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Status: You are viewing the version of the handbook as on 2009-03-31.

LR 8.6 Criteria for approval as a sponsor

List of sponsors

LR 8.6.1GRP

The FSA will maintain a list of sponsors on its website.

Application for approval as a sponsor

LR 8.6.2RRP

A person wanting to provide sponsor services4, and to be included on the list of sponsors, must apply to the FSA for approval as a sponsor by submitting the following to the Sponsor Supervision Team at the FSA address:

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  1. (1)

    a completed Sponsor Firm Application Form; and4

  2. (2)

    [deleted]4

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  3. (3)

    the application fee set out in 1FEES 31.

[Note: The Sponsor's Firm Application Form can be found on the UKLA section of the FSA's website.]

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LR 8.6.3RRP

A person wanting to provide sponsor services 4and be included on the list of sponsors must also submit:

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  1. (1)

    all additional documents, explanations and information as required by the FSA; and

  2. (2)

    verification of any information in such a manner as the FSA may specify.

LR 8.6.4GRP

When considering an application for approval as a sponsor the FSA may:

  1. (1)

    carry out any enquiries and request any further information which it considers appropriate, including consulting other regulators;

  2. (2)

    request that the applicant or its specified representative answer questions and explain any matter the FSA considers relevant to the application;

  3. (3)

    take into account any information which it considers appropriate in relation to the application.2

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  4. (4)

    [deleted]2

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[Note: The decision-making procedures that the FSA will follow when it4considers whether to refuse an application for approval as a sponsor are set out in DEPP3.]

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Criteria for approval as a sponsor

LR 8.6.5RRP

The FSA will approve a person as a sponsor only if it is satisfied that the person :

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  1. (1)

    is 4an authorised person or a member of a designated professional body;

  2. (2)

    is 4competent to performsponsor services4; and

  3. (3)

    has appropriate 4systems and controls in place to ensure that it cancarry out its role as a sponsor in accordance with this chapter4.

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LR 8.6.6RRP

A sponsor must comply, at all times, with the criteria set out in LR 8.6.5 R.

Competence of a sponsor

LR 8.6.7RRP

A person 4will be competent toprovide sponsor services4 if it has a broad range of relevant experience and expertise in providing advice to listed companies and on the listing rules.

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LR 8.6.8G
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  1. (1)

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  2. (2)

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  3. (3)

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LR 8.6.9G
  1. (1)

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  2. (2)

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    1. (a)

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    2. (b)

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LR 8.6.9AG

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FSA will generally have regard amongst other things to the person's:

  1. (1)

    prior relevant experience of providing sponsor services;

  2. (2)

    skills, knowledge and expertise necessary for the proper performance of sponsor services; and

  3. (3)

    prior corporate finance experience.

LR 8.6.9BGRP

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FSA may also take into account, where relevant, the quality of anyguidance or advice on the listing rules or disclosure rules and transparency rules the person has given in circumstances other than in providing sponsor services.

LR 8.6.10R

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LR 8.6.11G

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Systems and controls: general

LR 8.6.12GRP

A sponsor will generally be regarded as having appropriate 4systems and controls if there are:

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  1. (1)

    clear and effective reporting lines in place (including clear and effective management responsibilities)4;

  2. (2)

    effective systems and controls for the appropriate4 supervision of employees providing sponsor services4;

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  3. (3)

    effective systems and controls to ensure its compliance with all applicable listing rules when performing sponsor services4;

  4. (4)

    [deleted]4

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  5. (5)

    effective arrangements for creating4 and retaining for 6 years, adequate records of all matters relating to the provision of sponsor services to a listed company or applicant;4

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  6. (6)

    effective systems and controls to ensure that it has appropriate staffing arrangements for the performance of sponsor services with due care and skill; and4

  7. (7)

    effective systems and controls to ensure that employees performingsponsor services receive appropriate guidance and training for the performance of those services with due care and skill.4

LR 8.6.13GRP

The nature and extent of the systems and controls which a sponsor will need to maintain will depend upon a variety of factors including:

  1. (1)

    the nature, scale and complexity of its business;

  2. (2)

    the diversity of its operations;

  3. (3)

    the volume and size of the transactions it undertakes;

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  4. (4)

    the volume and size of the transactions it anticipates undertaking in the following year; and4

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  5. (5)

    the degree of risk associated with the transactions it undertakes.4

Systems and controls: conflicts of interest4

LR 8.6.13AGRP

4A sponsor will generally be regarded as having appropriate systems and controls if it has in place effective policies and procedures:

  1. (1)

    to ensure that decisions taken on managing conflicts of interest are taken by appropriately senior staff and on a timely basis;

  2. (2)

    to monitor whether arrangements put in place to manage conflicts are effective;

  3. (3)

    to ensure that individuals within the sponsor are appropriately trained to enable them to identify, escalate and manage conflicts of interest; and

  4. (4)

    to ensure that appropriate records are kept of decisions relating to identification and management of conflicts and the basis upon which it has reached those decisions.

LR 8.6.13BGRP

4The policies and procedures referred to in LR 8.6.13A G are distinct from the actual organisational and administrative arrangements that a sponsor is required to put in place and maintain under LR 8.3.9 R to manage specific conflicts.

LR 8.6.14G

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LR 8.6.15R

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LR 8.6.16G

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  1. (1)

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  2. (2)

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  3. (3)

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    1. (a)

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    2. (b)

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    3. (c)

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  4. (4)

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Regular review

LR 8.6.17R

4A sponsor must carry out a regular review to ensure that:

  1. (1)

    it continues to be competent to provide sponsor services; and

  2. (2)

    it has appropriate systems and controls in place to ensure that it can continue to carry out its role as a sponsor in accordance with this chapter.

LR 8.6.18R

4A sponsor must create, and retain for 6 years, adequate records to demonstrate that it has carried out the regular reviews referred to in LR 8.6.17 R setting out the basis upon which it has reached any conclusions about whether it continues to meet the criteria in that rule.

Contact persons

LR 8.6.19RRP

4For each transaction for which it provides sponsor services, a sponsor must:

  1. (1)

    notify the FSA as soon as practicableof the name and contact details of the maincontactperson or persons in the sponsor for that transaction; and

  2. (2)

    ensure that thecontact person or persons:

    1. (a)

      have sufficient knowledge about the listed company or applicant and the proposed transactionto be able to answer queries from the FSA about it; and

    2. (b)

      are available to answer queries from the FSA on any business day between 8am and 6pm.