PCEF Workshop 1

  1. What applications would a private company have to make to become listed?
    • - Application to re-regsiter as a public company
    • - Application for admission to listing
    • - Application for admission to trading
  2. What rule says that admission to trading is a requirement of admission to listing?
    LR 2.2.3R and s75(1) FSMA 2000
  3. Why do the listing rules sometimes have to be complied with by a non-listed company?
    • If a company is seeking admission to trading they need to comply with the listing rules because:
    • s75(4)(a) FSMA 2000 - the competent authority may not grant an application for listing unless it is satisfied that the listing rules are complied with.
  4. What must a private company comply with in order to be re-registered as a public company under the Companies Act 2006?
    • Companies Act ss90-96 including:
    • - SPECIAL RESOLUTION -Passing a special resolution
    • - APPLICATION - Filing an application with Companies House in the approved form
    • - ALLOTTED SHARE CAPITAL - Have an allotted share capital with a nominal value of not less than £50 000
    • - AUDITORS' STATEMENT - File an auditors' statement showing that at the balance sheet date the amount of the company's net assets was not less than the amount of its called-up share capital and undistributable reserves.
    • - CHANGE NAME - Change its name so that it states the company is to be a public limited company.
  5. For a private company to convert to a public company how much of its allotted shares must be paid up?

    What about if it wants to become a listed company?
    • - At least 25% of nominal value AND
    • - WHOLE of any premium
    • Must be paid (s91(1)(b) CA 2006)

    • - Shares must all be fully paid (LR 2.2.4R)
  6. Are listed companies and public companies the same thing?
    • NO
    • All listed companies are public companies (private companies cannot listed securities (Reg. 3, FSMA 2000 (Official Listing of Securities) Regulations 2001)) but not all public companies are listed companies.

    Public company (s4(2) CA 2006) - certificate of incorporation states it is a public company and it has complied with CA 2006 re-registration requirements.

    Listed company - Must be admitted to the official list and admitted to trading
  7. Is the London Stock exchange a 'recognised investment exchange?' and therefore excempt from the general prohibition in section 19 of the Financial Services and Markets Act 2000 from carrying on a 'regulated activity'?
    YES it is a 'recognised investment exchange' (s285 FSMA 2000). It is therefore exempt from the general prohibition as regards regulated activities which are carried on as part of the Exchange's business.
  8. For a company's shares to be admitted to the Official List, it is necessary that they are also admitted to trading on the Main Market of the London Stock Exchange or on another market of a recognised investment exchange.

    True or false?
    TRUE (LR 2.2.3)

    NB: The only recognised investment echange on this course is the London Stock Exchange Main Market (not AIM)
  9. It is a requirement of an application for listing of shares that a sufficient number of the shares will be "distributed to the public in one or more EEA States".

    What percentage of shares in the public hands wil meet this requirement?
    25% (Listing Rule 6.1.19R)

    Definition of 'in the public hands' depends on circumstances. There is discretion to accept a lower percentage if satisfied that the market will operate properly as such a level (LR 6.1.20G)
  10. Which two methods of bringing shares to listing may involve a transfer of existing shares, rather than an issue of new shares?
    A placing and an offer for sale
  11. Which methods of bringing shares to listing will raise finance for the applicant company?
    • - An offer for subscription
    • - An intermediaries offer

    An 'offer for sale' is where existing shareholders in the company sell their shares as part of the flotation and receive the proceeds themselves.

    An 'introduction' is a method of bringing securities to listing involving the admission of shares already in issue (sometimes used by overseas companies with an existing listing on a foreign exchange and seeking a 'dual listing' in London forexample)
  12. Which method of bringing shares to listing is not available to a company without shares already listed?
    A rights issue

    A rights issue is a form of 'secondary offer' involving an offer of shares or other securities to existing holders made in proportion to their existing holdings using a renounceable lettter of allotment (or other negotiable instrument) and usually at a discount to the market price.
Card Set
PCEF Workshop 1
PCEF Workshop 1 revision