LR 6.1 Application

1This chapter applies to an applicant for the admission of equity securities to primary listing.

1. (1)

   A new applicant for the admission of sharesor securities convertible into its own shares must have published or filed audited accounts that:

   1. (a)

      cover at least three years; [Note: article 44 CARD]

   2. (b)

      are the latest accounts for a period ended not more than six months before the date of the prospectus or listing particulars for the relevant securities;

   3. (c)

      are consolidated accounts for the applicant and all its subsidiary undertakings;

   4. (d)

      have been independently audited, in accordance with the auditing standards applicable in an EEA State or an equivalent standard; and

   5. (e)

      have been reported on by the auditors without modification.

2. (2)

   A new applicant must:

   1. (a)

      take all reasonable steps to ensure that its auditors are independent of it; and

   2. (b)

      obtain written confirmation from its auditors that they comply with guidelines on independence issued by their national accountancy and auditing bodies.

A new applicant for the admission of shares or securities convertible into its own shares must demonstrate that:

1. (1)

   at least 75% of the applicant's business is supported by a historic revenue earning record which covers the period for which accounts are required under LR 6.1.3R (1);

2. (2)

   it controls the majority of its assets and has done so for at least the period referred to in paragraph (1); and

3. (3)

   it will be carrying on an independent business as its main activity.

If a mineral company applies for the admission of its equity securities:

1. (1)

   LR 6.1.3R (1)(a) does not apply to the application; and

2. (2)

   LR 6.1.3R (1)(b) to (e) and (2) apply to the mineral company only to the extent that it has published accounts.

LR 6.1.4 R does not apply to a mineral company that applies for the admission of its equity securities.

1. (1)

   This rule applies to a mineral company that is a new applicant for the admission of its equity securities.

2. (2)

   If the mineral company does not hold controlling interests in a majority (by value) of the properties, fields, mines or other assets in which it has invested, it must demonstrate that it has a reasonable spread of direct interests in mineral resources and has rights to participate actively in their extraction, whether by voting or through other rights which give it influence in decisions over the timing and method of extraction of those resources.

If a scientific research based company applies for the admission of its equity securities:

1. (1)

   LR 6.1.3R (1)(a) does not apply to the application; and

2. (2)

   LR 6.1.3R (1)(b) to (e)and (2) apply to the scientific research based company only to the extent that it has published accounts.

An applicant for the admission of equity securities of a scientific research based company does not need to satisfy LR 6.1.4 R but must:

1. (1)

   demonstrate its ability to attract funds from sophisticated investors;

2. (2)

   intend to raise at least £10 million pursuant to a marketing at the time of listing;

3. (3)

   have a capitalisation, before the marketing at the time of listing, of at least £20 million (based on the issue price and excluding the value of any securities which have been issued in the six months before listing);

4. (4)

   have as its primary reason for listing the raising of finance to bring identified products to a stage where they can generate significant revenues; and

5. (5)

   demonstrate that it has a three year record of operations in laboratory research and development including:

   1. (a)

      details of patents granted or details of progress of patent applications; and

   2. (b)

      the successful completion of, or the successful progression of, significant testing of the effectiveness of its products.

An applicant for the admission of shares must satisfy the FSA that it and its subsidiary undertakings (if any) have sufficient working capital available for the group's requirements for at least the next 12 months from the date of publication of the prospectus or listing particulars (as the case may be) for the shares that are being admitted.

1. (1)

   If an application is made for the admission of a class of shares, a sufficient number of shares of that class must, no later than the time of admission, be distributed to the public in one or more EEA States.

2. (2)

   For the purposes of paragraph (1), account may also be taken of holders in one or more states that are not EEA States, if the shares are listed in the state or states.

3. (3)

   For the purposes of paragraph (1), a sufficient number of shares will be taken to have been distributed to the public when 25% of the shares for which application for admission has been made are in public hands.

4. (4)

   For the purposes of paragraphs (1), (2) and (3), shares are not held in public hands if they are held, directly or indirectly by:

   1. (a)

      a director of the applicant or of any of its subsidiary undertakings; or

   2. (b)

      a person connected with a director of the applicant or of any of its subsidiary undertakings; or

   3. (c)

      the trustees of any employees' share scheme or pension fund established for the benefit of any directors and employees of the applicant and its subsidiary undertakings; or

   4. (d)

      any person who under any agreement has a right to nominate a person to the board of directors of the applicant; or

   5. (e)

      any person or persons in the same group or persons acting in concert 2who have an interest in 5% or more of the shares of the relevant class.

5. (5)

   For the purposes of paragraph (3), treasury shares are not to be taken into consideration when calculating the number of shares of the class. [Note: article 48 CARD]

The FSA will not admit shares of a company incorporated in a non-EEA State that are not listed either in its country of incorporation or in the country in which a majority of its shares are held, unless the FSA is satisfied that the absence of the listing is not due to the need to protect investors. [Note: article 51 CARD]

1. (1)

   The total of all issued warrants to subscribe for equity shares or options to subscribe for equity shares must not exceed 20% of the issued equity share capital (excluding treasury shares) of the applicant as at the time of issue of the warrants or options.

2. (2)

   Rights under employees' share schemes are not included for the purpose of the 20% limit in paragraph (1).

To be listed, securities must be eligible for electronic settlement.