PRM 1 Introduction, application and prospectus requirement

Regulation 12 of the Public Offers and Admissions to Trading Regulations makes it unlawful for relevant securities to be offered to the public in the UK unless the offer is of a specified kind, or a general exception applies. Contravention of regulation 12 is a criminal offence by virtue of section 85 of the Act. 

Part 1 of Schedule 1 to the Public Offers and Admissions to Trading Regulations exempts offers of a specified kind from the prohibition referred to in PRM 1.1.1UK. Paragraph 6 of Schedule 1 to the Public Offers and Admissions to Trading Regulations exempts offers where there is an offer of non-excluded transferable securities that is:

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

(2) made at a time when the transferable securities are already admitted to trading on a regulated market or primary MTF.

The purpose of this sourcebook is to provide the FCA's rules and guidance on the requirement for a prospectus in connection with the admission to trading of transferable securities, including:

(1) when a prospectus is required;

(2) what a prospectus must contain;

(3) rules regarding protected forward-looking statements;

(4) procedural details, including the preparation, filing and approval and publication of a prospectus;

(5) when a supplementary prospectus is required and details regarding withdrawal rights; and

(6) rules regarding the communication of advertisements and equality of information.

In addition to the guidance available throughout this sourcebook, the FCA has issued non-handbook guidance on topics covered by PRM, available in the FCA's Knowledge Base on the FCA's website.

An issuer, offeror or person requesting admission to trading should also consider whether the requirements in DISC apply.

FCA rules relating to admission to trading of transferable securities on a primary MTF are set out in MAR 5-A, except that rules covering protected forward-looking statements, applicable to forward-looking statements in both a prospectus and an MTF admission prospectus, can be found in PRM 8.

(1) Unless otherwise specified, the rules and guidance in this sourcebook apply to the designated activities specified in the Public Offers and Admissions to Trading Regulations as follows:

    (a) regulation 9 (Designated activities: public offers of relevant securities); and

    (b) regulation 10 (Designated activities: admissions to trading on regulated market).

(2)PRM 8 (Protected forward-looking statements) also applies to the designated activities specified in regulation 11 (Designated activities: admissions to trading on primary MTF) of thePublic Offers and Admissions to Trading Regulations, noting the application provision in MAR 5-A.1.8G.

The persons who are carrying out the designated activities specified in PRM 1.2.1R must comply with the rules in PRM, including (unless otherwise specified in a particular chapter or section):

(1) the issuer of transferable securities; 

(2) the person requesting admission to trading (if this is a person other than the issuer); and

(3) persons responsible for the preparation, or confirmation, of the content of a prospectus.

PRM 3 (Persons responsible for a prospectus or supplementary prospectus) contains the rules specifying which persons are responsible for the content of a prospectus.

GEN does not apply in respect of the rules and guidance in PRM, except as provided for in PRM 1.2.5R and PRM 1.2.6R.

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 public offers and admissions to trading regulations activities referred to in PRM 1.2.1R; and

(2) persons responsible for the content of a prospectus in accordance with the rules and guidance in PRM 3 , 

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

The persons identified in PRM 1.2.5R(1)and(2) must deal with the FCA in an open and cooperative way.

The following types of transferable securities are exempt from the rules in PRM and therefore an admission to trading on a regulated market of the transferable securities listed below will not be subject to the requirement for a prospectus in PRM 1.4:

(1) units issued by a collective investment undertaking other than the closed-end type;

(2) non-equity securities:

     (a) issued by any of the following:

          (i) the government of any country or territory;

          (ii) a local or regional authority of any country or territory;

          (iii) a public international body; or

          (iv) the European Central Bank or the central bank of any State; or

      (b) that are instruments of Islamic finance issued by a special purpose vehicle established by the government of any country or territory or by the European Central Bank or the central bank of any State where the non-equity securities are backed by the relevant government or central bank in such a way that the economic effect is the same as though the relevant government or central bank were the issuer of the non-equity securities;

(3) transferable securities unconditionally and irrevocably guaranteed by the government or a local or regional authority of any country or territory;

(4) non-equity securities that are instruments of Islamic finance over which a credit support arrangement exists, supported by the government of any country or territory, that is equivalent in its economic effect to the guarantee referred to in (3); or 

(5) money-market instruments.

For the purposes of PRM 1.3.1R(1): 

(1) ‘units issued by a collective investment undertaking’ has the meaning in regulation 6(2)(b) of the Public Offers and Admissions to Trading Regulations – namely, securities issued by a collective investment undertaking as representing the rights of the participants in such an undertaking over its assets; and

(2) ‘collective investment undertaking other than the closed-end type’ has the meaning in regulation 6(2)(a) of the Public Offers and Admissions to Trading Regulations – namely, unit trusts and investment companies with both of the following characteristics:

      (a) they raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; and 

      (b) their units are, at the holder’s request, purchased or redeemed, directly or indirectly, out of their assets.

Unless an exemption applies, transferable securities other than those specified in PRM 1.3.1R can only be admitted to trading after prior publication of a prospectus, approved by the FCA, in accordance with the rules in PRM.

An admission to trading described in PRM 1.4.3R to PRM 1.4.13R is exempt from the rule at PRM 1.4.1R.

(1) Equity securities fungible with equity securities already admitted to trading on the same regulated market are exempt from PRM 1.4.1R, provided they represent, over a 12-month period, less than 100% of the number of those equity securities already admitted to trading on the same regulated market where the equity securities are issued by a closed-ended investment fund.

(2) Non-equity securities fungible with non-equity securities already admitted to trading on the same regulated market are exempt from PRM 1.4.1R, provided they represent, over a 12-month period, less than 75% of the number of those non-equity securities already admitted to trading on the same regulated market where the non-equity securities are issued by a closed-ended investment fund.

(3) Transferable securities fungible with transferable securities already admitted to trading on the same regulated market are exempt from PRM 1.4.1R, provided they represent, over a 12-month period, less than 75% of the number of those transferable securities already admitted to trading on the same regulated market where the transferable securities are issued by an issuer other than a closed-ended investment fund.

An admission to trading of C shares that are not fungible with any other C shares already admitted to trading is exempt from PRM 1.4.1R, provided that the closed-ended investment fund issuing the C shares notifies the following information to a RIS in advance of, but not later than the time the C Shares are admitted to trading:

(1) the name and legal entity identifier (LEI) of the issuer;

(2) the regulated market on which the C shares are being admitted to trading;

(3) the name and International Securities Identification Number (ISIN) of the C shares being admitted to trading; 

(4) the number of C shares being admitted to trading; 

(5) the date the C shares are being admitted to trading; 

(6) confirmation that the closed-ended investment fund is relying on this exemption from the requirement for a prospectus; and

(7) a description of the rights attached to the C shares, any limitations of those rights and any procedures for the exercise of those rights, including: 

     (a) dividend rights, including:

          (i) fixed date(s) on which entitlement arises;

          (ii) time limit after which entitlement to dividend lapses and an indication of the person in whose favour the lapse operates;

          (iii) dividend restrictions and procedures for non-resident holders; and

          (iv) rate of dividend or method of its calculation, periodicity and cumulative or non-cumulative nature of payments;

      (b) voting rights; 

      (c) pre-emption rights in offers for subscription of C shares of the same class; 

      (d) right to share in the profits of the issuer; 

      (e) rights to share in any surplus in the event of liquidation; 

      (f) redemption provisions; and 

      (g) conversion provisions relating to the conversion of the C shares into shares fungible with shares already admitted to trading on the same regulated market. 

(1) Shares resulting from the conversion or exchange of other transferable securities or from the exercise of the rights conferred by other transferable securities are exempt from PRM 1.4.1R, where the resulting shares are fungible with the shares already admitted to trading on the same regulated market, subject to the condition at (2).

(2) The shares in (1) must represent, over a 12-month period, less than 100% of the number of those shares already admitted to trading on the same regulated market where the shares are issued by a closed-ended investment fund, or less than 75% of the number of those shares already admitted to trading on the same regulated market where the shares are issued by an issuer other than a closed-ended investment fund, unless:

      (a) a prospectus was drawn up in accordance with any of (i) to (iv) below, as applicable, upon the admission to trading on a regulated market of the transferable securities giving access to the shares:

          (i) the rules in PRM;

          (ii) the Prospectus Regulation; 

          (iii) the EU Prospectus Regulation; or

          (iv) the Prospectus Directive; 

      (b) the transferable securities giving access to the shares were issued before 20 July 2017;

      (c) where the shares qualify as common equity tier 1 instruments of an institution and result from the conversion of additional tier 1 instruments issued; or

      (d) the shares qualify as eligible own funds or eligible basic own funds as defined in the UK law which implemented Section 3 of Chapter VI of Title I of Directive 2009/138/EC of the European Parliament and of the Council, and result from the conversion of other securities which was triggered for the purposes of fulfilling the obligations to comply with the UK law which implemented the Solvency Capital Requirement or Minimum Capital Requirement as laid down in Sections 4 and 5 of Chapter VI of Title I of Directive 2009/138/EC or the UK law which implemented the group solvency requirement as laid down in Title III of Directive 2009/138/EC.

When calculating the number of equity securities issued by a closed-ended investment fund for the purposes of PRM 1.4.3R(1), shares fungible with shares already admitted to trading on the same regulated market arising from the conversion of C shares must be taken into account.  

Transferable securities resulting from the conversion or exchange, directly or indirectly, of other securities, own funds or other liabilities under the special resolution provisions of: 

(1) Part 1 of the Banking Act 2009 (special resolution regime); or

(2) Schedule 11 to the Financial Services and Markets Act 2023 (central counterparties),

are exempt from PRM 1.4.1R.

Shares issued in substitution for shares of the same class already admitted to trading on the same regulated market are exempt from PRM 1.4.1R, if issuing the new shares does not involve any increase in the issued share capital.

Equity securities issued in connection with a takeover are exempt from PRM 1.4.1R provided that:

(1) a document is made available to the public in accordance with the arrangements set out in PRM 9.5 (Publication of the prospectus) containing information describing the transaction and its impact on the issuer; and 

(2) (a) the FCA has issued a prior approval of the document referred to in (1); or 

      (b) (i) the equity securities to be admitted to trading are fungible with existing equity securities already admitted to trading prior to the takeover and its related transaction; and 

           (ii) the takeover is not considered to be a reverse acquisition transaction within the meaning of paragraph B19 of International Financial Reporting Standard (IFRS) 3, Business Combinations, as contained in UK-adopted IFRS.

Equity securities offered, allotted or to be allotted in connection with a merger or a division are exempt from PRM 1.4.1R provided that: 

(1) a document is made available to the public in accordance with the arrangements set out in PRM 9.5(Publication of the prospectus), containing information describing the transaction and its impact on the issuer; and 

(2) the transaction is not considered to be a reverse acquisition transaction within the meaning of paragraph B19 of International Financial Reporting Standard (IFRS) 3, Business Combinations, as contained in UK-adopted IFRS, and only in the following cases:

      (a) the equity securities of the acquiring entity have already been admitted to trading prior to the transaction; or

      (b) the equity securities of the entities subject to the division have already been admitted to trading prior to the transaction.

Shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which such dividends are paid, are exempt from PRM 1.4.1R, provided that the said shares are of the same class as the shares already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer or allotment.

Transferable securities offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking are exempt from PRM 1.4.1R, provided that the said transferable securities are of the same class as the transferable securities already admitted to trading on the same regulated market and that a document is made available containing information on the number and nature of the transferable securities and the reasons for and detail of the offer or allotment.

(1) Transferable securities already admitted to trading on another regulated market are exempt from PRM 1.4.1R, provided both (a) and (b), or (c) apply and the conditions at (2) and (3) are satisfied:

      (a) the transferable securities, or transferable securities of the same class, have been admitted to trading on the other regulated market for more than 18 months; and

      (b) for transferable securities first admitted to trading after 1 July 2005, the admission to trading was subject to a prospectus approved and published in accordance with:

           (i) the rules in PRM;

           (ii) the Prospectus Regulation;

           (iii) the EU Prospectus Regulation; or

           (iv) the Prospectus Directive; or

       (c) for transferable securities first admitted to listing after 30 June 1983, listing particulars were approved in accordance with the requirements of:

           (i) Council Directive 80/390/EEC coordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing; or

           (ii) the Consolidated Admissions and Reporting Directive.

(2) The ongoing obligations for trading on the other regulated market have been fulfilled.

(3) The person seeking the admission to trading on a regulated market of a transferable security under this exemption makes available to the public a summary in accordance with PRM 9.5 (Publication of the prospectus) and PRM 2.5 (Prospectus summary) and: 

      (a) the maximum length set out in PRM App 1 Annex 2.2R is extended by 2 additional sides of A4-sized paper, drawn up in English; and

      (b) the summary states where the most recent prospectus (or other disclosure document referred to in PRM 1.4.13R(1)(b), where relevant) can be obtained and where the financial information published by the issuer pursuant to ongoing disclosure obligations is available.

The exemptions referred to at PRM 1.4.3R to PRM 1.4.13R may be combined, except for those listed at PRM 1.4.3R and PRM 1.4.5R, where such combination could lead to the immediate or deferred admission to trading of shares over a 12-month period of more than:

(1) 100% of the number of shares of the same class already admitted to trading on the same regulated market where the shares are issued by a closed-ended investment fund; or 

(2) 75% of the number of shares of the same class already admitted to trading on the same regulated market where the shares are issued by an issuer other than a closed-ended investment fund,

without a prospectus being published.

Where the admission to trading is exempted from the obligation to publish a prospectus in accordance with any of the exemptions set out in PRM 1.4.3R to PRM 1.4.13R, an issuer, or any other person requesting an admission to trading, may voluntarily draw up a prospectus in accordance with this sourcebook.

(1) A voluntary prospectus drawn up pursuant to PRM 1.4.15 will be subject to all the provisions under this sourcebook; and

(2) a voluntary prospectus approved by the FCA will entail all the rights and obligations provided for a prospectus under this sourcebook. 

[Note: regulation 21(1)(b) of the Public Offers and Admissions to Trading Regulations]

This section applies to an issuer who is applying for admission to trading of transferable securities that are not fungible with any other transferable securities already admitted to trading, except where the transferable securities are transferable securities to which PRM 1.4.4R applies.

An issuer must notify a RIS of the admission to trading of transferable securities, and ensure the dissemination of this information in such a manner that it is capable of being disseminated to as wide a public as possible, and as close to simultaneously as possible, in the United Kingdom, on the same business day that the admission to trading occurs.

The issuer must also ensure that the RIS, at the same time, files the notification in PRM 1.5.2R with the FCA using the FCA-specified application programme interface (API) and standardised schema referred to in DTR 8.4.30R as if the notification were regulated information.

For the purposes of PRM 1.5.2AR, the headline information relevant to the notification is the headline information for ‘Admission to Trading’.

The notification referred to in PRM 1.5.2R must contain the following information: 

(1) the name and legal entity identifier (LEI) of the issuer;         

(2) the regulated market on which the transferable securities have been admitted to trading; 

(3) the name, type and International Securities Identification Number (ISIN) of the transferable securities admitted to trading; 

(4) the number of transferable securities admitted to trading; 

(5) the date the transferable securities were admitted to trading; and

(6) if a prospectus has been published in relation to the transferable securities admitted to trading: 

     (a) the date of the prospectus; 

     (b) if applicable, the date of any supplementary prospectus; and 

     (c) a hyperlink to where the prospectus and any supplementary prospectus is published.

This section applies to an issuer who is making a further issuance of transferable securities fungible with transferable securities already admitted to trading.  

An issuer must obtain the admission to trading of any further issuance of transferable securities which are fungible with transferable securities already admitted to trading:

(1) in the case of equity securities, except for the securities referred to in sub-paragraphs (3) and (4), with effect no later than 60 days from the transferable securities being allotted;

(2) in the case of non-equity securities, except for the securities referred to in sub-paragraph (4), with effect no later than 60 days from the transferable securities being issued;

(3) in the case of equity shares listed in the equity shares (international commercial companies secondary listing) category, with effect no later than 365 days from the transferable securities              being allotted; or

(4) in the case of depositary receipts issued over shares, with effect no later than 365 days from the transferable securities being issued. 

PRM 1.6.2R applies irrespective of:

(1) whether the further issue is made in accordance with an exemption in the Public Offers and Admissions to Trading Regulations;

(2) whether a prospectus is required for the admission to trading in accordance with PRM; or 

(3) when a prospectus is published.

An issuer must notify a RIS of any admission to trading, and ensure the dissemination of this information in such a manner that it is capable of being disseminated to as wide a public as possible, and as close to simultaneously as possible, in the United Kingdom, within 60 days of the admission to trading. 

The issuer must also ensure that the RIS, at the same time, files the notification in PRM 1.6.4R with the FCA using the FCA-specified application programme interface (API) and standardised schema referred to in DTR 8.4.30R as if the notification were regulated information.

For the purposes of PRM 1.6.4AR, the headline information relevant to the notification is the headline information for ‘Admission to Trading’.

The notification referred to in PRM 1.6.4R must contain the following information:

(1) the name and legal entity identifier (LEI) of the issuer; 

(2) the regulated market on which the transferable securities have been admitted to trading; 

(3) the name, type and International Securities Identification Number (ISIN) of the transferable securities admitted to trading; 

(4) the number of further transferable securities admitted to trading covered by the notification; 

(5) the total number of transferable securities admitted to trading, taking into account the further issuance; 

(6) confirmation that the further transferable securities admitted to trading are fungible with transferable securities already admitted to trading; and 

(7) either: 

     (a) the date on which the further transferable securities were admitted to trading; or

     (b) where there is more than one date when the further transferable securities were admitted to trading: 

          (i) the dates of admission to trading; or

          (ii) the date range covered by the notification; and 

(8) if a prospectus has been published in relation to the further transferable securities admitted to trading: 

     (a) the date of the prospectus; 

     (b) if applicable, the date of any supplementary prospectus; and 

     (c) a hyperlink to where the prospectus and any supplementary prospectus is published.

The information provided in the notification referred to in PRM 1.6.5R must cover all admissions to trading up to and including:

(1) the date of the notification; or 

(2) the last working day before the notification.