Content Options

LR 8.1 Application

Sponsors and applicants

LR 8.1.1 R

1A sponsor must comply with:

4
  1. (1)

    LR 8.3 (Role of a sponsor: general); 4

    4
  2. (2)

    LR 8.4 (Role of a sponsor: transactions); 4

    4
  3. (3)

    4LR 8.6 (Criteria for approval as a sponsor); and

  4. (4)

    4LR 8.7 (Supervision of sponsors).

LR 8.1.1A R

4A person applying for approval as a sponsor must comply with LR 8.6 (Criteria for approval as a sponsor).

Listed companies and applicants

LR 8.1.2 R

A company with, or applying for, a premium listing3 must comply with LR 8.2 (When a sponsor must be appointed or its guidance2 obtained) and LR 8.5 (Responsibilities of listed companies).

3 3 2

LR 8.2 When a sponsor must be appointed or its guidance obtained2

When a sponsor must be appointed

LR 8.2.1 R

A company with, or applying for, a premium listing of its equity shares5 must appoint a sponsor on each occasion that it:4

  1. (1)

    is required to submit any of the following documents to the FCA in connection with6 an application for admission of equity shares5 to premium listing6:

    66
    1. (a)

      a prospectus, supplementary prospectus7 or equivalent document1; or

      6
    2. (b)

      a certificate of approval from another competent authority; or

      6
    3. (c)

      a summary document as required by PR 1.2.3R (8); or

      6
    4. (d)

      listing particulars referred to in LR 15.3.3 R or LR 16.3.4 R or supplementary listing particulars7; or2

      66
  2. (2)

    is required to submit to the FCA6 a class 1 circular for approval6; or

    6
  3. (3)

    is required to submit to the FCA6 a circular that proposes a reconstruction or a refinancing which is required by LR 9.5.12 R to include a working capital statement6; or

    6
  4. (4)

    is required to submit to the FCA6a circular for the proposed purchase of own shares: which is required by LR 13.7.1R (2) to include a working capital statement; or6

    [Note: This does not include a circular issued by a closed-ended investment company.]6

  5. (5)

    is required to do so by the FCA because it appears to the FCA that there is, or there may be, a breach of the listing rules,6 the disclosure requirements10 or the6transparency rules43

    6432

    by the listed company; or6

    6
  6. (6)

    6is required by LR 11.1.10R (2)(b) to provide a listed company8 with a confirmation that the terms of the proposed related party transaction are fair and reasonable; or

    8
  7. (7)

    6is required to submit to the FCA a related party circular which is required by LR 13.6.1R (5) to include a statement by the board that the transaction or arrangement is fair and reasonable; or

  8. (8)

    6is required by LR 8.4.3R (4) to submit to the FCA a letter from a sponsor in relation to the applicant's eligibility; or

  9. (9)

    6is required to make an announcement or request a suspension in connection with a reverse takeover under LR 5.6.6 R; or

  10. (10)

    6provides to the FCA a disclosure regime confirmation in connection with a reverse takeover under LR 5.6.12 G (1); or

  11. (11)

    6makes a disclosure announcement in connection with a reverse takeover under LR 5.6.15 G that contains a declaration described in LR 5.6.15 G (3) or LR 5.6.15 G (4); or

  12. (12)

    6submits to the FCA a letter in relation to the issuer's eligibility in connection with a reverse takeover under LR 5.6.23 G (2); or

  13. (13)

    6provides confirmation to the FCA of its severe financial difficulty for the purposes of LR 10.8.3G (2); or

  14. (14)

    6is required to provide an assessment of the appropriateness of an investment exchange or multilateral trading facility under LR 13.5.27B R; or9

  15. (15)

    9is required to provide a written opinion to the FCA under LR 11 Annex 1 (8) (Joint investment arrangements).

2Other transactions where a company with a premium listing must obtain a sponsor's guidance6

LR 8.2.2 R

If a company with a premium listing6 is proposing to enter into a transaction which due to its size or nature could amount to a class 1 transaction or a reverse takeover it must obtain the guidance of a sponsor to assess the application of the listing rules, the6disclosure requirements10 and the 6transparency rules.32

6 3
LR 8.2.3 R

If a company with a premium listing6 is proposing to enter into a transaction which is, or may be, a related party transaction it must obtain the guidance of a sponsor in order to assess the application of the listing rules, the6disclosure requirements10 and the 6transparency rules3.2

6 6 3 2

LR 8.3 Role of a sponsor: general

Responsibilities of a sponsor

LR 8.3.1 R

A1sponsor must in relation to a sponsor service:1

1
  1. (1)

    referred to in 3LR 8.2.1R (1) to (4), LR 8.2.1R (11), LR 8.2.1A R and, where relevant LR 8.2.1R (5)3, 1provide assurance to the FCA when required that the responsibilities of the company with or applying for a premium listing of its equity shares3 under the listing rules have been met;

    3
  2. (1A)

    3provide to the FCA any explanation or confirmation in such form and within such time limit as the FCA reasonably requires for the purposes of ensuring that the listing rules are being complied with by a company with or applying for a premium listing of its equity shares; and

  3. (2)

    1guide the company with or applying for a premium listing of its equity shares3 in understanding and meeting its responsibilities under the listing rules, the3disclosure requirements7 and the3transparency rules.21

    312
LR 8.3.1A R

3A sponsor must, for so long as it provides a sponsor service:

  1. (1)

    take such reasonable steps as are sufficient to ensure that any communication or information it provides to the FCA in carrying out the sponsor service is, to the best of its knowledge and belief, accurate and complete in all material respects; and

  2. (2)

    as soon as possible provide to the FCA any information of which it becomes aware that materially affects the accuracy or completeness of information it has previously provided.

LR 8.3.1B G

3Where a sponsor provides information to the FCA which is or is based on information it has received from a third party, in assessing whether a sponsor has complied with its obligations in LR 8.3.1AR (1) the FCA will have regard, amongst other things, to whether a sponsor has appropriately used its own knowledge, judgment and expertise to review and challenge the information provided by the third party.

LR 8.3.2 G

The1sponsor will be the main point of contact with the FCA for any matter referred to in LR 8.2.1 The FCA expects to discuss all issues relating to a transaction and any draft or final document directly with the sponsor. However, in appropriate circumstances, the FCA will communicate directly with the company with or applying for a premium listing of its equity shares, or its advisers3.

1 1 3
LR 8.3.2A G

3A sponsor remains responsible for complying with LR 8.3 even where a sponsor relies on the company with or applying for a premium listing of its equity shares or a third party when providing an assurance or confirmation to the FCA.

Principles for sponsors: due care and skill

LR 8.3.3 R

A sponsor must in relation to a sponsor service act with due care and skill.1

1

Principles for sponsors: duty regarding directors of listed companies

LR 8.3.4 R

Where, in relation to a sponsor service,1 a sponsor gives any guidance or advice to a listed company or applicant on 1 the application or interpretation of the listing rules or disclosure requirements7 and transparency rules2, the sponsor must take reasonable steps to satisfy itself that the director or directors of the listed company understand their responsibilities and obligations 1under the listing rules and disclosure requirements7 and transparency rules.21

1 1 2 1 1 2

Principles for sponsors: relations with the FCA

LR 8.3.5 R

A sponsor must at all times (whether in relation to a sponsor service or otherwise):1

  1. (1)

    deal with the FCA in an open and co-operative way; and1

  2. (2)

    deal with all enquiries raised by the FCA promptly.1

    1
  3. (3)

    [deleted]1

    1
LR 8.3.5A R

1If, in connection with the provision of a3sponsor service, a sponsor becomes aware that it, or a company with or applying for a premium listing of its equity shares is failing or has failed to comply with its obligations under3 the listing rules3, the3disclosure requirements7 or the transparency rules, the sponsor must promptly notify the FCA2.

3 2 3
LR 8.3.5B R

A sponsor must, in relation to a sponsor service, act with honesty and integrity.

1
LR 8.3.6 R
  1. (1)

    [deleted]1

  2. (2)

    [deleted]1

    1
  3. (3)

    [deleted]1

LR 8.3.7 G
  1. (1)

    [deleted]1

  2. (2)

    [deleted]1

    1

Principles for sponsors: identifying and managing conflicts1

LR 8.3.7A G

1The purpose of LR 8.3.7B R to 34LR 8.3.12A G5 is to ensure that conflicts of interest do not adversely affect:

5
  1. (1)

    the ability of a sponsor to perform its functions properly under this chapter; or

  2. (2)

    market confidence in sponsors.

LR 8.3.7B R

1A sponsor must take all reasonable steps to identify conflicts of interest that could adversely affect its ability to perform its functions properly under this chapter.

LR 8.3.8 G

1In identifying conflicts of interest, sponsors should also take into account3 circumstances that could:3

3 3
  1. (1)

    3create a perception in the market that a sponsor may not be able to perform its functions properly; or4

  2. (2)

    3compromise the ability of a sponsor to fulfil its obligations to the FCA in relation to the provision of a sponsor service.

LR 8.3.9 R

1A sponsor must take all reasonable steps to put in place and maintain effective organisational and administrative arrangements that ensure conflicts of interest do not adversely affect its ability to perform its functions properly under this chapter.

LR 8.3.10 G

1Disclosure of a conflict of interest will not usually be considered to be an effective organisational or administrative arrangement for the purpose of LR 8.3.9 R.

LR 8.3.11 R

1If, in relation to a sponsor service3, a sponsor is not reasonably satisfied that its organisational and administrative arrangements will ensure that a conflict of interest will not adversely affect its ability to perform its functions properly under this chapter, it must decline or cease 3to provide the sponsor services3.

3 3
LR 8.3.12 G

1 LR 8.3.11 R recognises that there will be some conflicts of interest that cannot be effectively managed. Providing sponsor services in those cases could adversely affect both a sponsor's ability to perform its functions and market confidence in the sponsor regime. If in doubt about whether a conflict can be effectively managed a sponsor should discuss the issue with the FCA before it decides if it can provide a sponsor service.

LR 8.3.12A G

3 LR 8.3.7B R , LR 8.3.9 R and LR 8.3.11 R apply for so long as the sponsor provides a sponsor service.

Principles for sponsors: acting for another sponsor1

LR 8.3.13 G

[deleted]5

5

Principles for sponsors: joint sponsors

LR 8.3.14 R

1If a listed company or applicant appoints more than one sponsor to provide a sponsor service6 then:

6
  1. (1)

    the appointment does not relieve either of the appointed sponsors of their obligations under LR 8; and

  2. (2)

    the sponsors are each responsible for complying with the obligations under LR 8 .

    66
LR 8.3.15 G

6If a listed company or applicant appoints more than one sponsor to provide a sponsor service, the FCA expects the sponsors to co-operate with each other in relation to the sponsor service, including by establishing arrangements for the sharing of information as appropriate having regard to the sponsor service.

LR 8.4 Role of a sponsor: transactions

Application for admission: new applicants

LR 8.4.1 R

LR 8.4.2 R to LR 8.4.4 G2 apply in relation to an application for admission of equity shares to premium listing65if an applicant does not have equity shares5already admitted to premium listing ,68 the conditions in LR 6.1.1A R do not apply and8, in connection with the application, the applicant is required to submit to the FCA:

2 5 5 6 8
  1. (1)

    a prospectus , supplementary prospectus8or equivalent document1; or

    88
  2. (2)

    a certificate of approval from another competent authority; or

    8
  3. (3)

    a summary document under8PR 1.2.3R (8); or6

    886
  4. (4)

    6listing particulars or supplementary listing particulars under8LR 15.3.3 R or LR 16.3.4 R.

    8
LR 8.4.2 R

A sponsor must not submit to the FCA an application on behalf of an applicant, in accordance with LR 3, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:

  1. (1)

    the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;

  2. (2)

    the applicant has satisfied all applicable requirements set out in the prospectus rules unless the home Member State of the applicant is not, or will not be, the United Kingdom;

  3. (3)

    the directors of the applicant have established procedures which enable the applicant to comply with the listing rules and the disclosure requirements9 and transparency rules3 on an ongoing basis;

    23
  4. (4)

    the directors of the applicant have established procedures which provide a reasonable basis for them to make proper judgments on an ongoing basis as to the financial position and prospects of the applicant and its group; and

  5. (5)

    the directors of the applicant have a reasonable basis on which to make the working capital statement required by LR 6.1.16 R.

New applicants: procedure

LR 8.4.3 R

A sponsor must:

  1. (1)

    submit a completed Sponsor's Declaration on an Application for Listing to the FCA either:

    2
    1. (a)

      on the day the FCA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or

    2. (b)

      at a time agreed with the FCA, if the FCA is not approving the prospectus or if it is determining whether a document is an equivalent document1;

  2. (2)

    submit a completed Shareholder Statement or Pricing Statement, as applicable, to the FCA by 9 a.m. on the day the FCA is to consider the application;

  3. (3)

    ensure that all matters known to it which, in its reasonable opinion, should be taken into account by the FCA in considering:

    1. (a)

      the application for listing; and

    2. (b)

      whether the admission of the equity shares would be detrimental to investors' interests;

    have been disclosed with sufficient prominence in the prospectus or equivalent document1or otherwise in writing to the FCA; and

  4. (4)

    submit a letter to the FCA setting out how the applicant satisfies the criteria in LR 2 (Requirements for listing - all securities),2LR 6 (Additional requirements for premium listing (commercial company))5 and, if applicable, LR 15 or LR 16,2 no later than when the first draft of the prospectus or listing particulars2is submitted (or, if the FCA is not approving a prospectus or if it is determining whether a document is an equivalent document1, at a time to be agreed with the FCA).

    25

[Note: the Sponsor's Declaration on an Application for Listing, the Shareholder Statement and the Pricing Statement forms can be found on the UKLA section of the FCA's website.]

LR 8.4.4 G

Depending on the circumstances of the case, a sponsor providing services to an applicant on an application for admission to listing may have to confirm in writing to the FCA that the board of the applicant has allotted theequity shares.5

[Note: see LR 3.3.4 R]

5
LR 8.4.5 R
2
  1. (1)

    [deleted]2

    2
  2. (2)

    [deleted]2

    2
  3. (3)

    [deleted]2

    2
LR 8.4.6 R
  1. (1)

    [deleted]2

    2
    1. (a)

      [deleted]2

      2
    2. (b)

      [deleted]2

      2
  2. (2)

    [deleted]2

    2

Application for admission: further issues

LR 8.4.7 R

LR 8.4.8 R to LR 8.4.10 G apply in relation to an application for admission of equity shares5of an applicant that has equity shares5 already listed or in circumstances in which LR 6.1.1A R applies6.

5 5
LR 8.4.8 R

A sponsor must not submit to the FCA an application on behalf of an applicant, in accordance with LR 3 (Listing applications), unless it has come to a reasonable opinion, after having made due and careful enquiry, that:

  1. (1)

    the applicant has satisfied all requirements of the listing rules relevant to an application for admission to listing;

  2. (2)

    the applicant has satisfied all applicable requirements set out in the prospectus rules unless the home Member State of the applicant is not, or will not be, the United Kingdom; and

  3. (3)

    the directors of the applicant have a reasonable basis on which to make the working capital statement required by LR 6.1.16 R or a qualified working capital statement in accordance with LR 6.1.17 G (as the case may be).1

Further issues: procedure

LR 8.4.9 R

A sponsor must:

  1. (1)

    submit a completed Sponsor's Declaration on an Application for Listing to the FCA either:

    1. (a)

      on the day the FCA is to consider the application for approval of the prospectus and prior to the time the prospectus is approved; or1

      1
    2. (b)

      at a time agreed with the FCA if the FCA is not approving the prospectus or if it is determining whether a document is an equivalent document1;

  2. (2)

    submit a completed Shareholder Statement or Pricing Statement, as applicable, to the FCA by 9 a.m. on the day the FCA is to consider the application; and

    2
  3. (3)

    ensure that all matters known to it which, in its reasonable opinion, should be taken into account by the FCA in considering the application for listing have been disclosed with sufficient prominence in the prospectus or equivalent document1or otherwise in writing to the FCA.

[Note: The Sponsor's Declaration on an Application for Listing, the Shareholder Statement and the Pricing Statement forms can be found on the UKLA section of the FCA's website.]

LR 8.4.10 G

Depending on the circumstances of the case, a sponsor providing services to an applicant on an application for admission to listing may have to confirm in writing to the FCA the number of equity shares5 to be allotted or admitted1. [Note: see LR 3.3.4 R8]

1 5 1 8

Class 1 circulars, refinancing and purchase of own equity shares

LR 8.4.11 R

LR 8.4.12 R to LR 8.4.13 R apply in relation to transactions involving an issuer with 5 a premium listing4of equity shares5that is required to submit to the FCA for approval8:

5 4
  1. (1)

    a class 1 circular; or4

    8
  2. (2)

    a circular that proposes a reconstruction or a re-financing which does not constitute a class 1 transaction; or

    8
  3. (3)

    a circular for the proposed purchase of own shares:8

    8
    1. (a)

      which does not constitute a class 1 circular; and

    2. (b)

      is required by LR 13.7.1R (2) to include a working capital statement.

LR 8.4.12 R

A sponsor must not submit to the FCA, on behalf of a listed company, a circular regarding a transaction set out in LR 8.4.11 R for approval8, unless the sponsor has come to a reasonable opinion, after having made due and careful enquiry, that:

8
  1. (1)

    the listed company has satisfied all requirements of the listing rules relevant to the production of a class 1 circular or other circular;

  2. (2)

    the transaction will not have an adverse impact on the listed company's ability to comply with the listing rules or the disclosure requirements9 and transparency rules;3 and2

    23
  3. (3)

    the directors of the listed company have a reasonable basis on which to make the working capital statement required by LR 9.5.12 R, LR 13.4.1 R or LR 13.7.1 R.

Circulars: procedure

LR 8.4.13 R

A sponsor acting on a transaction falling within LR 8.4.11 R must:

  1. (1)

    submit a completed Sponsor's Declaration for the Production of a Circular to the FCA on the day the circular is to be approved by the FCA and prior to the time the circular is approved;

  2. (2)

    submit a completed Pricing Statement, if applicable, to the FCA by 9 a.m on the day the FCA is to consider the application; and

  3. (3)

    ensure that all matters known to it which, in its reasonable opinion, should be taken into account by the FCA in considering the transaction have been disclosed with sufficient prominence in the documentation or otherwise in writing to the FCA.

[Note: The Sponsor's Declaration for the Production of a Circular and the Pricing Statement forms can be found on the UKLA section of the FCA's website.]

4

Applying for transfer between listing categories

LR 8.4.14 R

In relation to a proposed transfer under LR 5.4A, if a sponsor is appointed6 in accordance with LR 8.2.1A R, it6 must:

6
  1. (1)

    submit a letter to the FCA setting out how the issuer satisfies each listing rule requirement relevant to the category of listing to which it wishes to transfer, by no later than when the first draft of the circular or announcement required under LR 5.4A is submitted;

  2. (2)

    submit a completed Sponsor’s Declaration for a Transfer of Listing7 to the FCA for the proposed transfer on the day the circular or announcement is to be approved by the FCA and before it is approved; and

  3. (3)

    ensure that all matters known to it which, in its reasonable opinion, should be taken into account by the FCA in considering the transfer between listing categories have been disclosed with sufficient prominence in the circular or announcement referred to in LR 5.4A or otherwise in writing to the FCA.

[Note: The Sponsor’s Declaration for a Transfer of Listing7 can be found on the UKLA section of the FCA website.]

7
LR 8.4.15 R

A sponsor must not submit to the FCA on behalf of an issuer a final circular or announcement for approval or a Sponsor’s Declaration for a Transfer of Listing7, unless it has come to a reasonable opinion, after having made due and careful enquiry, that:

7
  1. (1)

    the issuer satisfies all eligibility requirements of the listing rules that are relevant to the new category to which it is seeking to transfer;

  2. (2)

    the issuer has satisfied all requirements relevant to the production of the circular required under LR 5.4A.4 R or the announcement required under LR 5.4A.5 R (whichever is relevant);

  3. (3)

    the directors of the issuer have established procedures which enable the issuer to comply with the listing rules, the disclosure requirements9 and the transparency rules on an ongoing basis;

  4. (4)

    the directors of the issuer have established procedures which provide a reasonable basis for them to make proper judgments on an ongoing basis as to the financial position and prospects of the issuer and its group; and

  5. (5)

    the directors of the issuer have a reasonable basis on which to make the working capital statement (if any) required in connection with the transfer.

LR 8.4.16 R

LR 8.4.15R (3) , LR 8.4.15R (4) and LR 8.4.15R (5) do not apply in relation to an issuer that was required to meet these requirements under its existing listing category.

Reverse takeovers

LR 8.4.17 R

6A sponsor acting on a reverse takeover where the issuer decides to make a disclosure announcement under LR 5.6.15 G must:

  1. (1)

    submit to the FCA under LR 5.6.17 R a completed Sponsor’s Declaration for a Reverse Takeover Announcement7;

  2. (2)

    not submit to the FCA the Sponsor’s Declaration for a Reverse Takeover Announcement7 unless it has come to a reasonable opinion, after having made due and careful enquiry, that it is reasonable for the issuer to provide the declarations described in LR 5.6.15 G (3) and LR 5.6.15 G (4); and

  3. (3)

    ensure that all matters known to it which, in its reasonable opinion, should be taken into account by the FCA in considering a proposed disclosure announcement under LR 5.6.15 G have been disclosed with sufficient prominence in the announcement or otherwise in writing to the FCA.

    8

[Note: The Sponsor's Declaration for a Reverse Takeover Announcement can be found on the UKLA section of the FCA website.]8

LR 8.5 Responsibilities of listed companies

Notifications to FCA

LR 8.5.1 R

A listed company or applicant must ensure that1 the FCA is informed 1promptly of the name and contact details of any 2sponsor appointed in accordance with the listing rules (either by the listed company or applicant or by the sponsor itself)1.

1 2
LR 8.5.2 R
  1. (1)

    A listed company or applicant must notify the FCA in writing immediately of the resignation or dismissal of any sponsor that it had appointed.

  2. (2)

    In the case of a dismissal, the reasons for the dismissal must be included in the notification.

  3. (3)

    The notification must be copied to the sponsor.

Listed company appoints more than one sponsor

LR 8.5.3 R

Where a listed company or applicant appoints more than one sponsor to provide a sponsor service4, the company must:

  1. (1)

    ensure that one sponsor4 takes responsibility for contact with the FCA in respect of administrative arrangements for the sponsor service4; and2

    44
  2. (2)

    inform the FCA promptly4, in writing, of the name and contact details of the sponsor taking responsibility under (1).4

    4
LR 8.5.4 R

[deleted]2

2
LR 8.5.5 G

[deleted]2

2

Cooperation with sponsors

LR 8.5.6 R

3In relation to the provision of a sponsor service, a company with or applying for a premium listing of its equity shares must cooperate with its sponsor by providing the sponsor with all information reasonably requested by the sponsor for the purpose of carrying out the sponsor service in accordance with LR 8.

LR 8.6 Criteria for approval as a sponsor

List of sponsors

LR 8.6.1 G

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

Application for approval as a sponsor

LR 8.6.2 R

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

4
  1. (1)

    a completed Sponsor Firm Application Form; and4

  2. (2)

    [deleted]4

    4
  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 FCA's website.]

4
LR 8.6.3 R

A person wanting to provide sponsor services4and be included on the list of sponsors must also submit:

4
  1. (1)

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

  2. (2)

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

LR 8.6.4 G

When considering an application for approval as a sponsor the FCA 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 FCA considers relevant to the application; and6

  3. (3)

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

    2
  4. (4)

    [deleted]2

    2

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

4 3

Criteria for approval as a sponsor

LR 8.6.5 R

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

4
  1. (1)

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

  2. (2)

    is 4competent to provide8sponsor services4 in accordance with LR 88; and

    8
  3. (3)

    has appropriate 4systems and controls in place to carry out its role as a sponsor in accordance with LR 884.

    488
LR 8.6.5A R

7The FCA may impose restrictions or limitations on the services a sponsor can provide at the time of granting a sponsor's approval.

LR 8.6.5B G

7Situations 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 employees of the person applying to be a sponsor whom it is proposed will perform sponsor services have 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 person applying to be a sponsor does not have systems and controls in place which are appropriate for the nature of the sponsor services which the person applying to be a sponsor proposes 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 8.6.5C G

8Where a person wishes to apply for approval as a sponsor to provide a limited range of sponsor services, it may do so on the basis that the FCA will impose a limitation or restriction on its approval (in accordance with section 88 of the Act). In such circumstances, the FCA will assess whether the person satisfies LR 8.6.5R (2) and LR 8.6.5R (3) taking into consideration the sponsor services to which the approval, as formally limited or restricted by the FCA, will relate.

8Continuing obligations

LR 8.6.6 R

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

Competence of a sponsor

LR 8.6.7 R

A sponsor, or a 8person48applying for approval as a sponsor, will not satisfy LR 8.6.5R (2) unless it has:

4 8 8 8
  1. (1)

    8submitted a sponsor declaration to the FCA:

    1. (a)

      for a person applying for approval as a sponsor, within three years of the date of its application; and

    2. (b)

      for a sponsor, within the previous three years; and

  2. (2)

    8a sufficient number of employees with the skills, knowledge and expertise necessary for it to:

    1. (a)

      provide sponsor services in accordance with LR 8.3;

    2. (b)

      understand:

      1. (i)

        the rules, guidance and ESMA publications directly relevant to sponsor services;

      2. (ii)

        the procedural requirements and processes of the FCA;

      3. (iii)

        the due diligence process required in order to provide sponsor services in accordance with LR 8.3 and LR 8.4;

      4. (iv)

        the responsibilities and obligations of a sponsor in LR 8; and

      5. (v)

        specialist industry sectors, if relevant to the sponsor services it provides or intends to provide; and

    3. (c)

      be able to comply with the key contact requirements in LR 8.6.19 R.

LR 8.6.7A G

8To determine whether a sponsor or a person applying for approval as a sponsor is able to satisfy LR 8.6.7R (1)(a), the FCA may consider whether any of the person'semployees have had material involvement in the provision of sponsor services that have required the submission of a sponsor declaration within the previous three years.

LR 8.6.7B G

8In exceptional circumstances, the FCA may consider dispensing with, or modifying, the requirement in LR 8.6.7R (1) in accordance with LR 1.2.1 R.

LR 8.6.7C G

8In assessing whether a sponsor or a person applying for approval as a sponsor satisfies LR 8.6.7R (2), the FCA will consider 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 transactions it undertakes;

  4. (4)

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

  5. (5)

    the degree of risk associated with the transactions it undertakes or anticipates undertaking in the following year.

LR 8.6.7D G

8Notwithstanding LR 8.6.7C G, when considering whether a sponsor satisfies LR 8.6.7R (2)(c) the FCA expects a sponsor to have no less than two employees who are able to satisfy the key contact requirements in LR 8.6.19R (2).

LR 8.6.8 G
4
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
  3. (3)

    [deleted]4

    4
LR 8.6.9 G
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
    1. (a)

      [deleted]4

      444
    2. (b)

      [deleted]4

      4
  3. (3)

    [deleted]4

    4
LR 8.6.9A G

[deleted]8

LR 8.6.9B G

4In assessing whether a sponsor or a8person applying for approval as a sponsor can demonstrate it is competent in the areas required under LR 8.6.7R (2), the FCA may also take into account, where relevant, the guidance or advice on the listing rules or disclosure requirements9 and transparency rules5the sponsor or8person has given in circumstances other than in providing sponsor services.

8 8 5
LR 8.6.10 R

[deleted]4

4
LR 8.6.11 G

[deleted]4

4

Systems and controls: general

LR 8.6.12 R

8A sponsor or a person applying for approval as a sponsor will not satisfy LR 8.6.5R (3) unless it has in place:

  1. (1)

    clear and effective reporting lines for the provision of sponsor services (including clear and effective management responsibilities);

  2. (1A)

    effective systems and controls which require employees with management responsibilities for the provision of sponsor services to understand and apply the requirements of LR 8;

  3. (2)

    effective systems and controls for the appropriate supervision of employees engaged in the provision of sponsor services by the sponsor;

  4. (3)

    effective systems and controls for compliance with all applicable listing rules at all times, including when performing sponsor services;

  5. (4)

    [deleted]

  6. (5)

    [deleted]

  7. (6)

    effective systems and controls which require appropriate staffing arrangements for providing each sponsor service in line with the principles for sponsors in LR 8.3;

  8. (7)

    effective systems and controls for employees engaged in the provision of sponsor services to receive appropriate guidance and training to provide each sponsor service in line with the principles for sponsors in LR 8.3;

  9. (8)

    effective systems and controls to identify and manage conflicts of interest;

  10. (9)

    effective systems and controls for compliance with each of the requirements in LR 8.6.7R (2)(b); and

  11. (10)

    systems and controls which comply with the requirements of LR 8.6.16A R (Record management).

LR 8.6.13 G

When considering a sponsor's ability to comply with LR 8.6.12 R, the FCA will consider8 a variety of factors, including:

8
  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;

    4
  4. (4)

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

    4
  5. (5)

    the degree of risk associated with the transactions it undertakes or anticipates undertaking in the following year8.4

Systems and controls: conflicts of interest4

LR 8.6.13A G

4A sponsor will generally be regarded as having appropriate systems and controls for identifying and managing conflicts6 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; and6

  3. (3)

    to ensure that individuals within the sponsor are appropriately trained to enable them to identify, escalate and manage conflicts of interest.6

    6
  4. (4)

    [deleted]6

    6
LR 8.6.13B G

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 8.6.14 G

[deleted]4

4
4
LR 8.6.15 R

[deleted]4

4
LR 8.6.16 G

[deleted]4

4
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
  3. (3)

    [deleted]4

    4
    1. (a)

      [deleted]4

      4
    2. (b)

      [deleted]4

      4
    3. (c)

      [deleted]4

      4
  4. (4)

    [deleted]4

    4

Systems and controls: record management

LR 8.6.16A R

6A sponsor must have effective arrangements to create and retain for six years accessible records which are sufficient to be capable of demonstrating that it has provided sponsor services and otherwise complied with its obligations under LR 8 including:

8 8
  1. (1)

    where a declaration is to be submitted to the FCA:8

    8
    1. (a)

      under LR 8.4.3R (1), LR 8.4.9R (1), LR 8.4.13R (1), LR 8.4.14R (2) or LR 8.4.17 R; or

    2. (b)

      pursuant to an appointment under LR 8.2.1R (5);

    the basis of each declaration given;8

  2. (2)

    where any opinion, assurance or confirmation is provided by a sponsor to the FCA or a company with or applying for a premium listing in relation to a sponsor service, the basis of that opinion, assurance or confirmation;

  3. (3)

    where a sponsor provides guidance to a company with or applying for a premium listing pursuant to LR 8.2.2 R, LR 8.2.3 R or LR 8.3.1R (2), the basis upon which the guidance is given and upon which any judgments or opinions underlying the guidance have been made or given; and

  4. (4)

    the steps taken to comply with its obligations under LR 8.3.7B R, LR 8.3.9 R ,8LR 8.3.11 R and LR 8.6.6 R.

    88
LR 8.6.16B G

6Records should:

  1. (1)

    be capable of timely retrieval; and

  2. (2)

    include material communications which relate to the provision of sponsor services, including any advice or guidance given to a company with or applying for a premium listing in relation to their responsibilities under the listing rules, the disclosure requirements9 and the transparency rules.

LR 8.6.16C G

6In considering whether a sponsor has satisfied the requirements regarding sufficiency of records in LR 8.6.16A R, the FCA will consider whether the records would enable a person with general knowledge of the sponsor regime but no specific knowledge of the actual sponsor service undertaken to understand and verify the basis upon which material judgments have been made throughout the provision of the sponsor service.

6
LR 8.6.17 R

[deleted]6

LR 8.6.18 R

[deleted]6

4 6

8Key contact8

LR 8.6.19 R

4For each 8sponsor service requiring the submission of a document to the FCA or contact with the FCA, a sponsor must:

8
  1. (1)

    at the time of submission or on first making contact with the FCA8notify the FCAof the name and contact details of a key 8contact within8 the sponsor for that matter8; and

    8888
  2. (2)

    ensure that its key8contact :

    88
    1. (a)

      has8 sufficient knowledge about the listed company or applicant and the proposed matter8to be able to answer queries from the FCA about it;

      888
    2. (b)

      is8 available to answer queries from the FCA on any business day between 76am and 6pm;

      86
    3. (c)

      is authorised to make representations to the FCA for and on behalf of the sponsor;8

    4. (d)

      possesses technical knowledge of rules, guidance and ESMA publications directly relevant to the sponsor service; and8

    5. (e)

      understands the responsibilities and obligations of the sponsor under LR 8 in relation to the sponsor service.8

LR 8.6.20 G

8The FCA expects an employee carrying out the role of key contact to have provided a sponsor service in the previous three years.

LR 8.7 Supervision of sponsors

LR 8.7.1 G

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 8.7.1A R
  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.

    11
  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).

    11
  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.

    11

Supervisory tools

LR 8.7.2 G

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 8.7.2A R

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 8.7.2B G

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 8.7.3 G

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

LR 8.7.4 G

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 8.7.5 G

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 8.7.6 R

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

Annual notifications

LR 8.7.7 R

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

    88
  3. (2)

    [deleted]5

    5
  4. (3)

    [deleted]5

    5
  5. (4)

    [deleted]5

    5
LR 8.7.7A R

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 8.7.8 R

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

      9
  2. (2)

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

    58
    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 of8sponsor 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 of8sponsor services by the sponsor8,5 are subject to any public criticism, regulatory intervention or disciplinary action:

    58
    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

    5
  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

    582
  10. (10)

    there is intended to be a change of control of the sponsor, any restructuring of the sponsor'sgroup, 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 groupcompanies that would be likely to adversely affect the sponsor's ability to perform sponsor services or otherwise comply with LR 8.8

LR 8.7.8A R

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 8.7.9 G

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

LR 8.7.10 G

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

5
LR 8.7.11 R

[deleted]5

2 5
8
LR 8.7.12 R

8[deleted]

5 8
LR 8.7.13 R

[deleted]8

5 6 5 5 8
LR 8.7.14 R

[deleted]8

6 8
LR 8.7.15 G

[deleted]8

5 8

11Non-delegation of sponsor functions 11

LR 8.7.16 R

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

5 11 5 11 11 11
LR 8.7.17 R
  1. (1)

    [deleted]11

    511
  2. (2)

    [deleted]11

    5511
LR 8.7.18 R

[deleted]11

LR 8.7.19 R

[deleted]10

10 10

Discipline of sponsors

LR 8.7.20 G

EG 3 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

3 10 10

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

LR 8.7.21 G

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 8.7.21A G

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'sgroup 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 8.7.22 R

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;

    4
  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

    8
  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 8.7.23 G

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 8.7.24 G
  1. (1)

    [deleted]4

    34
  2. (2)

    [deleted]4

    34

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

LR 8.7.25 R

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 8.7.26 G

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 8.7.26A G

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 8.7.27 G

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.]