On 26 February 2010, the Financial Services Authority (FSA) published a Policy Statement reporting on the main issues arising from CP09/24 (Listing Regime Review: Policy Statement for CP08/21 and further minor consultation) published in October 2009 and CP09/28 (the Listing Regime review: Consultation on changes to the listing categories consequent to CP09/24) published in November 2009. The Policy Statement also publishes the final changes to the Listing Rules set out in Listing Rules Sourcebook (Amendment No. 4) Instrument 2010 (FSA 2010/7).
CP09/24 sets out amendments to the Listing Rules to implement the main changes to the Listing Regime that the FSA had previously proposed. These amendments include restructuring the Listing Regime into two listing segments, Premium and Standard, and further sub-dividing these segments into listing categories. The corporate governance standards for overseas companies are being strengthened and the Standard Listing segment will be available to UK companies. CP09/24 also sought feedback on the draft rules extending the requirement to offer pre-emption rights to overseas issuers of Premium Listed equity shares and clarifying the market practice and expectation that, to be admitted to the Official List, equity shares must be admitted to trading on a regulated market in the UK.
The main points covered by the Policy Statement are as follows:
- All companies with a Premium Listing, including overseas companies, will have to offer their shareholders pre-emption rights when they issue equity shares for cash or sell treasury shares, unless an exemption applies. However, in order to give overseas companies with a Premium Listing on 6 April 2010 the opportunity to seek shareholder authority to disapply pre-emption rights, those existing overseas companies with a Premium Listing on 6 April 2010 will not have to comply with the pre-emption requirements in LR 9.3.11 until after 5 April 2011. New overseas companies applying for a Premium Listing from 6 April 2010 will, however, if the law of their country of incorporation does not confer equivalent rights to pre-emption rights, need to ensure that their constitution provides for rights equivalent to pre-emption rights and be satisfied that conferring such rights would not be incompatible with the law of the country of their incorporation, prior to admission.
- The Listing Rules are being amended to clarify that, to be admitted to the Official List, equity securities have to be admitted to trading on a regulated market in the UK.
- A transitional provision has been included in relation to the new requirement from 6 April 2010 for all companies, whether UK or overseas, with a listing of shares or global depositary receipts (GDRs) to comply with DTR 7.2, so that existing overseas companies with a Premium Listing or a Standard Listing of shares or GDRs will only have to comply with this requirement in financial years beginning after 31 December 2009.
- Only equity shares that meet all the super-equivalent requirements will be able to have a Premium Listing from 6 April 2010. However, a transitional period is being introduced for securities that have a primary listing before the rules change on 6 April 2010 but which do not confer full voting rights and so will not qualify for a Premium Listing on 6 April 2010. They will move to a Standard Listing but will be able to retain their Premium Listing until 31 May 2012.