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LR 8.7 Supervision of sponsors

LR 8.7.1G

The FCA expects to have an open, co-operative and constructive relationship with a sponsor to enable it to have a broad picture of the sponsor's activities and its ability to satisfy the criteria for approval as a sponsor as set out in LR 8.6.5 R.

Requirement to provide information5

LR 8.7.1AR
  1. (1)

    5The FCA may by notice in writing given to a sponsor require it to provide specified documents or specified information to the FCA.

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  2. (2)

    The sponsor must as soon as practicable provide to the FCA any documents or information that it has been required to provide under (1).

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  3. (3)

    This rule applies only to documents or information reasonably required by the FCA in connection with the performance of its functions in relation to a sponsor or a company that has appointed a sponsor.

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Supervisory tools

LR 8.7.2G

The FCA uses a variety of tools to monitor whether a sponsor:

  1. (1)

    continues to satisfy the criteria for approval as a sponsor as set out in LR 8.6.5 R; and

  2. (2)

    remains in compliance with all applicable listing rules.

LR 8.7.2AR

10The FCA may impose restrictions or limitations on the services a sponsor can provide at any time following the grant of a sponsor's approval.

LR 8.7.2BG

10Situations when the FCA may impose restrictions or limitations on the services a sponsor can provide include (but are not limited to) where it appears to the FCA that:

  1. (1)

    the sponsor has no or limited relevant experience and expertise of providing certain types of sponsor services or of providing sponsor services to certain types of company; or

  2. (2)

    the sponsor does not have systems and controls in place which are appropriate for the nature of the sponsor services which the sponsor is undertaking or proposing to undertake.

[Note: A statutory notice may be required under section 88 of the Act. Where this is the case, the procedure for giving a statutory notice is set out in DEPP.]

LR 8.7.3G

FCA staff, after notifying the sponsor, may make supervisory visits to a sponsor on a periodic and an ad hoc basis.

LR 8.7.4G

The FCA will give reasonable notice to a sponsor of requests for meetings or requests for access to a sponsor's documents and records.

Requests from other regulators

LR 8.7.5G

The FCA, on behalf of other regulators, may request information from a sponsor or pass information on to other regulators to enable such regulators to discharge their functions.

Fees

LR 8.7.6R

A sponsor must pay the annual fee set out in 1FEES 41 in order to remain on the list of sponsors.

Annual notifications

LR 8.7.7R

A sponsor must provide to the FCA on or after the first business day of January in each year but no later than the last business day of January in each year:7

7
  1. (1)

    written confirmation that it continues to satisfy the criteria for approval as a sponsor as set out in LR 8.6.5 R; and5

  2. (1A)

    for each of the criteria in that rule, evidence8 of the basis upon which it considers that it meets that criterion8.5

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  3. (2)

    [deleted]5

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  4. (3)

    [deleted]5

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  5. (4)

    [deleted]5

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LR 8.7.7AR

7Written confirmation must be provided by submitting a completed Sponsor Annual Notification Form to the FCA at the FCA's address.

[Note: The Sponsor Annual Notification Form can be found on the UKLA section of the FCA's website.]

General notifications

LR 8.7.8R

A sponsor must notify the FCA in writing as soon as possible if:

  1. (1) 8
    1. (a)

      8the sponsor ceases to satisfy the criteria for approval as a sponsor set out in LR 8.6.5 R or becomes aware of any matter which, in its reasonable opinion, would be relevant to the FCA in considering whether the sponsor continues to comply with LR 8.6.6 R; or

    2. (b)

      8the sponsor becomes aware of any fact or circumstance relating to the sponsor or any of its employees engaged in the provision of sponsor services by the sponsor which, in its reasonable opinion, would be likely to adversely affect market confidence in sponsors11; or

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  2. (2)

    the sponsor, or any of its employees engaged in the provision of sponsor services by the sponsor8,5 are:

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    1. (a)

      convicted of any offence involving fraud, theft or other dishonesty; or

    2. (b)

      the subject of a bankruptcy proceeding, a receiving order or an administration order; or

  3. (3)

    any of its employees engaged in the provision of8 sponsor services5 by the sponsor8 are disqualified by a court from acting as a director of a company or from acting in a management capacity or conducting the affairs of any company; or

    5
  4. (4)

    the sponsor, or any of its employees engaged in the provision of8 sponsor services by the sponsor8,5 are subject to any public criticism, regulatory intervention or disciplinary action:

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    1. (a)

      by the FCA; or

    2. (b)

      by any designated professional body; or

    3. (c)

      by any body that is comparable to the FCA or a designated professional body; or

    4. (d)

      under any comparable legislation in any jurisdiction outside the United Kingdom; or

  5. (5)

    the sponsor resigns or is dismissed by a listed company or applicant, giving details of any relevant facts or circumstances;

  6. (6)

    the sponsor changes its name; or

  7. (7)

    [deleted]5

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  8. (8)

    a listed company or applicant denies the sponsor access to documents or information that have been the subject of a reasonable request by the sponsor; or

  9. (9)

    5it identifies or otherwise becomes aware of any material deficiency in the sponsor's systems and controls8; or2

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  10. (10)

    there is intended to be a change of control of the sponsor, any restructuring of the sponsor's group, or a re-organisation of or a substantial change to the directors, partners or employees engaged in the provision of sponsor services by the sponsor, or8

    8
  11. (11)

    there is expected to be a change in the financial position of the sponsor or any of its group companies that would be likely to adversely affect the sponsor's ability to perform sponsor services or otherwise comply with LR 8.8

LR 8.7.8AR

8Where a sponsor is of the opinion that notwithstanding the circumstances giving rise to a notification obligation under LR 8.7.8 R, it continues to satisfy the ongoing criteria for approval as a sponsor in accordance with LR 8.6.6 R, it must include in its notification to the FCA a statement to that effect and the basis for its opinion.

LR 8.7.9G

General notifications may be made in the first instance by telephone, but must be confirmed promptly in writing.

LR 8.7.10G

Written notifications should be sent to the Sponsor Supervision Team at the FCA's address.

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LR 8.7.11R

[deleted]5

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LR 8.7.12R

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LR 8.7.13R

[deleted]8

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LR 8.7.14R

[deleted]8

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LR 8.7.15G

[deleted]8

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11Non-delegation of sponsor functions 11

LR 8.7.16R

A sponsor must5 not delegate any of its functions as such, or permit another person to perform those functions, 5

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LR 8.7.17R
  1. (1)

    [deleted]11

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  2. (2)

    [deleted]11

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LR 8.7.18R

[deleted]11

LR 8.7.19R

[deleted]10

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Discipline of sponsors

LR 8.7.20G

EG3 sets out the FCA's policy on when and how it will use its disciplinary powers, including 3 in relation to a sponsor.A statutory notice may be required under section 88B of the Act. Where this is the case, the procedure for giving a statutory notice is set out in DEPP.10

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Cancellation of a sponsor's approval at the sponsor's request

LR 8.7.21G

A sponsor that intends to request the FCA to cancel its approval as a sponsor should8 comply with LR 8.7.22 R.

8
LR 8.7.21AG

8Examples of when a sponsor should submit a cancellation request pursuant to LR 8.7.22 R include, but are not limited to:

  1. (1)

    situations where the sponsor ceases to satisfy the ongoing criteria for approval as a sponsor in accordance with LR 8.6.6 R and, following a notification made under LR 8.7.8 R, there are no ongoing discussions with the FCA which could lead to the conclusion that the sponsor remains eligible; or

  2. (2)

    where there is a change of control of the sponsor or any restructuring of the sponsor's group that will result in sponsor services being provided by a different person, in which case the person that is intended to provide the sponsor services should apply for approval as a sponsor under LR 8.6 before it provides any sponsor services.

LR 8.7.22R

A request by a sponsor for its approval as a sponsor to be cancelled must be in writing and must include:

  1. (1)

    the sponsor's name;

  2. (2)

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

  3. (3)

    the date on which the sponsor requests the cancellation to take effect;

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  4. (4)

    a signed confirmation that the sponsor will not provide any sponsor services8 as of the date the request is submitted to the FCA; and

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  5. (5)

    the name and contact details of the person at the sponsor with whom the FCA should liaise with in relation to the request.

LR 8.7.23G

A sponsor may withdraw its request at any time before the 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.

LR 8.7.24G
  1. (1)

    [deleted]4

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  2. (2)

    [deleted]4

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Suspension of a sponsor’s approval at the sponsor’s request10

LR 8.7.25R

10A request by a sponsor for its approval as a sponsor to be suspended must be in writing and must include:

  1. (1)

    the sponsor's name;

  2. (2)

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

  3. (3)

    the date on which the sponsor requests the suspension to take effect;

  4. (4)

    a signed confirmation that the sponsor will not provide any sponsor services as of the date the request is submitted to the FCA; and

  5. (5)

    the name and contact details of the person at the sponsor with whom the FCA should liaise with in relation to the request.

LR 8.7.26G

10A sponsor may withdraw its request at any time before the suspension 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.

LR 8.7.26AG

11A sponsor may wish to consider submitting a suspension request under LR 8.7.25 R where the sponsor:

  1. (1)

    ceases to satisfy the ongoing criteria for approval as a sponsor in accordance with LR 8.6.6 R;

  2. (2)

    has notified the FCA in accordance with LR 8.7.8 R;

  3. (3)

    is having ongoing discussions with the FCA regarding remedial action; and

  4. (4)

    is undertaking remedial action which may result in the sponsor being able to satisfy the ongoing criteria for approval in accordance with LR 8.6.6 R.

Sponsors: advancing the FCA’s operational objectives

LR 8.7.27G

10The FCA may impose restrictions or limitations on the services a sponsor can provide or suspend a sponsor's approval under section 88E of the Act if the FCA considers it desirable to do so in order to advance one or more of its operational objectives.

[Note: A statutory notice may be required under section 88F of the Act. Where this is the case, the procedure for giving a statutory notice is set out in DEPP.]