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LR 5.1 Suspending listing

FCA may suspend listing

LR 5.1.1 R
  1. (1)

    1The FCA may suspend, with effect from such time as it may determine, the listing of any securities if the smooth operation of the market is, or may be, temporarily jeopardised or it is necessary to protect investors. [Note: article 18(1) CARD]

  2. (2)

    An issuer that has the listing of any of its securities suspended must continue to comply with all listing rules applicable to it.

  3. (3)

    If the FCA suspends the listing of any securities, it may impose such conditions on the procedure for lifting the suspension as it considers appropriate.

Examples of when FCA may suspend

LR 5.1.2 G

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

  1. (1)

    the issuer has failed to meet its continuing obligations for listing; or

  2. (2)

    the issuer has failed to publish financial information in accordance with the listing rules; or

  3. (3)

    the issuer is unable to assess accurately its financial position and inform the market accordingly; or

  4. (4)

    there is insufficient information in the market about a proposed transaction; or

  5. (5)

    the issuer'ssecurities have been suspended elsewhere; or

  6. (6)

    the issuer has appointed administrators or receivers, or is an investment trust and is winding up; or

  7. (7)

    for a securitised derivative that relates to a single underlying instrument, the underlying instrument is suspended; or

  8. (8)

    for a securitised derivative that relates to a basket of underlying instruments, one or more underlying instruments of the basket are suspended; or2

  9. (9)

    for a miscellaneous security that carries a right to buy or subscribe for another security, the security over which the listed miscellaneous security carries a right to buy or subscribe has been suspended.2

LR 5.1.3 G

The FCA will not suspend the listing of a security to fix its price at a particular level.

Suspension at issuer's request

LR 5.1.4 G

An issuer that intends to request the FCA to suspend the listing of its securities will need to comply with LR 5.3. The FCA will not suspend the listing if it is not satisfied that the circumstances justify the suspension.

LR 5.2 Cancelling listing

FCA may cancel listing

LR 5.2.1 R

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 5.2.2 G

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' 5listing 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 5.2.3 G

The FCA will generally seek to cancel the listing of an issuer'sequity 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

5 5 7

Cancellation at issuer's request

LR 5.2.4 R

An issuer must satisfy the requirements applicable to it in LR 5.2.5 R to LR 5.2.11CR10 and LR 5.3 before the FCA will cancel the listing of its securities at its request.

9 9
LR 5.2.4A G

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

Cancellation of listing of equity shares51

LR 5.2.5 R

Subject to 41LR 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 shares1with a premium listing4must:

1 1 1 4
  1. (1)

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

    9
    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

    9
    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

    9
  4. (4)

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

    9
LR 5.2.5A R

[deleted]4

4
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
LR 5.2.6 R

[deleted]4

4
LR 5.2.7 R

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

4 4 1 5
  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 5.2.7A R

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 listedequity shares.

Requirements for cancellation of other securities

LR 5.2.8 R

An issuer that wishes the FCA to cancel the listing of listed securities (other than equity shares1with 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).

1 5 4 4
LR 5.2.9 R

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 5.2.10 R

LR 5.2.5 R does4 not apply to the cancellation of equity shares with a premium listing5 in the case of a takeover offer if9:

1 4 5 5 9 4
  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

    9
  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

    1119
  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 5.2.10A G

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 5.2.11 R

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.

9 5 9 2

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

LR 5.2.11A R

9 LR 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 5.2.11B R

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 5.2.11C R

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 5.2.11D R

[deleted]10

9

1Cancellation as a result of schemes of arrangement etc

LR 5.2.12 R

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

4 5 5 6
  1. (1)

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

    23
  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 overseasissuer under equivalent overseas legislation having similar effect to those set out in (1) to (6).6

LR 5.2.13 G

6In determining whether the statutory winding up or reconstruction measures in relation to an overseasissuer 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 overseasissuer's insolvency or inability to pay its debts.

LR 5.3 Requests to cancel or suspend

Information to be included in request to suspend or cancel

LR 5.3.1 R

A request by an issuer for the listing of its securities to be suspended or cancelled must be in writing and must include:

  1. (1)

    the issuer's name;

  2. (2)

    details of the securities to which it relates and the RIEs on which they are traded;

  3. (3)

    a clear explanation of the background and reasons for the request;

  4. (4)

    the date on which the issuer requests the suspension or cancellation to take effect;

  5. (5)

    for a suspension, the time the issuer wants the suspension to take effect;

  6. (6)

    if relevant, a copy of any circular or announcement or other document upon which the issuer is relying;

  7. (7)

    if relevant, evidence of any resolution required under LR 5.2.5 R;

  8. (8)

    if being made by an agent on behalf of the issuer, confirmation that the agent has the issuer's authority to make it;

  9. (9)

    the name and contact details of the person at the issuer (or, if appropriate, an agent) with whom the FCA should liaise in relation to the request;

  10. (10)

    if the issuer is making a conditional request, a clear statement of the applicable conditions;

  11. (11)

    a copy of any announcement the issuer proposes to notify to a RIS that it is relying on in making its request to suspend or cancel; and

  12. (12)

    a copy of any announcement the issuer proposes to notify to a RIS announcing the suspension or cancellation.

LR 5.3.2 R

The issuer must also include with a request to cancel the listing of its securities the following:

  1. (1)

    if the cancellation is to take effect after the completion of the compulsory acquisition procedures under Chapter 3 of Part 281 of the Companies Act 20061, a copy of the notice sent to dissenting shareholders of the offeree together with written confirmation that there have been no objections made to the court within the prescribed period;

    11
  2. (2)

    for a cancellation referred to in LR 5.2.10 R or LR 5.2.11A R5 an extract from, or a copy of, the offer document or relevant circular clearly showing the intention to cancel the offeree’s listing and a copy of the announcement stating the date on which the cancellation was expected to take effect; and

  3. (3)

    if a cancellation is to take place after a scheme of arrangement becomes effective under section 899 of the Companies Act 20063 and a new company is to be listed as a result of that scheme, either:

    2111123
    1. (a)

      a copy of the certificate from the Registrar of Companies that the scheme has become effective; or

    2. (b)

      documents which demonstrate adequately that the scheme will become effective on a specified date in the future.

LR 5.3.3 G

Announcements referred to in LR 5.3.1 R (12) should be issued after the dealing notice issued on a RIS announcing the suspension or cancellation.

Timing of suspension requests

LR 5.3.4 G

A written request by an issuer to have the listing of its securities suspended should be made as soon as practicable. Suspension requests received for the opening of the market should allow sufficient time for the FCA to deal with the request before trading starts.

Timing of cancellation requests

LR 5.3.5 R

A written request by an issuer to have the listing of its securities cancelled must be made not less than 24 hours before the cancellation is expected to take effect.

LR 5.3.6 G

Cancellations will only be specified to take effect when the market opens on a specified day. An issuer should therefore ensure that all accompanying information has been provided to the FCA well before the date on which the issuer wishes the cancellation to take effect and at the very latest by 3 p.m. on the business day before it is to take effect. If the information is received after 3:00 p.m. on the day before the issuer wishes the cancellation to take effect, it will normally be specified to take effect at the start of the business day following the next day.

Withdrawing request

LR 5.3.7 G
  1. (1)

    If an issuer requests the FCA to suspend or cancel the listing of its securities, it may withdraw its request at any time before the suspension or cancellation takes effect. The withdrawal request should initially be made by telephone and then confirmed in writing as soon as possible, with an explanation of the reasons for the withdrawal.

  2. (2)

    Even if an issuer withdraws its request, the FCA may still suspend or cancel the listing of the securities if it considers it is necessary to do so.

  3. (3)

    If an issuer has published either a statement or a circular that states that the issuer is, or intends, to seek a suspension or cancellation and the issuer no longer intends to do so, it should, as soon as possible, notify a RIS with a statement to that effect.

Notice of cancellation or suspension

LR 5.3.8 G

4If an issuer requests the FCA to suspend or cancel the listing of its securities under LR 5.3.1 R and the FCA agrees to do so, the notification given by the FCA to the issuer will include the following information:

  1. (1)

    the date on which the suspension or cancellation took effect or will take effect;

  2. (2)

    details of the suspension or cancellation; and

  3. (3)

    in relation to requests for suspension, details of the issuer's right to apply for the suspension of its listed securities to be cancelled.

LR 5.4 Restoring listing

Revoking a cancellation of listing

LR 5.4.1 G

If an issuer has the listing of its securities cancelled, it may only have them readmitted to the official list by re-applying for their listing.

Restoring a listing that is suspended

LR 5.4.2 R

The FCA may restore the listing of any securities that have been suspended if it considers that the smooth operation of the market is no longer jeopardised or if the suspension is no longer required to protect investors. The FCA may restore the listing even though the issuer does not request it.

Requests to restore

LR 5.4.3 G
  1. (1)

    An issuer that has the listing of any of its securities suspended may request the FCA to have them restored.

  2. (2)

    The request should be made sufficiently in advance of the time and date the issuer wishes the securities to be restored.

  3. (3)

    Requests received for when the market opens should allow sufficient time for the FCA to deal with the request.

  4. (4)

    The request may be an oral request. The FCA may require documentary evidence that the events that lead to the suspension are no longer current (for example, financial reports have been published or an appropriate announcement has been made) to process the request.

  5. (5)

    Even if restoration is required urgently, it will normally take up to 30 minutes to be effected.

  6. (6)

    The FCA will issue a dealing notice on a RIS announcing the restoration.

Refusal of request to restore

LR 5.4.4 R

The FCA will refuse a request to restore the listing of securities if it is not satisfied of the matters set out in LR 5.4.2 R.

Withdrawal of a request to restore securities

LR 5.4.5 G
  1. (1)

    If an issuer has requested the FCA to restore the listing of any securities, it may withdraw its request at any time while the securities are still suspended. The withdrawal request should initially be made by telephone and then confirmed in writing as soon as possible.

  2. (2)

    Even if a request to restore has been withdrawn, the FCA may restore the listing of securities if it believes the circumstances justify it.

Restoring listing of securitised derivatives

LR 5.4.6 G
  1. (1)

    If an underlying instrument is restored, the securitised derivative'slisting will normally be restored.

  2. (2)

    For a securitised derivative relating to a basket of underlying instruments that has been suspended, the securitised derivative's listing may be restored by the FCA, irrespective of whether or not the underlying instrument has been restored, if:

    1. (a)

      the issuer of the securitised derivative confirms to the FCA that despite the relevant underlying instrument(s) suspension a market in the securitised derivative will continue to be made; and

    2. (b)

      the FCA is satisfied that restoring the securitised derivative is not inconsistent with either the protection of investors or the smooth operation of the market.

LR 5.4.7 G

1For a miscellaneous security that carries a right to buy or subscribe for another security, the miscellaneous security's listing will be restored if the security over which the miscellaneous security carries a right to buy or subscribe is restored.

LR 5.4A Transfer between listing categories: Equity shares12

Application

LR 5.4A.2 G

An issuer will only be able to transfer a listing of its equity shares2 from a premium listing (investment company) to a standard listing (shares)2 if it has ceased to be an investment entity (for example if it has become a commercial company) or if it continues to have a premium listing of a class of equity shares.2This is because LR 14.1.1 R provides that LR 14 does not apply to equity shares of2 an investment entity without a premium listing of equity shares.2

Initial notification to FCA

LR 5.4A.3 R
  1. (1)

    If an issuer wishes to transfer its category of equity shares2listing it must notify the FCA of the proposal.

  2. (2)

    The notification must be made as early as possible and in any event not less than 20 business days before it sends the circular required under LR 5.4A.4 R (2)(a) or publishes the announcement required under LR 5.4A.5 R (2).

  3. (3)

    The notification must include:

    1. (a)

      an explanation of why the issuer is seeking the transfer;

    2. (b)

      if a sponsor's letter is not required under LR 8.4.14R(1), an eligibility letter setting out how the issuer satisfies each listing rule requirement relevant to the category of listing to which it wishes to transfer;

    3. (c)

      a proposed timetable for the transfer; and

    4. (d)

      if an announcement is required to be published under LR 5.4A.5R (2), a draft of that announcement.

Shareholder approval required in certain cases

LR 5.4A.4 R
  1. (1)

    This rule applies to a transfer of the listing of equity shares with a premium listing2 into or out of the category of premium listing (investment company) or a transfer of the listing of equity shares2 out of the category of premium listing (commercial company).

  2. (2)

    The issuer must:

    1. (a)

      send a circular to the holders of the equity shares2;

    2. (b)

      notify a RIS, at the same time as the circular is despatched to the relevant holders of the equity shares2, of the intended transfer and of the notice period and meeting date; and3

    3. (c)

      [deleted]3

      3
    4. (d)

      notify a RIS of the passing of the resolution required under (3) below.3

  3. (3)
    1. (a)

      In the case of a transfer of the listing of equity shares with a premium listing into or out of the category of premium listing (investment company), the issuer must obtain at a general meeting the prior approval of a resolution for the transfer from a majority of not less than 75% of the votes attaching to the shares voted on the resolution; or

    2. (b)

      in the case of a transfer of the listing of equity shares with a premium listing (commercial company) into the category of standard listing (shares), the issuer must obtain at a general meeting the prior approval of a resolution for the transfer from:

      1. (i)

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

      2. (ii)

        where an issuer has a controlling shareholder, a majority of the votes attaching to the shares of independent shareholders voted on the resolution.3

Announcement required in other cases

LR 5.4A.5 R
  1. (1)

    This rule applies to any transfer of a listing of equity shares2 other than a transfer referred to in LR 5.4A.4 R (1).

  2. (2)

    The issuer must publish an announcement on a RIS giving notice of its intention to transfer its listing category.

Approval and contents of circular

LR 5.4A.6 R

The circular referred to in LR 5.4A.4 R must:

  1. (1)

    comply with the requirements of LR 13.1, LR 13.2 and LR 13.3;

  2. (2)

    be approved by the FCA before it is circulated or published; and

  3. (3)

    include the anticipated transfer date (which must be not less than 20 business days after the passing of the resolution under LR 5.4A.4 R).

Approval and contents of announcement

LR 5.4A.7 R

The announcement referred to in LR 5.4A.5 R (2) must:

  1. (1)

    contain the same substantive information as would be required under LR 13.1and LR 13.3 if it were a circular but modified as necessary so it is clear that no shareholder vote is required; and

  2. (2)

    include the anticipated transfer date (which must be not less than 20 business days after the date the announcement is published).

LR 5.4A.8 R

The announcement must be approved by the FCA before it is published.

Specific information required in circular or announcement

LR 5.4A.9 G

Information required under LR 13.3.1R(1) (Contents of all circulars) to be included in the circular or announcement should include an explanation of:

  1. (1)

    the background and reasons for the proposed transfer;

  2. (2)

    any changes to the issuer's business that have been made or are proposed to be made in connection with the proposal;

  3. (3)

    the effect of the transfer on the issuer's obligations under the listing rules;

  4. (4)

    how the issuer will meet any new eligibility requirements, for example working capital requirements, that the FCA must be satisfied of under LR 5.4A.12 R (3); and

  5. (5)

    any other matter that the FCA may reasonably require.

Applying for the transfer

LR 5.4A.10 R

If an issuer has initially notified the FCA under LR 5.4A.3 R it may apply to the FCA to transfer the listing of its equity shares2 from one category to another. The application must include:

  1. (1)

    the issuer's name;

  2. (2)

    details of the equity shares2 to which the transfer relates;

  3. (3)

    the date on which the issuer wishes the transfer to take effect;

  4. (4)

    a copy of any circular, announcement or other document on which the issuer is relying;

  5. (5)

    if relevant, evidence of any resolution required under LR 5.4A.4 R;

  6. (6)

    if an agent is making the application on the issuer's behalf, confirmation that the agent has the issuer's authority to do so;

  7. (7)

    the name and contact details of the person at the issuer (or, if appropriate an agent) with whom the FCA should liaise in relation to the application; and

  8. (8)

    a copy of any announcement the issuer proposes to notify to a RIS informing the market that the transfer has taken place.

Issuer must comply with eligibility requirements

LR 5.4A.11 R
  1. (1)

    An issuer applying for a transfer of its equity shares2 must comply with all eligibility requirements that would apply if the issuer was seeking admission to listing of the equity shares2 to the category of listing to which it wishes to transfer.

  2. (2)

    For the purposes of applying the eligibility requirements referred to in (1) to a transfer then, unless the context otherwise requires, a reference in such a requirement:

    1. (a)

      to the admission of equity shares2 is to be taken to be a reference to the transfer of the equity shares;2 and

    2. (b)

      to a prospectus or listing particulars is to be taken to be a reference to the circular or announcement.

Approval of transfer

LR 5.4A.12 R

If an issuer applies under LR 5.4A.10 R, the FCA may approve the transfer if it is satisfied that:

  1. (1)

    the issuer has complied with LR 5.4A.4 R or LR 5.4A.5 R (whichever is relevant);

  2. (2)

    the 20 business day period referred to in LR 5.4A.6 R or LR 5.4A.7 R (whichever is relevant) has elapsed; and

  3. (3)

    the issuer and the equity shares2 will comply with all eligibility requirements that would apply if the issuer was seeking admission to listing of the equity shares2 to the category of listing to which it wishes to transfer.

LR 5.4A.13 G

The FCA will not generally reassess compliance with eligibility requirements (for example LR 6.1.16 R (Working capital) if the issuer has previously been assessed by the FCA as meeting those requirements under its existing listing category when its equity shares2 were listed.

When transfer takes effect

LR 5.4A.14 R
  1. (1)

    If the FCA approves a transfer of a listing then it must announce its decision on a RIS.

  2. (2)

    The transfer becomes effective when the FCA's decision to approve is announced on the RIS.

  3. (3)

    The issuer must continue to comply with the requirements of its existing category of listing until the decision is announced on the RIS.

  4. (4)

    After the decision is announced the issuer must comply with the requirements of the category of listing to which it has transferred.

Directive obligations

LR 5.4A.15 G

An issuer may take steps, in connection with a transfer, which require it to consider whether a prospectus is necessary, for example, if the company or its capital is reconstituted in a way that could amount to an offer of transferable securities to the public. The issuer and its advisers should consider whether directive obligations may be triggered.

Transfer as an alternative to cancellation

LR 5.4A.16 G

There may be situations in which an issuer's business has changed over a period of time so that it no longer meets the requirements of the applicable listing category against which it was initially assessed for listing. In those situations, the FCA may consider cancelling the listing of the equity shares2 or suggest to the issuer that, as an alternative, it applies for a transfer of its listing category.

LR 5.5 Miscellaneous

Decision-making procedures for suspension, cancellation etc

LR 5.5.1 G

The decision-making procedures that the FCA will follow when it cancels, suspends or refuses a request by an issuer2 to suspend, cancel or 2restore listing are set out in DEPP (Decision Procedure and Penalties)1.

1 1

Suspension, cancellation or restoration by overseas exchange or authority

LR 5.5.2 R

An issuer must inform the FCA if its listing has been suspended, cancelled or restored by an overseas exchange or overseas authority.

LR 5.5.3 G
  1. (1)

    The FCA will not automatically suspend, cancel or restore the listing of securities at the request of an overseas exchange or overseas authority (for example, if listing of a listed3issuer'ssecurities are suspended, cancelled or restored on its home exchange).

  2. (2)

    The FCA will not normally suspend the listing of securities where there is a trading halt for the security on its home exchange.

  3. (3)

    If a listedissuer3 requests a suspension, cancellation or restoration of the listing of its securities, after a suspension, cancellation or restoration on its home exchange, the issuer should send to the FCA written confirmation:

    1. (a)

      that the suspension, cancellation or restoration of listing on its home exchange has become effective; or

    2. (b)

      if it has not yet become effective, of the time and date it is proposed to become effective.

  4. (4)

    If an overseas exchange or competent authority requests the FCA to suspend, cancel or restore the listing of securities, the FCA will, wherever practical, contact the issuer or its sponsor before it suspends, cancels or restores the listing. Therefore, issuers are encouraged to contact the FCA at the same time as they contact their home exchange.

  5. (5)

    If the FCA is unable to contact the issuer or sponsor, it will suspend, cancel or restore the listing of the securities when it is satisfied that the listing of the relevant securities has been, or will be, suspended, cancelled or restored on their home exchange.

LR 5.6 Reverse takeovers

Application

LR 5.6.1 R

Categories of reverse takeover to which this section does not apply

LR 5.6.2 R

LR 5.6 does not apply where an issuer acquires the shares or certificates representing equity securities of a target with the same category of listing as the issuer.

Class 1 requirements

LR 5.6.3 R

Notwithstanding the effect of LR 5.6.2 R, an issuer with a premium listing must in relation to a reverse takeover comply with the requirements of LR 10.5 (Class 1 requirements) for that transaction.

Definition

LR 5.6.4 R

A reverse takeover is a transaction, whether effected by way of a direct acquisition by the issuer or a subsidiary, an acquisition by a new holding company of the issuer or otherwise, of a business, a company or assets:

  1. (1)

    where any percentage ratio is 100% or more; or

  2. (2)

    which in substance results in a fundamental change in the business or in a change in board or voting control of the issuer.

When calculating the percentage ratio, the issuer must5 apply the class tests and LR 10.2.10R (Aggregating transactions)5.

LR 5.6.5 G

For the purpose of LR 5.6.4R (2), the FCA considers that the following factors are indicators of a fundamental change:

  1. (1)

    the extent to which the transaction will change the strategic direction or nature of its business; or

  2. (2)

    whether its business will be part of a different industry sector following the completion of the transaction; or

  3. (3)

    whether its business will deal with fundamentally different suppliers and end users.

Requirement for a suspension

LR 5.6.6 R

An issuer, or in the case of an issuer with a premium listing, its sponsor, must contact the FCA as early as possible:

  1. (1)

    before announcing a reverse takeover which has been agreed or is in contemplation, to discuss whether a suspension of listing is appropriate; or

  2. (2)

    where details of the reverse takeover have leaked, to request a suspension.

LR 5.6.7 G

Examples of where the FCA will consider that a reverse takeover is in contemplation include situations where:

  1. (1)

    the issuer has approached the target's board;

  2. (2)

    the issuer has entered into an exclusivity period with a target; or

  3. (3)

    the issuer has been given access to begin due diligence work (whether or not on a limited basis).

LR 5.6.8 G

Generally, when a reverse takeover is announced or leaked, there will be insufficient publicly available information about the proposed transaction and the issuer will be unable to assess accurately its financial position and inform the market accordingly. In this case, the FCA will often consider that suspension will be appropriate, as set out in LR 5.1.2G (3) and (4). However, if the FCA is satisfied that there is sufficient publicly available information about the proposed transaction it may agree with the issuer that a suspension is not required.

LR 5.6.9 G

LR 5.6.10 G to LR 5.6.18 R set out circumstances in which the FCA will generally be satisfied that a suspension is not required.

Target admitted to a regulated market

LR 5.6.10 G

The FCA will generally be satisfied that there is sufficient information in the market about the propos ed transaction if:

  1. (1)

    the target has shares or certificates representing equity securities admitted to a regulated market; and

  2. (2)

    the issuer makes an announcement stating that the target has complied with the disclosure requirements applicable on that regulated market and providing details of where information disclosed pursuant to those requirements can be obtained.

LR 5.6.11 R

An announcement made for the purpose of LR 5.6.10G (2) must be published by means of an RIS.

Target subject to the disclosure regime of another market

LR 5.6.12 G

The FCA will generally be satisfied that there is sufficient publicly available information in the market about the proposed transaction if the target has securities admitted to an investment exchange or trading platform that is not a regulated market and the issuer:

  1. (1)

    confirms, in a form acceptable to the FCA, that the disclosure requirements in relation to financial information and inside information of the investment exchange or trading platform on which the target'ssecurities are admitted are not materially different from the disclosure requirements4; and

  2. (2)

    makes an announcement to the effect that:

    1. (a)

      the target has complied with the disclosure requirements applicable on the investment exchange or trading platform to which its securities are admitted and provides details of where information disclosed pursuant to those requirements can be obtained; and

    2. (b)

      there are no material differences between those disclosure requirements and the disclosure requirements under DTR.

LR 5.6.13 R

Where an issuer has a premium listing, a written confirmation provided for the purpose of LR 5.6.12G (1) must be given by the issuer'ssponsor.

LR 5.6.14 R

An announcement made for the purpose of LR 5.6.12G (2) must be published by means of an RIS.

Target not subject to a public disclosure regime

LR 5.6.15 G

Where the target in a reverse takeover is not subject to a public disclosure regime, or if the target has securities admitted on an investment exchange or trading platform that is not a regulated market but the issuer is not able to give the confirmation and make the announcement contemplated by LR 5.6.12 G, the FCA will generally be satisfied that there is sufficient publicly available information in the market about the proposed transaction such that a suspension is not required where the issuer makes an announcement containing:

  1. (1)

    financial information on the target covering the last three years. Generally, the FCA would consider the following information to be sufficient:

    1. (a)

      profit and loss information to at least operating profit level;

    2. (b)

      balance sheet information, highlighting at least net assets and liabilities;

    3. (c)

      relevant cash flow information; and

    4. (d)

      a description of the key differences between the issuer's accounting policies and the policies used to present the financial information on the target;

  2. (2)

    a description of the target to include key non-financial operating or performance measures appropriate to the target's business operations and the information as required under PR Appendix 3 Annex 1 item 12 (Trend information) for the target;

  3. (3)

    a declaration that the directors of the issuer consider that the announcement contains sufficient information about the business to be acquired to provide a properly informed basis for assessing its financial position; and

  4. (4)

    a declaration2 confirming that the issuer has made the necessary arrangements with the target vendors to enable it to keep the market informed without delay of any developments concerning the target that would be required to be released were the target part of the issuer.

    2
LR 5.6.16 R

An announcement made for the purpose of LR 5.6.15 G must be published by means of an RIS.

LR 5.6.17 R

Where an issuer has a premium listing, a sponsor must provide written confirmation to the FCA that in its opinion, it is reasonable for the issuer to provide the declarations described in LR 5.6.15G (3) and (4).

LR 5.6.18 R

Where the FCA has agreed that a suspension is not necessary as a result of an announcement made for the purpose of LR 5.6.15 G the issuer must comply with the obligation under article 17(1) of the Market Abuse Regulation3 on the basis that the target already forms part of the enlarged group.

Cancellation of listing

LR 5.6.19 G

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

LR 5.6.20 G

LR 5.6.23 G to LR 5.6.29 G set out circumstances in which the FCA will generally be satisfied that a cancellation is not required.

LR 5.6.21 R

Where the issuer'slisting is cancelled following completion of a reverse takeover, the issuer must re-apply for the listing of the shares or certificates representing equity securities and satisfy the relevant requirements for listing, except that for an issuer with a premium listing, LR 6.1.3 R (1)(b) and LR 6.1.3 R (1)(e) will not apply in relation to the issuer's accounts.

LR 5.6.22 G

Notwithstanding LR 5.6.21 R, financial information provided in relation to the target will need to satisfy LR 6.1.3 R (1)(b) and LR 6.1.3 R (1)(e).

Acquisitions of targets from different listing categories: issuer maintaining its listing category

LR 5.6.23 G

Where an issuer acquires the shares or certificates representing equity securities of a target with a different listing category from its own and the issuer wishes to maintain its existing listing category, the FCA will generally be satisfied that a cancellation is not required on completion of a reverse takeover if:

  1. (1)

    the issuer will continue to be eligible for its existing listing category following completion of the transaction;

  2. (2)

    the issuer provides an eligibility letter setting out how the issuer as enlarged by the acquisition satisfies each listing rule requirement that is relevant to it being eligible for its existing listing category; and

  3. (3)

    the issuer makes an announcement or publishes a circular explaining:

    1. (a)

      the background and reasons for the acquisition;

    2. (b)

      any changes to the acquiring issuer's business that have been made or are proposed to be made in connection with the acquisition;

    3. (c)

      the effect of the transaction on the acquiring issuer's obligations under the listing rules;

    4. (d)

      (where appropriate) how the acquiring issuer will continue to meet the eligibility requirements referred to in LR 5.6.21 R; and

    5. (e)

      any other matter that the FCA may reasonably require.

LR 5.6.24 R

An announcement or circular published for the purpose of LR 5.6.23 G must be published by means of an RIS.

LR 5.6.25 R

An eligibility letter prepared for the purposes of LR 5.6.23 G must be provided to the FCA not less than 20 business days prior to the announcement of the transaction referred to in LR 5.6.24 R.

LR 5.6.26 R

Where an issuer has a premium listing, the eligibility letter provided for the purposes of LR 5.6.23 G must be provided by a sponsor.

Acquisitions of targets from different listing categories: issuer changing listing category

LR 5.6.27 G

The FCA will generally be satisfied that a cancellation is not required on completion of a reverse takeover if the target is listed with a different listing category from that of the issuer and the issuer wishes to transfer its listing to a different listing category in conjunction with the acquisition and the issuer as enlarged by the relevant acquisition complies with the relevant requirements of LR 5.4A to transfer to a different listing category.

LR 5.6.28 G

An issuer wishing to transfer a listing of its equity shares from a premium listing (investment company) to a standard listing (shares) should note LR 5.4A.2 G which sets out limitations resulting from the application of LR 14.1.1 R (application of the listing rules to a company with or applying for a standard listing of shares).

LR 5.6.29 G

Where an issuer is applying LR 5.4A in order to avoid a cancellation as contemplated by LR 5.6.27 G, the FCA will normally waive the requirement for shareholder approval under LR 5.4A.4R (2)(c) where the issuer is obtaining separate shareholder approval for the acquisition.