MAR 5-A Multilateral trading facilities operating as a primary MTF

Subject to MAR 5-A.1.2R, this chapter applies to an MTF operating as a primary MTF that does not meet the qualified investor condition.

In addition: 

(1) MAR 5-A.3 (Withdrawal rights);

(2) MAR 5-A.4 (Persons responsible for an MTF admission prospectus or supplementary prospectus); and

(3) MAR 5-A.5 (Advertisements and other disclosure of information),

apply to the persons identified in the application provisions of those sections.

The application provision in MAR 5-A.1.1R includes a primary MTF operated by a UK RIE.

GEN does not apply in respect of the rules and guidance in MAR 5-A, except as provided for in MAR 5-A.1.5R and MAR 5-A.1.6R.

The rules and guidance in GEN 1.3, GEN 2.1 , GEN 2.2.1R to GEN 2.2.16G and GEN 2.2.18R to GEN 2.2.25G apply to the following: 

(1) persons carrying out the designated activities in regulation 9 and regulation 11 of the Public Offers and Admissions to Trading Regulations; and

(2) persons responsible for the content of an MTF admission prospectus in accordance with the rules and guidance in MAR 5-A.4,

as they apply to authorised persons, insofar as they do not already apply.

The persons identified in MAR 5-A.1.5R(1) and (2) must deal with the FCA in an open and cooperative way.

The purpose of this chapter is to provide for the rules in respect of the designated activities referred to in regulations 9 and 11 of the Public Offers and Admissions to Trading Regulations, in respect of:

(1) the rules that an operator of a primary MTF must include in its rulebook, covering the circumstances in which:

     (a) an MTF admission prospectus is required;

     (b) a supplementary prospectus is required; and

     (c) withdrawal rights are required to be notified.

[Note: section 71K of the Act and regulations 9, 11, 15, 21 and 32 of the Public Offers and Admissions to Trading Regulations]

(2) the rules that apply directly to relevant persons identified in this chapter in respect of:

     (a) responsibility for an MTF admission prospectus;

     (b) the availability and exercise of withdrawal rights; and

     (c) communication of an advertisement.

[Note: section 71K of the Act and regulations 9, 11, 13, 15, 21, 22 and 32 of the Public Offers and Admissions to Trading Regulations]

A reader of this chapter should also consider the rules in PRM 8 (Protected forward-looking statements) as those rules also apply to an MTF admission prospectus.

Subject to MAR 5-A.2.4R, the operator of a primary MTF must include a rule in its rulebook that: 

(1) is applicable to an issuer of transferable securities to be admitted to trading on the primary MTF; and

(2) the issuer of transferable securities to be admitted to trading on the primary MTF must prepare an MTF admission prospectus if the transferable securities to be admitted to trading are not fungible with securities that are already admitted to trading on the primary MTF.

Subject to MAR 5-A.2.4, the requirement under MAR 5-A.2.1R would apply to an issuer of transferable securities to be admitted to trading on the primary MTF where the issuer is an enlarged entity resulting from an acquisition that resulted in: 

(1) a fundamental change in the business or in a change in majority of the board; or 

(2) voting control of a company that had transferable securities admitted to trading on the same primary MTF,

where the acquisition led to the cancellation of the company's admission to trading.

For the purpose of MAR 5-A.2.2G, the FCA considers that the following factors are indicators of a fundamental change:

(1) the extent to which the transaction will change the strategic direction or nature of the company's business;

(2) whether its business will be part of a different industry sector following the completion of the transaction; or

(3) whether its business will deal with fundamentally different suppliers and end users.

The requirement in MAR 5-A.2.1R(1) does not apply where: 

(1) the issuer already has transferable securities of the same class admitted to trading on a specified market that the primary MTF operator considers appropriate;               

(2) an issuer who already has transferable securities admitted to trading is seeking to admit to trading on the same primary MTF a new class of transferable securities; or

(3) the following conditions are met: 

     (a) a company has transferable securities admission to trading on a primary MTF;

     (b) the issuer applying for admission to trading is a new holding company or parent undertaking of the company in MAR 5-A.2.4R(3)(a);

     (c) there is no business combination in connection with the issuer becoming the new holding company or parent undertaking of the company;

     (d) the issuer is applying for admission to trading on the same primary MTF as the primary MTF in MAR 5-A.2.4R(3)(a); and

     (e) the business of the company in MAR 5-A.2.4R(3)(a) remains the same.

An operator of a primary MTF may specify circumstances in addition to those identified in MAR 5-A.2.1R regarding when an MTF admission prospectus is required.

[Note: regulations 15, 16 and 21(3) of the Public Offers and Admissions to Trading Regulations]

An operator of a primary MTF is responsible for specifying the content requirements of an MTF admission prospectus.

[Note: regulation 15(4)(a) of the Public Offers and Admissions to Trading Regulations]

The operator of a primary MTF must include a rule in its rulebook applicable to the issuer, requiring the publication of a supplementary prospectus in the event that there is a significant new factor, material mistake or material inaccuracy relating to the information included in an MTF admission prospectus which:

  (1) may affect the assessment of the transferable securities; and

  (2) arises or is noted in the relevant period identified in MAR 5-A.2.8R.

The relevant period during which a significant new factor, material mistake or material inaccuracy may trigger the requirement in MAR 5-A.2.7R is the period between the time when theMTF admission prospectus is approved and whichever is the later of:

(1) the closing of the offer period for the non-excluded transferable securities offered by the issuer, the intermediary or underwriter appointed by the issuer; and

(2) the time when trading of the non-excluded transferable securities on the primary MTF begins.

An operator of a primary MTF may specify circumstances in addition to those identified in MAR 5-A.2.7R read together with MAR 5-A.2.8R, regarding when a supplementary prospectus is required.

[Note: regulations 15(2)(a)(ii) and 21(4)(b) of the Public Offers and Admissions to Trading Regulations]

An operator of a primary MTF is responsible for specifying the content requirements of a supplementary prospectus.

[Note: regulation 15(4)(a) of the Public Offers and Admissions to Trading Regulations]

The rules in this section apply in respect of any offer that is the subject of an MTF admission prospectus.

(1) Subject to MAR 5-A.3.3R, in the case where a supplementary prospectus is published: 

     (a) as required by the operator of a primary MTF under MAR 5-A.2.7R; and

     (b) in relation to an offer that is the subject of an MTF admission prospectus, 

any person who has already agreed to buy or subscribe for non-excluded transferable securities, that are the subject of an MTF admission prospectus before the supplementary prospectus is published may withdraw their acceptance according to (2). 

(2) A withdrawal of acceptance under (1): 

     (a) must be exercised within 2 working days after publication of a supplementary prospectus, the publication of which is required by an operator of a primary MTF under MAR 5-A.2.7R, unless:

         (i) the issuer; 

         (ii) the intermediary through whom the transferable securities were bought or subscribed for; or 

         (iii) the underwriter appointed by the issuer, 

      allows an extension of the withdrawal period; and 

      (b) is available provided the circumstances which required the publication of a supplementary prospectus under MAR 5-A.2.7R arose or were noted before the closing of the offer period, or the delivery of the transferable securities that are the subject of an MTF admission prospectus, whichever occurs earlier.

[Note: regulations 15(3)(b) and 32(1) of the Public Offers and Admissions to Trading Regulations]

The requirement in MAR 5-A.3.2R does not apply to offers made by issuers to their underwriters.

The operator of a primary MTF must include a rule in its rulebook that requires notification of the withdrawal rights specified in MAR 5-A.3.2R.

A rule required under MAR 5-A.3.4R must apply where non-excluded transferable securities for admission to trading on a primary MTF are bought or subscribed for by an investor from the issuer or an underwriter appointed by the issuer. The rule must require the issuer to ensure, or in the case where an underwriter is appointed by the issuer, take reasonable steps to ensure that the investor is informed: 

(1) that a supplementary prospectus may be published if a significant new factor, material mistake or material inaccuracy arises;

(2) where the supplementary prospectus will be published; and

(3) that the investor may in such circumstances withdraw their acceptance for the non-excluded transferable securities in question.

[Note: regulations 15(3)(b), 32(1) and 32(5)(b) of the Public Offers and Admissions to Trading Regulations]

The rules in this section should be read by those persons who have been involved in the preparation of an MTF admission prospectus or supplementary prospectus required by the rules of a primary MTF. This section explains who is responsible for an MTF admission prospectus and a supplementary prospectus.

References to an MTF admission prospectus in this section include a supplementary prospectus.

A person who is responsible for an MTF admission prospectus will be liable for the content of that document and for compensation that may arise under regulation 30 of the Public Offers and Admissions to Trading Regulations.

[Note: regulation 30 of the Public Offers and Admissions to Trading Regulations]

(1) This rule applies to an MTF admission prospectus relating to:

     (a) equity shares;

     (b) warrants or options to subscribe for equity shares that are issued by the issuer of the equity shares; and

     (c) other transferable securities that have similar characteristics to transferable securities referred to in paragraphs (a) or (b).

(2) Each of the following persons are responsible for the MTF admission prospectus:

     (a) the issuer of the transferable securities;

     (b) if the issuer is a body corporate:

          (i) each person who is a director of that body corporate when the MTF admission prospectus is published;

          (ii) each person who has authorised themselves to be named, and is named, in the MTF admission prospectus as a director or as having agreed to become a director of thatbody corporate either immediately or at a future time; and

          (iii) each person who is a senior executive of any external management company of the issuer;

      (c) the person requesting admission, if this is not the issuer;

      (d) if the person requesting admission is a body corporate and is not the issuer, each person who is a director of the body corporate when the MTF admission prospectus is published; 

      (e) each person who accepts, and is stated in the MTF admission prospectus as accepting, responsibility for the MTF admission prospectus; and

      (f) each person not falling within any of the previous paragraphs who has authorised the contents of the MTF admission prospectus.

[Note: regulations 15(3)(a) and 22 of the Public Offers and Admissions to Trading Regulations]

For the purposes of MAR 5-A.4.4R(2)(b)(iii), in relation to an external management company, in considering whether the functions the person performs would ordinarily be performed by officers of the issuer, the FCA will consider, among other things:

(1) the nature of the board of the issuer to which the person provides services, and whether the board has the capability to act itself on strategic matters in the absence of that person's services;

(2) whether the appointment relates to a one-off transaction or is a longer-term relationship; and

(3) the proportion of the functions ordinarily performed by officers of the issuer that is covered by the arrangement.

(1) This rule applies to an MTF admission prospectus relating to transferable securities other than those to which MAR 5-A.4.4R applies.

(2) Each of the following persons are responsible for the MTF admission prospectus:

     (a) the issuer of the transferable securities;

     (b) each person who accepts, and is stated in the MTF admission prospectus as accepting, responsibility for the MTF admission prospectus;

     (c) in relation to a request for an admission to trading, the person requesting admission, if this is not the issuer;

     (d) if there is a guarantor for the issue, the guarantor in relation to information in the MTF admission prospectus that relates to the guarantor and the guarantee; and

     (e) each person not falling within any of the previous paragraphs who has authorised the contents of the MTF admission prospectus.

[Note: regulations 15(3)(a) and 22 of the Public Offers and Admissions to Trading Regulations]

A person is not responsible for an MTF admission prospectus under MAR 5-A.4.4R(2)(b)(i) if it is published without their knowledge or consent and, on becoming aware of its publication they give reasonable public notice that it was published without their knowledge or consent as soon as practicable.

A person who accepts responsibility for an MTF admission prospectus under MAR 5-A.4.4R(2)(e) or MAR 5-A.4.6R(2)(b), or authorises the contents of an MTF admission prospectus under MAR 5-A.4.4R(2)(f) or MAR 5-A.4.6R(2)(e), may state that they do so only in relation to specified parts of the MTF admission prospectus, or only in specified respects, and in that case the person is responsible under those paragraphs only:

(1) to the extent specified; and

(2) if the material in question is included in (or substantially in) the form and context to which the person has agreed.

Nothing in the rules in this section is to be construed as making a person responsible for any MTF admission prospectus by reason only of the person giving advice about its contents in a professional capacity.

This chapter applies to the communication of an advertisement that relates to the admission to trading or proposed admission to trading of transferable securities on a primary MTF that are the subject of an MTF admission prospectus.

All information disclosed in oral or written form, as an advertisement or otherwise disclosed, must be consistent with and: 

(1) not contradict information included in the MTF admission prospectus or in a supplementary prospectus, where already published; or

(2) not contradict information to be included in the MTF admission prospectus or in a supplementary prospectus, where the MTF admission prospectus or supplementary prospectus is to be published at a later date; and

(3) not refer to information which contradicts the information in the MTF admission prospectus or supplementary prospectus.

[Note: regulations 11 and 15(2)(b) of the Public Offers and Admissions to Trading Regulations]

In the event that material information is disclosed by or on behalf of an issuer or offeror, and addressed to one or more selected investors in oral or written form, that information must, in a case where:

(1) (a) the offer is conditional on the transferable securities being admitted to trading on a primary MTF; or

      (b) the transferable securities being offered are at the time of the offer already admitted to trading on a primary MTF; and

(2) there is an MTF admission prospectus,

be included in the MTF admission prospectus or supplementary prospectus.

[Note: regulation 13(2) of the Public Offers and Admissions to Trading Regulations]

An advertisement must comply with the requirements contained in (1) to (4): 

(1) an advertisement must state that, where applicable, an MTF admission prospectus has been or will be published and indicate where investors are or will be able to obtain it, noting the identification requirements in MAR 5-A.5.7R; 

(2) an advertisement must be clearly recognisable as such and identify itself as an advertisement;

(3) an advertisement must be accurate and not misleading; and 

(4) the information contained in an advertisement must be consistent with the information contained in the MTF admission prospectus, where already published, or required to be in theMTF admission prospectus, where the MTF admission prospectus is yet to be published.

Information disclosed in oral or written form concerning an admission to trading on a primary MTF, whether as an advertisement or otherwise disclosed, must not:

(1) present the information in the MTF admission prospectus in a materially unbalanced way, including by presenting negative aspects of such information with less prominence than the positive aspects or by omitting or selectively presenting certain information; or

(2) contain alternative performance measures unless they are contained in the MTF admission prospectus.

For the purpose of MAR 5-A.5.5R(2), ‘alternative performance measures’ means financial measures of historical or future financial performance, financial position or cash flows, other than financial measures defined in the applicable financial reporting framework.

An advertisement must clearly identify the relevant MTF admission prospectus by:

(1) identifying the website on which the MTF admission prospectus is published, or will be published, where the advertisement is disseminated in written form and by means other than electronic means;

(2) including a hyperlink to the MTF admission prospectus and any relevant component parts where the advertisement is disseminated in written form by electronic means, or by including a hyperlink to         the page of the website where the MTF admission prospectus will be published if the MTF admission prospectus has not yet been published; and

(3) including accurate information about where the MTF admission prospectus may be obtained, and accurate information about the admission to trading of transferable securities on a primary MTF to      which it relates, where the advertisement is disseminated in a form or by means not falling within the scope of (1) or (2).

Advertisements disseminated to potential retail investors must include the following:

(1) the word ‘advertisement’, in a prominent manner. Where an advertisement is disseminated in an oral form, the purpose of the communication must be clearly identified at the beginning of the message;

(2) a recommendation that potential investors read the MTF admission prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in the transferable securities; and

(3) the comprehension alert at MAR 5-A.5.9R where the advertisement relates to complex securities other than the financial instruments referred to in COBS 10A.4.1R(2)(a),(b) and (d).

The comprehension alert required by MAR 5-A.5.8R(3)is: ‘You are about to purchase a product that is not simple and may be difficult to understand.’

Advertisements in written form, which are disseminated to potential retail investors, must be sufficiently different in format and length from the MTF admission prospectus that no confusion with the MTF admission prospectus is possible.

Subject to MAR 5-A.5.13R, advertisements disseminated to potential investors must be amended where:

(1) a supplementary prospectus is subsequently published in accordance with MAR 5-A.5.7R; and

(2) the significant new factor, material mistake or material inaccuracy mentioned in the supplementary prospectus renders the previously disseminated advertisement materially inaccurate or misleading.

With the exception of orally disseminated advertisements, advertisements amended pursuant to MAR 5-A.5.11R must be disseminated through, at a minimum, the same method as the previous advertisement.

MAR 5-A.5.11R does not apply after the time when trading on a primary MTF begins.

Advertisements amended pursuant to MAR 5-A.5.11R must be disseminated to potential investors without undue delay following the publication of the supplementary prospectus and must contain all of the following:

(1) a clear reference to the inaccurate or misleading version of the advertisement;

(2) an explanation that the advertisement has been amended as it contained materially inaccurate or misleading information; and

(3) a clear description of the differences between the 2 versions of the advertisement.