The FCA has made significant changes to its technical notes. In addition to making clarificatory amendments to a number of notes (including deleting an obsolete note) it has also adopted six new technical notes. The new notes are:
- Cancellation of listing or transfer between listing categories – requests to waive the 20 business day notice period (UKLA/TN/210.1). This note clarifies the FCA’s approach to a request to reduce the notice period, required to elapse in certain circumstances, when an issuer is seeking cancellation of listing or transfer between listing categories;
- Share buybacks – novel/complex approaches and Premium Listing Principle 5 (UKLA/TN/310.1). This note addresses some of the questions posed to the FCA following an “ever increasing variety of approaches” by companies trying to structure a return to shareholders in the most beneficial manner;
- Discounted share issues and standard of disclosure in circulars (UKLA/TN/311.1). The FCA notes that it has seen instances where draft documents have been presented where there is little, if any, disclosure to shareholders on discounted non-pre-emptive fundraisings, other than the text of the shareholder resolution itself. While the FCA notes it seeks to remedy this deficiency in its vetting process it hopes the note will enable the issue to be dealt with more efficiently at an earlier stage in the process;
- Related party transactions by closed-ended investment funds – amendment of an existing investment management agreement to cover new money (UKLA/TN/404.1). This note is intended to improve the awareness of issuers and sponsors, of the FCA’s approach to revisions of an existing investment management agreement under the related party transactions rule;
- Disclosure of “lock-up” agreements (UKLA/TN/522.1). The FCA has clarified that it considers terms of a lock-up agreement which allows for its modification, waiver or cancellation during the lock-up period, to be relevant information within the scope of DTR 1.3.4R and LR 1.3.3R. Similarly, it notes that the Prospectus Rules contain explicit disclosure requirements in relation to lock-up agreements (item 7.3 of Annex 3 in Appendix 3 of the Prospectus Rules) including disclosure of the “content and exceptions of the agreement’” and an “indication of the period of the lock up”; and
- Pro forma financial information (UKLA/TN/633.1). The note addresses a number of issues that ESMA’s revised Q&A on pro forma financial information in prospectuses might pose to market participants in the UK.
For details of the main revisions to existing technical notes, click here. The FCA is also considering further changes to additional notes along with the adoption of a number of new notes (FCA Primary Market Bulletin No.11).
Impact - The technical and procedural notes published in the UKLA Knowledge Base constitute formal FCA guidance.