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LR 5.2 Cancelling listing

FCA may cancel listing

LR 5.2.1R

The FCA may cancel the listing of securities if it is satisfied that there are special circumstances that preclude normal regular dealings in them. [Note: article 18(2) CARD]

Examples of when FCA may cancel

LR 5.2.2G

Examples of when the FCA may cancel the listing of securities include (but are not limited to) situations where it appears to the FCA that:

  1. (1)

    the securities are no longer admitted to trading as required by these rules; or

  2. (2)

    the issuer no longer satisfies its continuing obligations for listing, for example if the percentage of shares in public hands falls below 25% or such lower percentage as the FCA may permit (the FCA may however allow a reasonable time to restore the percentage, unless this is precluded by the need to maintain the smooth operation of the market or to protect investors); or

  3. (3)

    the securities' 5 listing has been suspended for more than six months;5

  4. (4)

    the securities are equity shares with a standard listing issued by an investment entity where the investment entity no longer has a premium listing of equity shares.5

LR 5.2.3G

The FCA will generally seek to cancel the listing of an issuer's equity shares or certificates representing equity securities when the issuer completes a reverse takeover.

[Note: LR 5.6 contains further detail relating to reverse takeovers.]7

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Cancellation at issuer's request

LR 5.2.4R

An issuer must satisfy the requirements applicable to it in LR 5.2.5 R to LR 5.2.11CR 10 and LR 5.3 before the FCA will cancel the listing of its securities at its request.

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LR 5.2.4AG

1LR 5.2.4 R applies even if the listing of the securities is suspended.

Cancellation of listing of equity shares51

LR 5.2.5R

Subject to 41 LR 5.2.7 R, LR 5.2.10 R, LR 5.2.11A R9 and LR 5.2.12 R, 1an issuer with a premium listing4that wishes the FCA to cancel the listing of any of its 5equity shares 1with a premium listing 4must:

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  1. (1)

    send a circular to the holders of the shares.9 The circular must:

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    1. (a)

      comply with the requirements of LR 13.3.1 R and LR 13.3.2 R (contents of all circulars);

    2. (b)

      be submitted to the FCA for approval prior to publication; and

    3. (c)

      include the anticipated date of cancellation (which must be not less than 20 business days following the passing of the resolution referred to in paragraph (2));

  2. (2)

    obtain, at a general meeting, the prior approval of a resolution for the cancellation from:9

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    1. (a)

      a majority of not less than 75% of the votes attaching to the shares voted on the resolution; and9

    2. (b)

      where an issuer has a controlling shareholder, a majority of the votes attaching to the shares of independent shareholders voted on the resolution;9

  3. (3)

    notify a RIS, at the same time as the circular is despatched to the relevant holders of the shares9, of the intended cancellation and of the notice period and meeting; and

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  4. (4)

    notify a RIS of the passing of the resolution in accordance with LR 9.6.18 R.

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LR 5.2.5AR

[deleted]4

4
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

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LR 5.2.6R

[deleted]4

4
LR 5.2.7R

LR 5.2.5 R (2) will not apply where an issuer of equity shares1 notifies a RIS:4

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  1. (1)

    that the financial position of the issuer or its group is so precarious that, but for the proposal referred to in LR 5.2.7 R (2), there is no reasonable prospect that the issuer will avoid going into formal insolvency proceedings;

  2. (2)

    that there is a proposal for a transaction, arrangement or other form of reconstruction of the issuer or its group which is necessary to ensure the survival of the issuer or its group and the continued listing would jeopardise the successful completion of the proposal;

  3. (3)

    explaining;

    1. (a)

      why the cancellation is in the best interests of those to whom the issuer or its directors have responsibilities (including the bodies of securities holders and creditors, taken as a whole); and

    2. (b)

      why the approval of shareholders will not be sought prior to the cancellation of listing; and

  4. (4)

    giving at least 20 business days notice of the intended cancellation.

  5. 5
LR 5.2.7AR

Where an investment entity no longer has a premium listing of equity shares it must apply under LR 5.2.8 R for cancellation of the listing of any other class of listed equity shares.

Requirements for cancellation of other securities

LR 5.2.8R

An issuer that wishes the FCA to cancel the listing of listed securities (other than equity shares 1with a premium listing41) must notify a RIS, giving at least 20 business days notice of the intended cancellation but is not required to obtain the approval of the holders of those securities contemplated in LR 5.2.5 R (2).

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LR 5.2.9R

Issuers with debt securities falling under LR 5.2.8 R must also notify, in accordance with the terms and conditions of the issue of those securities, holders of those securities or a representative of the holders, such as a trustee, of intended cancellation of those securities, but the prior approval of the holders of those securities in a general meeting need not be obtained.

Cancellation in relation to takeover offers: offeror interested in 50% or less of voting rights9

LR 5.2.10R

LR 5.2.5 Rdoes4 not apply to the cancellation of equity shares with a premium listing5 in the case of a takeover offer if9:

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  1. (1)

    the offeror or any controlling shareholder who is an offeror is interested in 50% or less of the voting rights of an issuer before announcing its firm intention to make its takeover offer;9

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  2. (2)

    the offeror has by virtue of its shareholdings and acceptances of its takeover offer, acquired or agreed to acquire issued share capital carrying 75% of the voting rights of the issuer; and9

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  3. (3)

    the offeror has stated in the offer document or any subsequent circular sent to the holders of the shares that a notice period of not less than 20 business days prior to cancellation will commence either on the offeror obtaining the required 75% as described in LR 5.2.10 R (2) or on the first date of issue of compulsory acquisition notices under section 979 of the Companies Act 2006 (Right of offeror to buy out minority shareholder).9

LR 5.2.10AG

For the purposes of LR 5.2.10 R (3),9 the offer document9 or circular must make clear that the notice period begins only when the offeror has announced that it has acquired or agreed to acquire shares representing 75% of the voting rights.

LR 5.2.11R

The issuer9 must notify shareholders5 that the required 75% has been obtained9and that the notice period has commenced and of the anticipated date of cancellation,9 or the explanatory letter or other material accompanying the section 979 2notice must state that the notice period has commenced and the anticipated date of cancellation.

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Cancellation in relation to takeover offers: offeror interested in more than 50% of voting rights9

LR 5.2.11AR

9LR 5.2.5 R does not apply to the cancellation of equity shares with a premium listing in the case of a takeover offer if:

  1. (1)

    the offeror or any controlling shareholder who is an offeror is interested in more than 50% of the voting rights of an issuer before announcing its firm intention to make its takeover offer;

  2. (2)

    the offeror has by virtue of its shareholdings and acceptances of its takeover offer, acquired or agreed to acquire issued share capital carrying 75% of the voting rights of the issuer;

  3. (3)

    10the offeror has obtained acceptances of its takeover offer or acquired or agreed to acquire shares from independent shareholders that represent a majority of the voting rights held by the independent shareholders on the date its firm intention to make its takeover offer was announced; and

  4. (4)

    the offeror has stated in the offer document or any subsequent circular sent to the holders of the shares that a notice period of not less than 20 business days prior to cancellation will commence either on the offeror obtaining the relevant shareholding and acceptances as described in LR 5.2.11A R (2) to (3) 10or on the first date of issue of compulsory acquisition notices under section 979 of the Companies Act 2006.

LR 5.2.11BR

9For the purposes of LR 5.2.11A R (4), the offer document or circular must make clear that the notice period begins only when the offeror has announced that it has acquired or agreed to acquire shares representing 75% of the voting rights and, if relevant, has obtained acceptances of its takeover offer or acquired or agreed to acquire shares from independent shareholders that represent a majority of the voting rights held by the independent shareholders.

LR 5.2.11CR

9The issuer must notify shareholders that the relevant thresholds described in LR 5.2.11A R (2) to (3) 10have been obtained and that the notice period has commenced and of the anticipated date of cancellation, or the explanatory letter or other material accompanying the section 979 notice must state that the notice period has commenced and the anticipated date of cancellation.

LR 5.2.11DR

[deleted]10

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1Cancellation as a result of schemes of arrangement etc

LR 5.2.12R

1LR 5.2.5 R and LR 5.2.8 R do not apply to the cancellation of equity shares as a result of:

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  1. (1)

    a takeover or restructuring of the issuer effected by a scheme of arrangement under Part 26 of the Companies Act 20063; or

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  2. (2)

    an administration or liquidation of the issuer pursuant to a court order under the Insolvency Act 1986, Building Societies Act 1986, Water Industry Act 1991, Banking Act 2009, Energy Act 2011 or the Investment Bank Special Administration Regulations 2011; or6

  3. (3)

    the appointment of an administrator under paragraphs 14 (appointment by holder of floating charge) or 22 (appointment by company or directors) of Schedule B1 to the Insolvency Act 1986; or6

  4. (4)

    a resolution for winding up being passed under section 84 of the Insolvency Act 1986; or6

  5. (5)

    the appointment of a provisional liquidator by the court under section 135 of the Insolvency Act 1986; or6

  6. (6)

    a company voluntary arrangement pursuant to Part 1 of the Insolvency Act 1986, subject to the time limits for the challenge of decisions made set out in Part 1 of the Insolvency Act 1986 having expired; or6

  7. (7)

    statutory winding up or reconstruction measures in relation to an overseas issuer under equivalent overseas legislation having similar effect to those set out in (1) to (6).6

LR 5.2.13G

6In determining whether the statutory winding up or reconstruction measures in relation to an overseas issuer under equivalent overseas legislation have a similar effect to those set out in LR 5.2.12R (1) to LR 5.2.12R (6), the FCA will in particular have regard to whether those procedures require a court order, the approval of 75% of the shareholders entitled to vote on the resolution, or a formal declaration of the overseas issuer's insolvency or inability to pay its debts.