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LR 7.1 Application and purpose

Application

LR 7.1.1 R RP

1The Listing Principles apply to every listed company with a primary listing of equity securities in respect of all its obligations arising from the listing rules and the disclosure rules and transparency rules.

Purpose

LR 7.1.2 G RP

The purpose of the Listing Principles is to ensure that listed companies pay due regard to the fundamental role they play in maintaining market confidence and ensuring fair and orderly markets.

LR 7.1.3 G RP

The Listing Principles are designed to assist listed companies in identifying their obligations and responsibilities under the listing rules and the disclosure rules and transparency rules. The Listing Principles should be interpreted together with relevant rules and guidance which underpin the Listing Principles.

LR 7.1.4 G RP

DEPP 6 (Penalties) and EG 72 set out guidance on the consequences of breaching the Listing Principles.

2 2

LR 7.2 The Listing Principles

LR 7.2.1 R RP

The Listing Principles are as follows:

Principle 1

A listed company must take reasonable steps to enable its directors to understand their responsibilities and obligations as directors.

Principle 2

A listed company must take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations.

Principle 3

A listed company must act with integrity towards holders and potential holders of its listedequity securities.

Principle 4

A listed company must communicate information to holders and potential holders of its listedequity securities in such a way as to avoid the creation or continuation of a false market in such listedequity securities.

Principle 5

A listed company must ensure that it treats all holders of the same class of its listedequity securities that are in the same position equally in respect of the rights attaching to such listedequity securities.

Principle 6

A listed company must deal with the FSA in an open and co-operative manner.

Guidance on Principle 2

LR 7.2.2 G RP

Principle 2 is intended to ensure that listed companies have adequate procedures, systems and controls to enable them to comply with their obligations under the listing rules and disclosure rules and transparency rules. In particular, the FSA considers that listed companies should place particular emphasis on ensuring that they have adequate procedures, systems and controls in relation to:

  1. (1)

    identifying whether any obligations arise under LR 10 (Significant transactions) and LR 11 (Related party transactions); and

  2. (2)

    the timely and accurate disclosure of information to the market.

LR 7.2.3 G RP

Timely and accurate disclosure of information to the market is a key obligation of listed companies. For the purposes of Principle 2, a listed companywith a primary listing of equity securities should have adequate systems and controls to be able to:

  1. (1)

    ensure that it can properly identify information which requires disclosure under the listing rules or disclosure rules and transparency rules in a timely manner; and

  2. (2)

    ensure that any information identified under paragraph (1) is properly considered by the directors and that such a consideration encompasses whether the information should be disclosed.