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REC 2.12 4Availability of relevant information and admission of financial instruments to trading4 (UK RIEs only)

REC 2.12.1UK

Schedule to the Recognition Requirements Regulations, Paragraph 4(2)(c)

4Without prejudice to the generality of sub-paragraph [4(1)], the [UK RIE] must ensure that -

(c)

appropriate arrangements are made forrelevant informationto be made available (whether by the [UK RIE] or, where appropriate, byissuersof the [specified investments]) topersonsengaged indealingin [specified investments] on the [UK RIE];

REC 2.12.2UK

Schedule to the Recognition Requirements Regulations, Paragraph 4(3)

4In sub-paragraph [4(2)(c)],

"relevant information" means information which is relevant in determining the current value of the [specified investments].

REC 2.12.2AUK

Schedule to the Recognition Requirements Regulations, Paragraph 7A

4(1)

The [UK RIE] must make clear and transparent rules concerning the admission of financial instruments to trading on any financial market operated by it.

(2)

The rules must ensure that all financial instruments admitted to trading on any regulated market operated by the [UK RIE] are capable of being traded in a fair, orderly and efficient manner (in accordance with Chapter V of the [MiFID Regulation], where applicable).

(3)

The rules must ensure that -

(a)

all transferable securities admitted to trading on a regulated market operated by the [UK RIE] are freely negotiable (in accordance with Chapter V of the [MiFID Regulation], where applicable); and

(b)

all contracts for derivatives admitted to trading on a regulated market operated by the [UK RIE] are designed so as to allow for their orderly pricing as well as for the existence of effective settlement conditions.

(4)

The [UK RIE] must maintain arrangements to provide sufficient publicly available information (or satisfy itself that sufficient information is publicly available) to enable the users of a multilateral trading facility operated by it to form investment judgments, taking into account both the nature of the users and the types of instrument traded.

(5)

The [UK RIE] must maintain effective arrangements to verify that issuers of transferable securities admitted to trading on a regulated market operated by it comply with the disclosure obligations.

(6)

The [UK RIE] must maintain arrangements to assist users of a regulated market operated by it to obtain access to information made public under the disclosure obligations.

(7)

The [UK RIE] must maintain arrangements regularly to review whether the financial instruments admitted to trading on a regulated market operated by it comply with the admission requirements for those instruments.

(8)

The rules must provide that where a [UK RIE], without obtaining the consent of the issuer, admits to trading on a regulated market operated by it a transferable security which has been admitted to trading on another regulated market, the [UK RIE] -

(a)

must inform the issuer of that security as soon as is reasonably practicable; and

(b)

may not require the issuer of that security to demonstrate compliance with the disclosure obligations.

(9)

The rules must provide that where a [UK RIE], without obtaining the consent of the issuer, admits to trading on a multilateral trading facility operated by it a transferable security which has been admitted to trading on a regulated market, it may not require the issuer of that security to demonstrate compliance with the disclosure obligations.

...

(11)

This paragraph is without prejudice to the generality of paragraph 4.

REC 2.12.2BEU

Article 35 of the MiFID Regulation

4Transferable securities

1.

Transferable securities shall be considered freely negotiable for the purposes of Article 40(1) of [MiFID] [(see REC 2.12.2A UK)] if they can be traded between the parties to a transaction, and subsequently transferred without restriction, and if all securities within the same class as the security in question are fungible.

2.

Transferable securities which are subject to a restriction on transfer shall not be considered as freely negotiable unless the restriction is not likely to disturb the market.

3.

Transferable securities that are not fully paid may be considered as freely negotiable, if arrangements have been made to ensure that the negotiability of such securities is not restricted and that adequate information concerning the fact that the securities are not fully paid, and the implications of that fact for shareholders, is publicly available.

4.

When exercising its discretion whether to admit a share to trading, a regulated market shall, in assessing whether the share is capable of being traded in a fair, orderly and efficient manner, take into account the following:

(a)

the distribution of those shares to the public; and

(b)

such historical financial information, information about the issuer, and information providing a business overview as is required to be prepared under [the PD], or is or will be otherwise publicly available.

5.

A transferable security that is officially listed in accordance with [CARD], and the listing of which is not suspended, shall be deemed to be freely negotiable and capable of being traded in a fair, orderly and efficient manner.

6.

For the purposes of Article 40(1) of [MiFID] [(see REC 2.12.2A UK)], when assessing whether a transferable security referred to Article 4(1)(18)(c) of [MiFID] is capable of being traded in a fair, orderly and efficient manner, the regulated market shall take into account, depending on the nature of the security being admitted, whether the following criteria are satisfied:

(a)

the terms of the security are clear and unambiguous and allow for a correlation between the price of the security and the price or other value measure of the underlying;

(b)

the price or other value measure of the underlying is reliable and publicly available;

(c)

there is sufficient information publicly available of a kind needed to value the security;

(d)

the arrangements for determining the settlement price of the security ensure that this price properly reflects the price or other value measure of the underlying;

(e)

where the settlement of the security requires or provides for the possibility of the delivery of an underlying security or asset rather than cash settlement, there are adequate settlement and delivery procedures for that underlying as well as adequate arrangements to obtain relevant information about that underlying.

REC 2.12.2CEU

Recital 19 to the MiFID Regulation

4For the purposes of the provisions of [the MiFID Regulation] as to the admission to trading on a regulated market of a transferable security as defined in article 4(1)(18)(c) of [MiFID], [(see REC 2.12.2B EU6(c))], in the case of a security within the meaning of [the PD], there should be considered to be sufficient information publicly available of a kind needed to value that financial instrument.

REC 2.12.2DEU

Article 36 of the MiFID Regulation

4Units in collective investment undertakings

1.

A regulated market shall, when admitting to trading units in a collective investment undertaking, whether or not that undertaking is constituted in accordance with [the UCITS Directive], satisfy itself that the collective investment undertaking complies or has complied with the registration, notification or other procedures which are a necessary precondition for the marketing of the collective investment undertaking in the jurisdiction of the regulated market.

2.

Without prejudice to [the UCITS Directive] or any other Community legislation or national law relating to collective investment undertakings, Member States may provide that compliance with the requirements referred to in paragraph 1 is not a necessary precondition for the admission of units in a collective investment undertaking to trading on a regulated market.

3.

When assessing whether units in an open-ended collective investment undertaking are capable of being traded in a fair, orderly and efficient manner in accordance with Article 40(1) of [MiFID] [(see REC 2.12.2A UK)], the regulated market shall take the following aspects into account:

(a)

the distribution of those units to the public;

(b)

whether there are appropriate market-making arrangements, or whether the management company of the scheme provides appropriate alternative arrangements for investors to redeem the units;

(c)

whether the value of the units is made sufficiently transparent to investors by means of the periodic publication of the net asset value.

4.

When assessing whether units in a closed-end collective investment undertaking are capable of being traded in a fair, orderly and efficient manner, in accordance with Article 40(1) of [MiFID] [(see REC 2.12.2A UK)], the regulated market shall take the following aspects into account:

(a)

the distribution of those units to the public;

(b)

whether the value of the units is made sufficiently transparent to investors, either by publication of information on the fund's investment strategy or by the periodic publication of net asset value.

REC 2.12.2EEU

Article 37 of the MiFID Regulation

4Derivatives

1.

When admitting to trading a financial instrument of a kind listed in points 4 to 10 of Section C of Annex I to [MiFID], regulated markets shall verify that the following conditions are satisfied:

(a)

the terms of the contract establishing the financial instrument must be clear and unambiguous, and enable a correlation between the price of the financial instrument and the price or other value measure of the underlying;

(b)

the price or other value measure of the underlying must be reliable and publicly available;

(c)

sufficient information of a kind needed to value the derivative must be publicly available;

(d)

the arrangements for determining the settlement price of the contract must be such that the price properly reflects the price or other value measure of the underlying;

(e)

where the settlement of the derivative requires or provides for the possibility of the delivery of an underlying security or asset rather than cash settlement, there must be adequate arrangements to enable market participants to obtain relevant information about that underlying, as well as adequate settlement and delivery procedures for the underlying.

2.

Where the financial instruments concerned are of a kind listed in Sections C (5), (6), (7) or (10) of Annex I to [MiFID], point (b) of paragraph 1 shall not apply if the following conditions are satisfied:

(a)

the contract establishing that instrument must be likely to provide a means of disclosing to the market, or enabling the market to assess, the price or other value measure of the underlying, where the price or value measure is not otherwise publicly available;

(b)

the regulated market must ensure that appropriate supervisory arrangements are in place to monitor trading and settlement in such financial instruments;

(c)

the regulated market must ensure that settlement and delivery, whether physical delivery or by cash settlement, can be effected in accordance with the contract terms and conditions of those financial instruments.

REC 2.12.3D

[deleted]3

2
REC 2.12.4G

[deleted]4

4
REC 2.12.5G

[deleted]4

4
REC 2.12.6G

[deleted]4

4
REC 2.12.7G

[deleted]4

4
REC 2.12.8G

[deleted]4

4
REC 2.12.9G

[deleted]4

4
REC 2.12.10G

[deleted]4

4

Proper information

REC 2.12.11G

In determining whether appropriate arrangements have been made to make relevant information available to persons engaged in dealing in specified investments admitted to trading on the UK RIE, the FCA5 may have regard to:

5
  1. (1)

    the extent to which members and clients for whom they act are able to obtain information about those specified investments, either through accepted channels for dissemination of information or through other regularly and widely accessible communication media, to make a reasonably informed judgment about the value and the risks associated with those specified investments in a timely fashion;

  2. (2)

    what restrictions, if any, there are on the dissemination of relevant information to the UK RIE's members and clients for whom they act; and

  3. (3)

    whether relevant information is or can be kept to restricted groups of persons in such a way as to facilitate or encourage dealing in contravention of the Market Abuse Regulation6.

Own means of dissemination

REC 2.12.12G

UK RIEs do not need to maintain their own arrangements for disseminating news or information about specified investments (or underlying assets) to their members where they have made adequate arrangements for other persons to do so on their behalf or there are other effective and reliable arrangements for this purpose.

3
REC 2.12.13G

[deleted]23

3

4Rules concerning the admission of financial instruments to trading on a multilateral trading facility

REC 2.12.14G

4In determining whether a UK RIE has clear and transparent rules concerning the admission of financial instruments to trading on any multilateral trading facility operated by it, the FCA5 considers that it is reasonable that the rules be based on criteria designed to promote fair and orderly trading (see REC 2.6.2 UK). In determining whether the rules are based on such criteria, the FCA5 may have regard to:

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  1. (1)

    whether there is a sufficient range of persons already holding the financial instrument (or, where relevant, the underlying asset) or interested in dealing in it to bring about adequate forces of supply and demand;

  2. (2)

    the extent to which there are any limitations on the persons who may hold or deal in the financial instrument, or the amounts of the financial instrument which may be held; and

  3. (3)

    whether the UK RIE has adequate procedures for obtaining information relevant for determining whether or not to suspend or discontinue trading in that financial instrument.