Top Banking Insights for UK Enterprises

Among the essential modifications made to the program was to collapse the previous premium and basic listing segments of the regulated market into a flagship single listing classification for Equity Shares in Industrial Companies (ESCC), referred to as the "commercial company" classification. Whilst the objective was to present lighter-touch guideline for the business company category (compared with the previous premium listing sector) the brand-new guidelines still represented a step up from the previous basic listing requirements.

The transition category is closed to brand-new applicants and to transfers from other classifications. The FCA has not yet set a specific end date for the transition classification, however this will be kept under review. The crucial arrangements of the UKLR sourcebook for industrial companies are set out in the table below: Secret contents of the UKLR sourcebook for business companiesUKLR 1Preliminary: all securitiesThe FCA can ignore particular UKLR requirements as it considers proper.

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UKLR 2Listing PrinciplesThe Listing Concepts require companies to, among others, establish and preserve sufficient treatments, systems and controls to allow them to abide by their obligations under the UKLR (Listing Concept 1) and handle the FCA in an open and co-operative manner (Listing Principle 2). UKLR 3Requirements for listing: all securitiesShares must be easily transferable, completely paid and devoid of all limitations on the right to transfer.

UKLR 5Equity shares (business companies): requirements for admission to listingAt least 10% of shares of the listed class needs to be dispersed to the public (i.e.

A business needs to adopt a constitution enabling it to comply with the UKLR. UKLR 6Equity shares (business business): continuing obligationsCommercial business are subject to continuing commitments, including: yearly reporting requirements (consisting of compliance with the UK Corporate Governance Code, or a description in the event of non-compliance); compliance with climate and variety disclosure requirements; and market announcement requirements.

The substantial deal announcement must include defined information, including: the benefits and threats of the transaction; a statement on the effect of the transaction on the group's incomes, assets and liabilities; details of any break cost; a "best interests" statement by the board; and any other relevant details essential to support shareholder engagement and market transparency.

UKLR 9Equity shares (commercial companies): additional issuances, dealing in own securities and treasury sharesPre-emption rights apply to the business's listed shares. Particular rules apply in relation to rights issues, open offers and placings (and an optimum 10% discount uses to open deals and placings). UKLR 10Equity shares (business companies): content of circularsShareholder circulars must abide by particular content requirements, and circulars in relation to certain transactions (including a reverse takeover) should be approved by the FCA.UKLR 20Admission to listing: procedures and proceduresSpecific procedural and documentary requirements are set out in relation to an application for listing of securities (consisting of the submission timing of using documents to the FCA). UKLR 21Suspending, cancelling, restoring listing and transfer in between listing classifications: all securitiesThe FCA might suspend the listing of a company's securities if the smooth operation of the market is, or may be, briefly jeopardised or it is essential to protect financiers.

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In addition to the brand-new business company category, the FCA also produced brand-new classifications for global secondary listings (UKLR 14) and shell companies (UKLR 13). For shell companies and SPACs, in the UKLR, the FCA mostly maintained the rules that had applied to the previous standard listing sector, with enhanced eligibility requirements setting time limits within which preliminary deals should be completed by SPACs.

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In addition, the FCA went back to a guidance-based technique permitting bigger SPACs to voluntarily put in location sufficient investor securities to prevent a presumption of suspension of listing as and when a preliminary transaction is revealed. Ahead of publication of the UKLR and to give effect to the suggestions coming out of Lord Hill's review, the FCA implemented specific modifications to eligibility criteria set out in the then Noting Rules with impact from the end of December 2021, significantly to decrease the free float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization limit for premium and standard listing sectors from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made further changes to eligibility requirements including the adoption of a single set of Noting Concepts (to reflect the collapse of the previous premium and standard listing sections into a single industrial business classification) and removed the previous premium listing requirements for a three-year income track record and "clean" working capital declaration.