LR 21.6 Requirements for listing: Certificates representing shares

Issuer of equity shares is taken to be the issuer

LR 21.6.1R

1If an application is made for the admission of certificates representing shares:

  1. (1)

    the issuer of the equity shares which the certificates represent is the issuer for the purpose of the listing rules; and

  2. (2)

    the application will be dealt with as if it were an application for the admission of the equity shares.

Certificates representing shares

LR 21.6.2R

1For certificates representing shares to be admitted to listing, an issuer of the equity shares which the certificates represent must comply with LR 21.6.3R to LR 21.6.8R.

LR 21.6.3R

1An 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: article 42 of CARD]

LR 21.6.4R

1For the certificates to be listed, the equity shares 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: article 45 of CARD]

LR 21.6.5R
  1. (1)

    1For the certificates to be listed, the equity shares which the certificates represent must be freely transferable.

[Note: article 46 of CARD]

  1. (2)

    For the certificates to be listed, the equity shares 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)).

LR 21.6.6G

1The FCA may modify LR 21.6.5R to allow partly paid equity shares if it is satisfied that their transferability is not restricted and investors have been provided with appropriate information to enable dealings in the equity shares to take place on an open and proper basis.

[Note: article 46 of CARD]

LR 21.6.7G

1The FCA may, in exceptional circumstances, modify or dispense with LR 21.6.5R where the issuer has the power to disapprove the transfer of equity shares if the FCA is satisfied that this power would not disturb the market in those equity shares.

LR 21.6.8R
  1. (1)

    1For the certificates to be listed, the applicant must demonstrate that the rights attaching to the equity shares which the certificates represent are capable of being exercised by the holders of the certificates as if they were the holders of the relevant equity shares.

  2. (2)

    For the certificates to be listed, the applicant must demonstrate that it has arrangements in place which enable the holders of the certificates to exercise the rights attaching to the equity shares which the certificates represent as if they were the holders of the relevant equity shares.

Additional requirements for the issuer

LR 21.6.9R

1For certificates representing shares to be admitted to listing, an issuer must comply with:

  1. (1)

    LR 6 (Additional requirements for premium listing (commercial company)) except LR 6.1.1R and LR 6.14.1R to LR 6.15.1R and subject to the modifications and additional requirements set out in LR 21.6.10G to LR 21.6.13R; and

  2. (2)

    LR 21.6.14R to LR 21.6.21R.

LR 21.6.10G

1For the purposes of LR 21.6.9R(1), in LR 6.4.3G factors that may indicate that an applicant does not satisfy LR 6.4.1R also include situations where an applicant has granted or may be required to grant security over its business in connection with the funding of a sovereign controlling shareholder.

LR 21.6.11R

1For the purposes of LR 21.6.9R(1), in LR 6.5 references to a controlling shareholder must be read as excluding a sovereign controlling shareholder.

LR 21.6.12R

1For the purposes of LR 21.6.9R(1), references to shares or equity shares must be read as references to certificates representing shares in the following:

  1. (1)

    LR 6.3.2G(2);

  2. (2)

    LR 6.4.2G;

  3. (3)

    LR 6.5.2G;

  4. (4)

    LR 6.6.2G;

  5. (5)

    LR 6.7.1R;

  6. (6)

    LR 6.10.1R;

  7. (7)

    LR 6.10.2R;

  8. (8)

    LR 6.10.3R(1);

  9. (9)

    LR 6.11.1R; and

  10. (10)

    LR 6.12.1R.

LR 21.6.13R

1LR 21.6.9R(1) does not apply where:

  1. (1)

    the applicant meets the following conditions:

    1. (a)

      it has an existing premium listing (sovereign controlled commercial company) of certificates representing shares;

    2. (b)

      it is applying for the admission of certificates representing shares of the same class as the certificates that have been admitted to premium listing; and

    3. (c)

      it is not entering into a transaction classified as a reverse takeover; or

  2. (2)

    the following conditions are met:

    1. (a)

      a company has an existing premium listing (sovereign controlled commercial company) of certificates representing shares;

    2. (b)

      the applicant is a new holding company of the company in (a); and

    3. (c)

      the company in (a) is not entering into a transaction classified as a reverse takeover.

LR 21.6.14R

1If the prospectus or listing particulars for the certificates representing shares that are being admitted does not include a working capital statement which demonstrates that LR 6.7.1R is satisfied, then:

  1. (1)

    an applicant must prepare and publish a working capital statement which demonstrates that LR 6.7.1R is satisfied;

  2. (2)

    the working capital statement required by paragraph (1) must be prepared in accordance with item 3.1 of Annex 3 of the PD Regulation; and

  3. (3)

    the working capital statement required by paragraph (1) must be published at the same time as the prospectus or listing particulars, as applicable.

LR 21.6.15R

1A working capital statement published for the purposes of LR 21.6.14R must be published by means of a RIS.

LR 21.6.16R
LR 21.6.17R

1To comply with LR 21.6.16R, a State which is a sovereign controlling shareholder must be either:

  1. (1)

    recognised by the government of the UK as a State at the time the application is made; or

  2. (2)

    the UK.

Certificates in public hands

LR 21.6.18R
  1. (1)

    1If an application is made for the admission of a class of certificates representing shares, 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:

    1. (a)

      held directly or indirectly by:

      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; or

    2. (b)

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

[Note: article 48 of CARD]

LR 21.6.19G
  1. (1)

    1The FCA may modify LR 21.6.18R 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.

    [Note: article 48 of CARD]

  2. (2)

    In considering whether to grant a modification, the FCA may take into account the following specific factors:

    1. (a)

      certificates of the same class that are held (even though they are not listed) in states that are not EEA States;

    2. (b)

      the number and nature of the public holders of certificates; and

    3. (c)

      in relation to premium listing (sovereign controlled commercial company) whether the expected market value of the certificates in public hands at admission exceeds £100 million.

LR 21.6.20G

1When calculating the number of certificates for the purposes of LR 21.6.18R(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.

Certificates of a non-EEA company

LR 21.6.21R

1The FCA will not admit certificates representing shares of an applicant incorporated in a non-EEA State where the class of equity shares which the certificates represent is not listed either in its country of incorporation or in the country in which a majority of its equity shares are held, unless the FCA is satisfied that the absence of listing is not due to the need to protect investors.

[Note: article 51 of CARD]

Additional requirements for the certificates

LR 21.6.22R
  1. (1)

    1To be listed, the certificates representing shares must satisfy the requirements set out in LR 2.2.2R and LR 2.2.4R to LR 2.2.11R.

  2. (2)

    For this purpose, in those rules references to securities must be read as references to the certificates representing shares for which application for listing is made.

LR 21.6.23R

1To be listed, the certificates representing shares must be admitted to trading on a regulated market for listed securities operated by a RIE.

LR 21.6.24R

1To be listed, the certificates representing shares 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 equity shares.

Additional requirements for a depositary

LR 21.6.25R

1A depositary that issues certificates representing shares must maintain adequate arrangements to safeguard certificate holders’ rights to the equity shares to which the certificates relate, and to all rights relating to the equity shares 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.

LR 21.6.26G

1The requirement to maintain adequate arrangements to safeguard all rights relating to the equity shares includes enabling the holders of the certificates representing shares to exercise the votes attaching to the equity shares to which the certificates relate. A depositary must not vote or attempt to exercise the votes attaching to the equity shares to which the certificates relate except pursuant to and in accordance with instructions from the holders of the certificates representing shares.