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 it4considers whether to refuse an application for approval as a sponsor are set out in DEPP3.]

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FSA will generally have regard amongst other things to the person's:

1. (1)

   prior relevant experience of providing sponsor services;

2. (2)

   skills, knowledge and expertise necessary for the proper performance of sponsor services; and

3. (3)

   prior corporate finance experience.

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FSA may also take into account, where relevant, the quality of anyguidance or advice on the listing rules or disclosure rules and transparency rules 5the person has given in circumstances other than in providing sponsor services.

A sponsor will generally be regarded as having appropriate 4systems and controls if there are:

1. (1)

   clear and effective reporting lines in place (including clear and effective management responsibilities)4;

2. (2)

   effective systems and controls for the appropriate4 supervision of employees providing sponsor services4;

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3. (3)

   effective systems and controls to ensure its compliance with all applicable listing rules when performing sponsor services4;

4. (4)

   [deleted]4

   4
5. (5)

   effective arrangements for creating4 and retaining for 6 years, adequate records of all matters relating to the provision of sponsor services to a listed company or applicant;4

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6. (6)

   effective systems and controls to ensure that it has appropriate staffing arrangements for the performance of sponsor services with due care and skill; and4

7. (7)

   effective systems and controls to ensure that employees performingsponsor services receive appropriate guidance and training for the performance of those services with due care and skill.4

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;

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4. (4)

   the volume and size of the transactions it anticipates undertaking in the following year; and4

   4
5. (5)

   the degree of risk associated with the transactions it undertakes.4

4A sponsor will generally be regarded as having appropriate systems and controls if it has in place effective policies and procedures:

1. (1)

   to ensure that decisions taken on managing conflicts of interest are taken by appropriately senior staff and on a timely basis;

2. (2)

   to monitor whether arrangements put in place to manage conflicts are effective;

3. (3)

   to ensure that individuals within the sponsor are appropriately trained to enable them to identify, escalate and manage conflicts of interest; and

4. (4)

   to ensure that appropriate records are kept of decisions relating to identification and management of conflicts and the basis upon which it has reached those decisions.

4The policies and procedures referred to in LR 8.6.13A G are distinct from the actual organisational and administrative arrangements that a sponsor is required to put in place and maintain under LR 8.3.9 R to manage specific conflicts.