Key Investment Insights for Mid-Market Enterprises

One of the essential changes made to the routine was to collapse the previous premium and standard listing sections of the regulated market into a flagship single listing category for Equity Shares in Commercial Companies (ESCC), referred to as the "business business" classification. Whilst the objective was to introduce lighter-touch policy for the business company classification (compared to the previous premium listing sector) the new guidelines still represented an action up from the previous basic listing requirements.

The shift category is closed to brand-new candidates and to transfers from other categories. The FCA has not yet set a particular end date for the shift classification, however this will be kept under review. The crucial arrangements of the UKLR sourcebook for industrial business are set out in the table below: Key contents of the UKLR sourcebook for business companiesUKLR 1Preliminary: all securitiesThe FCA can ignore particular UKLR requirements as it thinks about suitable.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Principles require business to, among others, establish and preserve sufficient treatments, systems and controls to enable them to adhere to their commitments under the UKLR (Noting Concept 1) and handle the FCA in an open and co-operative manner (Noting Concept 2). UKLR 3Requirements for listing: all securitiesShares need to be easily transferable, totally paid and devoid of all constraints on the right to move.

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

A business must embrace a constitution allowing it to comply with the UKLR. UKLR 6Equity shares (commercial business): continuing obligationsCommercial companies are subject to continuing obligations, including: yearly reporting requirements (consisting of compliance with the UK Corporate Governance Code, or a description in the occasion of non-compliance); compliance with climate and diversity disclosure requirements; and market statement requirements.

The significant deal statement need to include defined information, consisting of: the advantages and threats of the transaction; a statement on the result of the transaction on the group's revenues, assets and liabilities; information of any break fee; a "best interests" declaration by the board; and any other relevant info required to support investor engagement and market openness.

UKLR 9Equity shares (commercial companies): additional issuances, dealing in own securities and treasury sharesPre-emption rights apply to the company's noted shares. UKLR 21Suspending, cancelling, restoring listing and transfer between listing classifications: all securitiesThe FCA may suspend the listing of a business's securities if the smooth operation of the market is, or may be, briefly jeopardised or it is essential to safeguard financiers.

Strategic Review of UK Global Markets

In addition to the new business company category, the FCA also produced brand-new categories for worldwide secondary listings (UKLR 14) and shell companies (UKLR 13). For shell companies and SPACs, in the UKLR, the FCA largely maintained the guidelines that had actually applied to the previous basic listing section, with boosted eligibility requirements setting time limits within which initial transactions need to be completed by SPACs.

ANSR July UK PRs

In addition, the FCA went back to a guidance-based technique permitting bigger SPACs to willingly put in place enough financier protections to prevent an anticipation of suspension of listing as and when a preliminary transaction is revealed. Ahead of publication of the UKLR and to provide result to the recommendations coming out of Lord Hill's evaluation, the FCA executed specific modifications to eligibility criteria set out in the then Noting Rules with result from the end of December 2021, especially to decrease the free float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization threshold for premium and standard listing sectors from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made additional changes to eligibility criteria consisting of the adoption of a single set of Noting Principles (to show the collapse of the previous premium and standard listing sections into a single industrial business category) and removed the previous premium listing requirements for a three-year income track record and "tidy" working capital declaration.