Leveraging Corporate Capital for Mid-Market Firms

Among the key changes made to the program was to collapse the previous premium and standard listing sections of the managed market into a flagship single listing classification for Equity Shares in Business Companies (ESCC), referred to as the "commercial business" classification. Whilst the intention was to present lighter-touch policy for the industrial business category (compared with the previous premium listing section) the new guidelines still represented a step up from the previous basic listing requirements.

The shift classification 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 key provisions of the UKLR sourcebook for commercial 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 proper.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Concepts need companies to, to name a few, establish and keep 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 way (Listing Principle 2). UKLR 3Requirements for listing: all securitiesShares should be freely transferable, fully paid and devoid of all constraints on the right to move.

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

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

The considerable transaction announcement should include specified information, consisting of: the benefits and risks of the transaction; a statement on the impact of the transaction on the group's revenues, possessions and liabilities; information of any break charge; a "benefits" statement by the board; and any other relevant details required to support investor engagement and market openness.

UKLR 9Equity shares (industrial business): additional issuances, handling own securities and treasury sharesPre-emption rights apply to the business's noted shares. Specific guidelines use in relation to rights issues, open deals and placements (and an optimum 10% discount applies to open deals and placings). UKLR 10Equity shares (business business): content of circularsShareholder circulars need to adhere to particular content requirements, and circulars in relation to certain deals (including a reverse takeover) needs to be authorized by the FCA.UKLR 20Admission to listing: processes and proceduresSpecific procedural and documentary requirements are set out in relation to an application for listing of securities (consisting of the submission timing of providing files to the FCA). UKLR 21Suspending, cancelling, bring back listing and transfer between listing categories: all securitiesThe FCA may suspend the listing of a business's securities if the smooth operation of the marketplace is, or may be, temporarily jeopardised or it is required to safeguard investors.

Leveraging Corporate Capital for Mid-Market Growth

In addition to the brand-new commercial business category, the FCA likewise created brand-new categories for international secondary listings (UKLR 14) and shell companies (UKLR 13). For shell business and SPACs, in the UKLR, the FCA largely maintained the rules that had used to the previous standard listing segment, with boosted eligibility requirements setting time frame within which preliminary deals need to be completed by SPACs.

ANSR July UK PRs

In addition, the FCA went back to a guidance-based approach permitting larger SPACs to voluntarily put in location enough investor securities to avoid an anticipation of suspension of listing as and when an initial deal is announced. Ahead of publication of the UKLR and to offer effect to the suggestions coming out of Lord Hill's review, the FCA implemented certain changes to eligibility requirements set out in the then Noting Rules with result from completion of December 2021, significantly 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 segments from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made further modifications to eligibility criteria including the adoption of a single set of Noting Concepts (to reflect the collapse of the previous premium and standard listing sectors into a single industrial company classification) and removed the previous premium listing requirements for a three-year earnings track record and "tidy" working capital declaration.