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LR 18.1 Application

LR 18.1.1 R

1This chapter applies to:

  1. (1)

    a depositary; and

  2. (2)

    an issuer of the securities which are represented by certificates.

LR 18.2 Requirements for listing

Issuer of securities is taken to be the issuer

LR 18.2.1 R

If an application is made for the admission of certificates representing certain securities, the issuer of the securities which the certificates represent is the issuer for the purpose of the listing rules and the application will be dealt with as if it were an application for the admission of the securities.

Certificates representing certain securities

LR 18.2.2 R

For certificates representing certain securities to be admitted to listing an issuer of the securities which the certificates represent must comply with LR 18.2.3 R to LR 18.2.7 G.

LR 18.2.3 R

An issuer must be:

  1. (1)

    duly incorporated or otherwise validly established according to the relevant laws of its place of incorporation or establishment; and

  2. (2)

    operating in conformity with its constitution. [Note: Articles 42 and 52 CARD]

LR 18.2.4 R

For the certificates to be listed, the securities which the certificates represent must:

  1. (1)

    conform with the law of the issuer's place of incorporation;

  2. (2)

    be duly authorised according to the requirements of the issuer's constitution; and

  3. (3)

    have any necessary statutory or other consents. [Note: Articles 45 and 53 CARD]

LR 18.2.5 R
  1. (1)

    For the certificates to be listed, the securities which the certificates represent must be freely transferable. [Note: Articles 46, 54 and 60 CARD]

  2. (2)

    For the certificates to be listed, the securities which the certificates represent must be fully paid and free from all liens and from any restriction on the right of transfer (except any restriction imposed for failure to comply with a notice under section 793 of the Companies Act 2006 (Notice by company requiring information about interests in its shares)).1

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LR 18.2.6 G

The FCA may modify LR 18.2.5 R to allow partly paid securities if it is satisfied that their transferability is not restricted and investors have been provided with appropriate information to enable dealings in the securities to take place on an open and proper basis. [Note: Articles 46 and 54 CARD]

LR 18.2.7 G

The FCA may, in exceptional circumstances, modify or dispense with LR 18.2.5 R where the issuer has the power to disapprove the transfer of securities if the FCA is satisfied that this power would not disturb the market in those securities.

Certificates representing equity securities of an overseas company

LR 18.2.8 R
  1. (1)

    If an application is made for the admission of a class of certificates representing shares of an overseas company, a sufficient number of certificates must, no later than the time of admission, be distributed to the public in one or more EEA States.

  2. (2)

    For the purposes of paragraph (1), account may also be taken of holders in one or more states that are not EEA States, if the certificates are listed in the state or states.

  3. (3)

    For the purposes of paragraph (1), a sufficient number of certificates will be taken to have been distributed to the public when 25% of the certificates for which application for admission has been made are in public hands.

  4. (4)

    For the purposes of paragraphs (1), (2) and (3), certificates are not held in public hands if they are:5

    1. (a)

      held, directly or indirectly by:5

      5
      1. (i)

        a director of the applicant or of any of its subsidiary undertakings; or

      2. (ii)

        a person connected with a director of the applicant or of any of its subsidiary undertakings; or

      3. (iii)

        the trustees of any employees' share scheme or pension fund established for the benefit of any directors and employees of the applicant and its subsidiary undertakings; or

      4. (iv)

        any person who under any agreement has a right to nominate a person to the board of directors of the applicant; or

      5. (v)

        any person or persons in the same group or persons acting in concert who have an interest in 5% or more of the certificates of the relevant class.

    2. (b)

      subject to a lock-up period of more than 180 calendar days.5

      5
LR 18.2.9 G

The FCA may modify LR 18.2.8 R to accept a percentage lower than 25% if it considers that the market will operate properly with a lower percentage in view of the large number of certificates of the same class and the extent of their distribution to the public. For that purpose, the FCA may take into account certificates of the same class that are held (even though they are not listed) in states that are not EEA States. 1[Note: Article 48 CARD]

LR 18.2.9A G

5When calculating the number of certificates for the purposes of LR 18.2.8R (4)(a)(v), holdings of investment managers in the same group where investment decisions are made independently by the individual in control of the relevant fund and those decisions are unfettered by the group to which the investment manager belongs will be disregarded.

LR 18.2.10 R

[deleted]3

3

Certificates representing securities of an investment entity.

LR 18.2.10A R

2Certificates representing equity securities of an investment entity (wherever incorporated or established) will be admitted to listing only if the equity securities they represent are already listed or are the subject of an application for listing at the same time.

Additional requirements for the certificates

LR 18.2.11 R

To be listed, the certificates representing certain securities must satisfy the requirements set out in LR 2.2.2 R to LR 2.2.11 R. For this purpose, in those rules references to securities are to be read as references to the certificates representing certain securities for which application for listing is made.

LR 18.2.12 R

To be listed, the certificates representing certain securities must not impose obligations on the depositary that issues the certificates except to the extent necessary to protect the certificate-holders rights to, and the transmission of entitlements of, the securities.

Additional requirements for a depositary

LR 18.2.13 R

[deleted]4

4
LR 18.2.14 R

A depositary that issues certificates representing certain securities must maintain adequate arrangements to safeguard certificate holders' rights to4 the securities to which the certificates relate, and to4 all rights relating to the securities and all money and benefits that it may receive in respect of them, subject only to payment of the remuneration and proper expenses of the issuer of the certificates.

4

LR 18.3 Listing applications

LR 18.3.1 R

An applicant for admission of certificates representing certain securities must comply with LR 3.2 and LR 3.4.4 R to LR 3.4.8 R1subject to the following modifications.

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LR 18.3.1A R

1An applicant for admission of certificates representing certain securities must submit a letter to the FCA setting out how it satisfies the requirements in LR 2 and LR 18.2 no later than when the first draft of a prospectus for the certificates is submitted, or if the FCA is not approving a prospectus, at a time agreed with the FCA.

LR 18.3.2 R
1

1In addition to the documents referred to in LR 3.4.6 R, an applicant for admission of certificates representing certain securities must keep a copy of the executed deposit agreement for six years after the admission of the relevant certificates.1

LR 18.3.3 G

[deleted]1

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LR 18.4 Continuing obligations

LR 18.4.1 R

An issuer of debt securities which the certificates represent must comply with the continuing obligations set out in LR 17.3 (Requirements with continuing application) in addition to the requirements of this section.

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LR 18.4.2 R

A UKissuer of equity shares which the certificates represent must comply with the continuing obligations set out in LR 9 (Continuing obligations) in addition to the requirements of this section.

LR 18.4.3 R

An overseas company that is the issuer of the equity shares which the certificates represent must comply with:

  1. (1)

    the requirements of this section;

  2. (2)

    the continuing obligations set out in LR 14.3 (Continuing obligations) (other than in LR 14.3.2 R and LR 14.3.15 R), LR 18.2.8 R3 and LR 18.4.3A R2; and

    1
  3. (3)

    the obligations in articles 17 and 18 of the Market Abuse Regulation4 as if it were an issuer for the purposes of those obligations and4 the transparency rules, subject to article 22 of the Market Abuse Regulation4.

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2Annual accounts continuing obligations

LR 18.4.3A R
  1. (1)

    2An issuer within LR 18.4.3 R must publish its annual report and annual accounts as soon as possible after they have been approved.

  2. (2)

    An issuer within LR 18.4.3 R must approve and publish its annual report and accounts within six months of the end of the financial period to which they relate.

  3. (3)

    The annual report and accounts must:

    1. (a)

      have been prepared in accordance with the issuer's national law and, in all material respects, with national accounting standards or IAS; and

    2. (b)

      have been independently audited and reported on, in accordance with:

      1. (i)

        the auditing standards applicable in an EEA State; or

      2. (ii)

        an equivalent auditing standard.

LR 18.4.3B R

3For the purposes of LR 18.4.3R (2), a reference to complying with the obligations in LR 14.3 is to be read as a reference to complying with those obligations in respect of the certificates.

Change of depositary

LR 18.4.4 R

Prior to any change of the depositary of certificates representing certain securities, the new depositary must satisfy the FCA that it meets the requirements of LR 18.2.11 R to LR 18.2.14 R.

Notification of change of depositary

LR 18.4.5 R
  1. (1)

    An issuer of securities represented by listedcertificates representing certain securities must notify a RIS of any change of depositary.

  2. (2)

    The notification required by paragraph (1) must be made as soon as possible, and in any event by 7.30 a.m. on the business day following the change of depositary, and contain the following information:

    1. (a)

      the name, registered office and principal administrative establishment if different from the registered office of the depositary;

    2. (b)

      the date of incorporation and length of life of the depositary, except where indefinite;

    3. (c)

      the legislation under which the depositary operates and the legal form which it has adopted under the legislation; and

    4. (d)

      any changes to the information regarding the certificates representing certain securities.

Documents of title

LR 18.4.6 R

An issuer must comply with the requirements in LR 9.5.15 R (Temporary documents of title) and LR 9.5.16 R (Definitive documents of title) so far as relevant to certificates representing equity securities.

Compliance with Transparency Rules

LR 18.4.7 G

1An issuer, whose securities are admitted to trading on a regulated market, should consider its obligations under DTR 4 (Periodic financial reporting), DTR 5 (Vote holder and issuer notification rules) and DTR 6 (Access to information).

LR 18.4.8 R

1[18.4.8 to follow]

LR 18.4.9 R

1An issuer that is not already required to comply with the transparency rules must comply with DTR 6.3 as if it were an issuer for the purposes of the transparency rules.