LR 10.1 Preliminary
Application
The purpose of this chapter is to ensure that shareholders of companies with securities5 listed:
3- (1)
are notified of certain transactions entered into by the listed company; and
- (2)
have the opportunity to vote on larger proposed transactions.
Meaning of "transaction"
In this chapter (except where specifically provided to the contrary) a reference to a transaction by a listed company:
- (1)
(subject to paragraphs (3),(4) and (5)) includes all agreements (including amendments to agreements) entered into by the listed company or its subsidiary undertakings;
- (2)
includes the grant or acquisition of an option as if the option6 had been exercised except that, if exercise is solely at the listed company's or subsidiary undertaking's discretion, the transaction will be classified on exercise and only the consideration (if any) for the option6 will be classified on the grant or acquisition;
- (3)
excludes a transaction in the ordinary course of business;
4 - (4)
excludes an issue of securities, or a transaction to raise finance, which does not involve the acquisition or disposal of any fixed asset of the listed company or of its subsidiary undertakings; 6
- (5)
excludes any transaction between the listed company and its wholly-owned subsidiary undertaking or between its wholly-owned subsidiary undertakings; and6
- (6)
excludes a transaction where the listed company purchases its own equity shares.6
This chapter is intended to cover transactions that are outside the ordinary course of the listed company's business and may change a security holder's economic interest in the company's assets or liabilities (whether or not the change in the assets or liabilities is recognised on the company's balance sheet).
In assessing whether a transaction is in the ordinary course of a company's business under this chapter, the FCA will have regard to the size and incidence of similar transactions which the company has entered into. The FCA may determine that a transaction is not in the ordinary course of business because of its size or incidence.