On 6 April 2010 the Financial Services Authority (FSA) published Quarterly Consultation No. 24 (CP 10/10). Chapter 12 of CP 10/10 proposes the following changes to the Listing Rules (LRs) and the Disclosure and Transparency Rules (DTRs) to clarify their application:

  • Pre-emption rights - References to ‘equity shares’ in LR 9.3.11R and LR 9.3.12R will be replaced with references to ‘equity securities’. This amendment is proposed to ensure that overseas issuers are not able to dilute shareholdings by issuing convertible shares which would fall outside the pre-emption requirements of the Listing Rules if the term ‘equity shares’ was retained.
  • Corporate Governance statements - Guidance is to be added after DTR 1B.1.5R to draw issuers’ attention to the extension to certain listed overseas issuers of the requirement for companies whose securities are traded on a regulated market to produce a corporate governance statement.
  • Scope of LRs - LR 1.6.1G concerning listing categories is to be changed from guidance into a rule in order to clarify the FSA’s position about which requirements it expects issuers with securities listed in certain categories to comply with.
  • Authorised share capital - LR 13.8.3R is to be deleted. This requires a circular when a company proposes to increase its authorised share capital. As the concept of authorised share capital has not been retained by the Companies Act 2006, the rule is redundant for UK incorporated companies.
  • Reduction of capital - LR 13.8.4R is to be amended to introduce a carve-out for a reduction of capital in connection with a redenomination of share capital pursuant to section 626 Companies Act 2006.

Responses to CP 10/10 should be received by the FSA by 6 June 2010.

(FSA, Consultation Paper 10/10: Quarterly Consultation No. 24, 06.04.10)