LR 8.6 Criteria for approval as a sponsor

The FSA will maintain a list of sponsors on its website.

When considering an application for approval as a sponsor the FSA may:

1. (1)

   carry out any enquiries and request any further information which it considers appropriate, including consulting other regulators;

2. (2)

   request that the applicant or its specified representative answer questions and explain any matter the FSA considers relevant to the application;

3. (3)

   take into account any information which it considers appropriate in relation to the application.2

   2
4. (4)

   [deleted]2

   2

[Note: The decision-making procedures that the FSA will follow when isconsiders whether to refuse an application for approval as a sponsor are set out in DEPP3.]

In assessing the competence of a sponsor, the FSA will have regard to:

1. (1)

   the number of suitably experienced employees retained by the sponsor, taking into account the size, number and nature of transactions undertaken and anticipated by the sponsor;

2. (2)

   the experience of those employees who are held out to the FSA as being suitably experienced employees; and

3. (3)

   the seniority of those suitably experienced employees.

1. (1)

   An employee will generally be accepted as suitably experienced if he or she has recent experience providing, in a competent manner, advice and services and fulfilling all responsibilities of a sponsor in relation to a transaction when a sponsor must be appointed.

2. (2)

   The FSA may consider, in addition to the experience described in paragraph (1), an employee's recent experience, acting in a senior capacity, providing advice and services in a competent manner on:

   1. (a)

      transactions where a prospectus is required under the Prospectus Directive; and

   2. (b)

      transactions which are similar in terms of size and complexity to those transactions set out in LR 8.2.1 R.

3. (3)

   Recent experience would normally be demonstrated if an employee has provided advice or services:

   1. (a)

      at least three times in the preceding 36 months; and

   2. (b)

      at least once in the preceding 12 months.

The fewer the number of suitably experienced employees that a sponsor has, the greater the need that those employees do not rely on the same transactions to demonstrate their experience in advising on the listing rules, unless each of those employees has extensive experience in providing advice on the listing rules.

A sponsor will generally be regarded as having adequate systems and controls if there are:

1. (1)

   clear and effective reporting lines;

2. (2)

   effective systems and controls for the adequate supervision of employees performing any of the services set out in LR 8.2, LR 8.3 and LR 8.4;

3. (3)

   effective systems and controls to ensure its compliance with all applicable listing rules when performing any of the services set out in LR 8.2, LR 8.3 or LR 8.4;

4. (4)

   effective systems and controls for identifying and managing conflicts of interest; and

5. (5)

   effective arrangements for making and retaining, for 6 years, adequate records of all matters relating to the provision of any services to a listed company or applicant.

The nature and extent of the systems and controls which a sponsor will need to maintain will depend upon a variety of factors including:

1. (1)

   the nature, scale and complexity of its business;

2. (2)

   the diversity of its operations;

3. (3)

   the volume and size of the transactions it undertakes;and

4. (4)

   the volume and size of the transactions it anticipates undertaking in the following year.

To enable it to comply with its obligation to maintain appropriate systems and controls, a sponsor should carry out an annual review of them.

A sponsor will generally be regarded as having effective systems and controls for the adequate supervision of employees if:

1. (1)

   all employees involved in the provision of any of the services described in LR 8.2, LR 8.3 and LR 8.4 are adequately supervised by a suitably experienced employee;

2. (2)

   all employees providing any of the services described in LR 8.2, LR 8.3 and LR 8.4 do not act beyond their proper authority;

3. (3)

   for each transaction which requires a sponsor as set out in LR 8.2, LR 8.3 and LR 8.4, an employee, whose name is on the list required by LR 8.6.15 R:

   1. (a)

      is appointed by the sponsor to liaise with the FSA;

   2. (b)

      reviews all the assurances provided to the FSA; and

   3. (c)

      signs the Confirmation of Independence, the Sponsor’s Declaration and any Listing Application forms that may be required; and

4. (4)

   for each transaction which requires a sponsor as set out in LR 8.2, employees who are sufficiently knowledgeable about the transaction are available to answer queries from the FSA on any business day between the hours of 8 a.m. and 6 p.m.