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LR 7.1 Application and purpose

Application

LR 7.1.1 R
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  1. (1)

    The Listing Principles in LR 7.2.1 R apply to every listed company in respect of all its obligations arising from the listing rules, disclosure requirements6, transparency rules and corporate governance rules.5

  2. (2)

    In addition to the Listing Principles referred to in (1), the Premium Listing Principles in LR 7.2.1A R apply to every listed company with a premium listing of equity shares in respect of all its obligations arising from the listing rules, disclosure requirements6, transparency rules and corporate governance rules.5

Purpose

LR 7.1.2 G

The purpose of the Listing Principles and the Premium Listing Principles5 is to ensure that listed companies pay due regard to the fundamental role they play in maintaining market confidence and ensuring fair and orderly markets.

LR 7.1.3 G

The Listing Principles and, if applicable, the Premium Listing Principles5 are designed to assist listed companies in identifying their obligations and responsibilities under the listing rules, disclosure requirements6, transparency rules and corporate governance rules.5 The Listing Principles and Premium Listing Principles5 should be interpreted together with relevant rules and guidance which underpin the Listing Principles and the Premium Listing Principles.5

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LR 7.1.4 G

DEPP 6 (Penalties) and EG 72 set out guidance on the consequences of breaching a Listing Principle or, if applicable, a Premium Listing Principle.5

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LR 7.2 The Listing and Premium Listing Principles3

LR 7.2.1 R

The Listing Principles are as follows:

Listing3 Principle 1

A listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations.3

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Listing3 Principle 2

A listed company must deal with the FCA in an open and co-operative manner.3

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Principle 3

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Principle 4

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Principle 5

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Principle 6

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LR 7.2.1A R

3The Premium Listing Principles are as follows:

Premium Listing Principle 1

A listed company must take reasonable steps to enable its directors to understand their responsibilities and obligations as directors.

Premium Listing Principle 2

A listed company must act with integrity towards the holders and potential holders of its premium listed shares.

Premium Listing Principle 3

All equity shares in a class that has been admitted to premium listing must carry an equal number of votes on any shareholder vote.

Premium Listing Principle 4

Where a listed company has more than one class of equity sharesadmitted to premium listing, the aggregate voting rights of the shares in each class should be broadly proportionate to the relative interests of those classes in the equity of the listed company.

Premium Listing Principle 5

A listed company must ensure that it treats all holders of the same class of its listed equity shares that are in the same position equally in respect of the rights attaching to those listed equity shares.

Premium Listing Principle 6

A listed company must communicate information to holders and potential holders of its listed equity shares in such a way as to avoid the creation of a false market in those listed equity shares.

Guidance on the Listing and Premium Listing Principles3

LR 7.2.2 G

Listing Principle 13 is intended to ensure that listed companies have adequate procedures, systems and controls to enable them to comply with their obligations under the listing rules, disclosure requirements4, transparency rules and corporate governance rules.3 In particular, the FCA considers that listed companies should place particular emphasis on ensuring that they have adequate procedures, systems and controls in relation to, where applicable:3

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  1. (1)

    identifying whether any obligations arise under LR 10 (Significant transactions) and LR 11 (Related party transactions); and

  2. (2)

    the timely and accurate disclosure of information to the market.

LR 7.2.3 G

Timely and accurate disclosure of information to the market is a key obligation of listed companies. For the purposes of Listing Principle 13, a listed company should have adequate systems and controls to be able to:

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  1. (1)

    ensure that it can properly identify information which requires disclosure under the listing rules, disclosure requirements4, transparency rules or corporate governance rules3 in a timely manner; and

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  2. (2)

    ensure that any information identified under (1) is properly considered by the directors and that such a consideration encompasses whether the information should be disclosed.

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LR 7.2.4 G

3In assessing whether the voting rights attaching to different classes of premium listed shares are proportionate for the purposes of Premium Listing Principle 4, the FCA will have regard to the following non-exhaustive list of factors:

  1. (1)

    the extent to which the rights of the classes differ other than their voting rights, for example with regard to dividend rights or entitlement to any surplus capital on winding up;

  2. (2)

    the extent of dispersion and relative liquidity of the classes; and/or

  3. (3)

    the commercial rationale for the difference in the rights.