Listing Regime and Obligations
Rules and regulations
Main Market companies subscribe to one of the world’s most respected sets of admission and disclosure standards, thereby demonstrating the quality of their business to investors. This helps to encourage investor confidence and maintain Europe's deepest pool of capital.
The regulatory requirements and considerations for a Main Market company may vary depending on the segment of the market its on:
- Premium - the UK Listing Rules and London Stock Exchange's Admission and Disclosure Standards
- High Growth Segment - London Stock Exchange's High Growth Segment Rules and Admission and Disclosure Standards
- Standard - the UK Listing Rules and London Stock Exchange's Admission and Disclosure Standards
However, as the Main Market is an EU Regulated Market, companies must produce a Prospectus approved by the UK Listing Authority (UKLA) regardless of the segment they are applying for admission to.
In its role as the UKLA, the Financial Conduct Authority has a legal obligation to oversee the admission process to a Regulated Market, to assess issuers' eligibility and to ensure that its rules are met. This involves the UKLA reviewing and approving the Prospectus (or Listing Particulars). This document – which will be submitted to the UKLA by your Sponsor or Key Adviser – primarily contains information on the company and its business, and must satisfy the Prospectus Rules and the Listing Rules (as applicable).
The UKLA maintains a dialogue with your company’s advisers until the relevant eligibility requirements are met. In parallel to the UKLA’s application process, you must apply to London Stock Exchange to have your company’s securities admitted to trading on its markets and meet the requirements of our Admission and Disclosure Standards (and the HGS Rules, if relevant). London Stock Exchange works to ensure your company receives the maximum benefit from being traded on its markets. If you are considering applying to join the Main Market you should contact us as early as possible so that we can assist you through the admission process.
Admission becomes effective only when all the relevant documents have been approved by the UKLA.Once your company is admitted, it becomes subject to the continuing obligations which apply to all admitted companies.
The principal initial and ongoing regulatory considerations for a Main Market company include the requirements of the UK Listing Authority (UKLA) and London Stock Exchange’s Admission and Disclosure Standards. The main differences between the ongoing obligations for each listing route can be found in our document library.
The standards below apply to all publicly quoted companies (both the Main Market and AIM).
The City Code on Takeovers and Mergers (UK companies only)
The Code is designed principally to ensure that shareholders are treated fairly and have the opportunity to decide on the merits of a takeover and that shareholders of the same class are all treated equally by an offeror. The Code also provides an orderly framework within which takeovers are conducted and - in conjunction with other regulatory regimes - promotes the integrity of the financial markets.
These are applied as directed through the Financial Reporting Council and the International Accounting Standards Board.
Super equivalent obligations
A Premium listing of equity demonstrates that the company meets London's world-class standard of regulation − the highest and most trusted globally − based on the requirements of the UK Listing Authority (UKLA) and often referred to as 'super-equivalent'.
The UK Corporate Governance Code
Premium listed companies subscribe to the principles laid down in the Code (which sets out methods for best practice corporate governance) or must provide an explanation why they do not. Effective corporate governance helps boards achieve their strategic objectives and builds value in the business which ultimately benefits shareholders.
The Model Code
The Model Code restricts directors dealings on their own account in the company’s shares at certain times and governs the approval process as well as the manner and timing of disclosure of such dealings at all other times. Through the Model Code, shareholder-directors are demonstrating to all other shareholders that they will not abuse their position for unfair advantage.
Class tests under the Listing Rules
Under the Listing Rules, prior shareholder approval or notice is required for Premium listed companies to enter into a transaction outside its ordinary course of business and with certain ‘related parties’. The class tests are used to decide these circumstances.
Pre-emption rights give existing shareholders in a company the right to subscribe for their pro rata share of any new shares in that company issued for cash. By subscribing to the pre-emption right regime, companies are providing investors with protection against inappropriate dilution of their investments.
Passporting in to the Main Market
The concept of a ‘passport’ for issuers was introduced in the UK in 2005, under the Prospectus Directive. In a step towards a single European market in the financial services, this enables companies to raise capital across the European Economic Area on the basis of a single prospectus.
Under the Directive, ‘passporting’ involves a prospectus approved by the issuer's home competent authority in the EU being accepted by another EU member state as the basis of a public offer or admission of securities to a regulated market. In the UK the competent authority for listing is the UKLA, which is part of the FCA.
Passporting a prospectus for admission to trading on the Main Market involves a two-stage application process.
The competent authority in the issuer’s home country supplies the UKLA with a certificate of approval, a copy of the prospectus as approved, and (if applicable) a translation of the summary of the prospectus
The issuer applies to the Exchange for admission to trading. This involves submitting a completed Form 1 and an electronic copy of the relevant prospectus, as well as confirming the location of the company’s listing and the date it became effective. Companies are also subject to the Exchange’s Admission and Disclosure Standards.