new business company classification, the FCA also developed brand-new classifications for worldwide secondary listings (UKLR 14) and shell companies (UKLR 13). For shell business and SPACs, in the UKLR, the FCA largely preserved the rules that had actually used to the previous basic listing sector, with improved eligibility requirements setting time limitations within which preliminary transactions must be finished by SPACs.

ANSR July UK PRs

In addition, the FCA went back to a guidance-based approach permitting larger SPACs to voluntarily put in location sufficient investor securities to avoid an anticipation of suspension of listing as and when a preliminary transaction is announced. Ahead of publication of the UKLR and to offer effect to the recommendations coming out of Lord Hill's review, the FCA carried out certain changes to eligibility criteria set out in the then Listing Rules with effect from completion of December 2021, significantly to lower the totally free float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization limit for premium and basic listing sections from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made further changes to eligibility requirements including the adoption of a single set of Listing Principles (to reflect the collapse of the previous premium and standard listing sectors into a single business company category) and got rid of the previous premium listing requirements for a three-year earnings performance history and "clean" working capital statement.