PRM 1.4 Prospectus requirement

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]