Leveraging Venture Capital for Mid-Market Growth

One of the essential changes made to the program was to collapse the previous premium and basic listing sectors of the regulated market into a flagship single listing classification for Equity Shares in Commercial Business (ESCC), described as the "commercial company" category. Whilst the intention was to introduce lighter-touch regulation for the business company classification (compared with the previous premium listing section) the brand-new rules still represented an action up from the previous basic listing requirements.

The shift category is closed to new applicants and to transfers from other categories. The FCA has not yet set a particular end date for the shift category, but this will be kept under evaluation. The essential provisions of the UKLR sourcebook for commercial companies are set out in the table listed below: Key contents of the UKLR sourcebook for business companiesUKLR 1Preliminary: all securitiesThe FCA can ignore certain UKLR requirements as it considers appropriate.

ANSR July UK PRs

UKLR 2Listing PrinciplesThe Listing Concepts need companies to, to name a few, develop and maintain sufficient procedures, systems and controls to allow them to abide by their obligations under the UKLR (Listing Concept 1) and deal with the FCA in an open and co-operative way (Listing Concept 2). UKLR 3Requirements for listing: all securitiesShares must be easily transferable, fully paid and totally free from all constraints on the right to transfer.

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

A company needs to adopt a constitution permitting it to comply with the UKLR. UKLR 6Equity shares (business business): continuing obligationsCommercial business are subject to continuing responsibilities, including: annual reporting requirements (consisting of compliance with the UK Corporate Governance Code, or an explanation in the occasion of non-compliance); compliance with climate and variety disclosure requirements; and market announcement requirements.

The considerable transaction announcement must include defined information, consisting of: the benefits and threats of the deal; a declaration on the impact of the deal on the group's earnings, assets and liabilities; details of any break charge; a "benefits" declaration by the board; and any other appropriate information necessary to support investor engagement and market openness.

UKLR 9Equity shares (business business): more issuances, dealing in own securities and treasury sharesPre-emption rights apply to the business's noted shares. UKLR 21Suspending, cancelling, restoring listing and transfer in between listing classifications: all securitiesThe FCA might suspend the listing of a company's securities if the smooth operation of the market is, or might be, momentarily jeopardised or it is necessary to secure investors.

Professional Review of Mid-Market Global Markets

In addition to the new industrial business category, the FCA also produced new classifications for international secondary listings (UKLR 14) and shell companies (UKLR 13). For shell business and SPACs, in the UKLR, the FCA mainly kept the guidelines that had used to the previous standard listing sector, with improved eligibility requirements setting time frame within which initial transactions need to be finished by SPACs.

ANSR July UK PRs

In addition, the FCA reverted to a guidance-based method permitting larger SPACs to willingly put in place adequate financier defenses to prevent an anticipation of suspension of listing as and when a preliminary deal is announced. Ahead of publication of the UKLR and to offer result to the suggestions coming out of Lord Hill's evaluation, the FCA implemented specific changes to eligibility criteria set out in the then Listing Rules with effect from the end of December 2021, significantly to minimize the complimentary float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization limit for premium and standard listing sections from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made further modifications to eligibility criteria consisting of the adoption of a single set of Listing Principles (to reflect the collapse of the previous premium and basic listing sections into a single commercial business category) and removed the previous premium listing requirements for a three-year income performance history and "tidy" working capital statement.