Why Corporate Management Redefines Global Expansion

One of the key modifications made to the routine was to collapse the previous premium and basic listing sectors of the controlled market into a flagship single listing category for Equity Shares in Business Companies (ESCC), described as the "commercial business" category. Whilst the objective was to present lighter-touch regulation for the business company classification (compared to the previous premium listing sector) the new guidelines still represented a step up from the previous standard listing requirements.

The transition category is closed to new applicants and to transfers from other categories. 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 listed below: Secret contents of the UKLR sourcebook for business companiesUKLR 1Preliminary: all securitiesThe FCA can do without certain UKLR requirements as it considers suitable.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Principles require companies to, amongst others, establish and keep appropriate procedures, systems and controls to allow them to comply with their responsibilities under the UKLR (Noting Concept 1) and deal with the FCA in an open and co-operative way (Noting Principle 2). UKLR 3Requirements for listing: all securitiesShares should be freely transferable, completely paid and devoid of all constraints on the right to move.

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

A business should adopt a constitution permitting it to comply with the UKLR. UKLR 6Equity shares (commercial business): continuing obligationsCommercial companies are subject to continuing obligations, including: annual reporting requirements (consisting of compliance with the UK Corporate Governance Code, or an explanation in the event of non-compliance); compliance with environment and variety disclosure requirements; and market statement requirements.

The substantial transaction announcement need to include specified information, including: the advantages and dangers of the deal; a statement on the impact of the deal on the group's revenues, possessions and liabilities; details of any break charge; a "finest interests" statement by the board; and any other pertinent information necessary to support investor engagement and market transparency.

UKLR 9Equity shares (industrial business): more issuances, dealing in own securities and treasury sharesPre-emption rights apply to the company's noted shares. Specific guidelines use in relation to rights problems, open offers and placements (and a maximum 10% discount uses to open offers and placings). UKLR 10Equity shares (industrial business): material of circularsShareholder circulars should abide by particular content requirements, and circulars in relation to specific deals (including a reverse takeover) must be approved 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 (including the submission timing of providing documents to the FCA). UKLR 21Suspending, cancelling, restoring 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 might be, briefly jeopardised or it is necessary to protect financiers.

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In addition to the new industrial business classification, the FCA likewise created new categories for worldwide secondary listings (UKLR 14) and shell companies (UKLR 13). For shell business and SPACs, in the UKLR, the FCA mainly preserved the guidelines that had applied to the previous standard listing section, with enhanced eligibility requirements setting time limits within which initial transactions must be completed by SPACs.

ANSR July UK PRs

In addition, the FCA reverted to a guidance-based approach allowing bigger SPACs to willingly put in place enough investor protections to prevent a presumption of suspension of listing as and when an initial deal is announced. Ahead of publication of the UKLR and to give impact to the recommendations coming out of Lord Hill's review, the FCA executed certain changes to eligibility requirements set out in the then Listing Guidelines with impact from completion of December 2021, especially to reduce the complimentary 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 changes to eligibility criteria including the adoption of a single set of Listing Principles (to show the collapse of the previous premium and standard listing segments into a single commercial company classification) and got rid of the previous premium listing requirements for a three-year revenue performance history and "tidy" working capital declaration.