FCA Handbook - UKLR 4 Sponsors: responsibilities of issuers

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UKLR 4.1 Application

This chapter applies to all issuers with a listing of equity shares in, or applying for admission of equity shares to, the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category.

UKLR 4.2 When a sponsor must be appointed or its guidance obtained

When a sponsor must be appointed

An issuer with a listing of equity shares in, or applying for admission of its equity shares to, the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category must appoint a sponsor on each occasion that the issuer:
(1)
is required to submit any of the following documents to the FCA in connection with an application for admission of equity shares to the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category:
1. (a)
  a prospectus or supplementary prospectus; or
2. (b)
  a summary as required by PRM 1.4.13R(3);
3. (c) [deleted]
(1A) is required to publish a prospectus under PRM 1.4.1R or a supplementary prospectus under PRM 10.1.1R in connection with a further issuance of equity shares listed in the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category;
(2) is required to publish a document under PRM 1.4.9R or PRM 1.4.10R;
(3)
is required to submit to the FCA a reverse takeover circular for approval;
(4)
is required by UKLR 11 (Closed-ended investment funds: requirements for listing and continuing obligations) to submit to the FCA a relevant related party transaction circular for approval;
(5)
is required to do so by the FCA because it appears to the FCA that there is, or there may be, a breach of the listing rules, the disclosure requirements or the transparency rules by the listed issuer;
(6)
is required by UKLR 8.2.1R(3) (including as modified by UKLR 11.5.4R) to obtain a confirmation that the terms of a proposed transaction or arrangement with a related party are fair and reasonable;
(7)
is required by the FCA to have a sponsor submit a letter to the FCA setting out how the applicant satisfies the criteria in UKLR 3 and, if applicable, UKLR 5, UKLR 11 or UKLR 13;
(8)
is required to procure that a sponsor contact the FCA as specified in UKLR 13.4, including so that the sponsor provides any requested confirmation; or
(9)
is required to procure that a sponsor submits to the FCA a letter in relation to the issuer’s eligibility in connection with a reverse takeover under UKLR 7.5.13G(2).

An issuer must appoint a sponsor where it applies to transfer its category of listing from:

(1)
a listing in the equity shares (commercial companies) category to a listing in the closed-ended investment funds category;
(2)
a listing in the equity shares (commercial companies) category to a listing in the equity shares (shell companies) category;
(3)
a listing in the closed-ended investment funds category to a listing in the equity shares (commercial companies) category;
(4)
a listing in the open-ended investment companies category to a listing in the equity shares (commercial companies) category;
(5)
a listing in the equity shares (international commercial companies secondary listing) category to a listing in the equity shares (commercial companies) category;
(6)
a listing in the equity shares (international commercial companies secondary listing) category to a listing in the equity shares (shell companies) category;
(7)
a listing in the equity shares (international commercial companies secondary listing) category to a listing in the closed-ended investment funds category;
(8)
a listing in the equity shares (transition) category to a listing in the equity shares (commercial companies) category;
(9)
a listing in the equity shares (transition) category to a listing in the equity shares (shell companies) category; or
(10)
a listing in the equity shares (transition) category to a listing in the closed-ended investment funds category.

An issuer with equity shares admitted to the equity shares (commercial companies) category or the closed-ended investment funds category must appoint a sponsor where it proposes to make a request to the FCA to modify, waive or substitute the operation of UKLR 7, UKLR 8 or UKLR 11.

An issuer with a listing of equity shares in the equity shares (commercial companies) category or the closed-ended investment funds category must appoint a sponsor where it proposes to make a request to the FCA for individual guidance in relation to the listing rules, the disclosure requirements or the transparency rules in connection with a matter referred to in UKLR 7, UKLR 8 or UKLR 11.

If an issuer with a listing of equity shares in, or applying for admission of its equity shares to, the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category wishes to seek individual guidance about a matter that is, or will be, the subject of a sponsor service, the FCA expects to discuss all matters relating to a sponsor service directly with a sponsor. However, in appropriate circumstances, the FCA will communicate directly with the issuer or its advisers.

Other transactions where an issuer must obtain a sponsor’s guidance

If an issuer with a listing of equity shares in the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category is proposing to enter into a transaction which, due to its size or nature, could amount to a reverse takeover or an initial transaction, it must obtain the guidance of a sponsor to assess the application of the listing rules, the disclosure requirements and the transparency rules.

UKLR 4.3 Notifications to FCA

A listed issuer or applicant must ensure the FCA is informed promptly of the name and contact details of any sponsor appointed in accordance with the listing rules (either by the listed issuer or applicant, or by the sponsor itself).

(1)
A listed issuer or applicant must notify the FCA, in writing, immediately of the resignation or dismissal of any sponsor that it had appointed.
(2)
In the case of a dismissal, the reasons for the dismissal must be included in the notification.
(3)
The notification must be copied to the sponsor.

UKLR 4.4 Issuer appoints more than one sponsor

Where a listed issuer or applicant appoints more than one sponsor to provide a sponsor service, the listed issuer or applicant must:

(1)
ensure that one sponsor takes responsibility for contact with the FCA in respect of administrative arrangements for the sponsor service; and
(2)
inform the FCA promptly, in writing, of the name and contact details of the sponsor taking responsibility under (1).

UKLR 4.5 Cooperation with sponsors

In relation to the provision of a sponsor service, an issuer with a listing of equity shares in, or applying for admission of its equity shares to, the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category must cooperate with its sponsor by providing the sponsor with all information reasonably requested by the sponsor for the purpose of carrying out the sponsor service in accordance with UKLR 24.

(1)
The role of a sponsor – including to provide the FCA with assurances, explanations and confirmations relating to compliance with the listing rules by issuers with a listing of equity shares, or applying for admission of equity shares, and to provide guidance to issuers with a listing of equity shares, or applying for admission of equity shares, in understanding and meeting their responsibilities under the listing rules, disclosure requirements and transparency rules – is set out in UKLR 24.2 and UKLR 24.3.
(2)
The assurances, explanations and confirmations in (1) may relate to shareholder approvals obtained, or other work undertaken, by an issuer before the appointment of a sponsor in relation to a particular transaction. Therefore, an issuer with a listing of equity shares, or applying for admission of its equity shares, to the equity shares (commercial companies) category, the closed-ended investment funds category or the equity shares (shell companies) category is encouraged to engage with a sponsor at the earliest possible stage if it is in doubt about the application of the listing rules, the disclosure requirements or the transparency rules to a particular matter.