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LR 8.6 Criteria for approval as a sponsor

List of sponsors

LR 8.6.1GRP

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

Application for approval as a sponsor

LR 8.6.2RRP

A person wanting to provide sponsor services4, and to be included on the list of sponsors, must apply to the FCA for approval as a sponsor by submitting the following to the Sponsor Supervision Team at the FCA's address:

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  1. (1)

    a completed Sponsor Firm Application Form; and4

  2. (2)

    [deleted]4

    4
  3. (3)

    the application fee set out in 1FEES 31

[Note: The Sponsor's Firm Application Form can be found on the UKLA section of the FCA's website.]

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LR 8.6.3RRP

A person wanting to provide sponsor services 4and be included on the list of sponsors must also submit:

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  1. (1)

    all additional documents, explanations and information as required by the FCA; and

  2. (2)

    verification of any information in such a manner as the FCA may specify.

LR 8.6.4GRP

When considering an application for approval as a sponsor the FCA 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 FCA considers relevant to the application; and6

  3. (3)

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

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  4. (4)

    [deleted]2

    2

[Note: The decision-making procedures that the FCA will follow when it4considers whether to refuse an application for approval as a sponsor are set out in DEPP3.]

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Criteria for approval as a sponsor

LR 8.6.5RRP

The FCA will approve a person as a sponsor only if it is satisfied that the person :

4
  1. (1)

    is 4an authorised person or a member of a designated professional body;

  2. (2)

    is 4competent to performsponsor services4; and

  3. (3)

    has appropriate 4systems and controls in place to ensure that it cancarry out its role as a sponsor in accordance with this chapter4.

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LR 8.6.5ARRP

7The FCA may impose restrictions or limitations on the services a sponsor can provide at the time of granting a sponsor's approval.

LR 8.6.5BGRP

7Situations when the FCA may impose restrictions or limitations on the services a sponsor can provide include (but are not limited to) where it appears to the FCA that:

  1. (1)

    the employees of the person applying to be a sponsor whom it is proposed will perform sponsor services have no or limited relevant experience and expertise of providing certain types of sponsor services or of providing sponsor services to certain types of company; or

  2. (2)

    the person applying to be a sponsor does not have systems and controls in place which are appropriate for the nature of the sponsor services which the person applying to be a sponsor proposes to undertake.

[Note: A statutory notice may be required under section 88 of the Act. Where this is the case, the procedure for giving a statutory notice is set out in DEPP.]

LR 8.6.6RRP

A sponsor must comply, at all times, with the criteria set out in LR 8.6.5 R.

Competence of a sponsor

LR 8.6.7RRP

A person 4will be competent toprovide sponsor services4 if it has a broad range of relevant experience and expertise in providing advice to listed companies and on the listing rules.

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LR 8.6.8G
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  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
  3. (3)

    [deleted]4

    4
LR 8.6.9G
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
    1. (a)

      [deleted]4

      444
    2. (b)

      [deleted]4

      4
  3. (3)

    [deleted]4

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LR 8.6.9AG

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FCA 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.

LR 8.6.9BGRP

4In assessing whether a person is competent to provide, or to continue to provide, sponsor services, the FCA 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.

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LR 8.6.10R

[deleted]4

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LR 8.6.11G

[deleted]4

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Systems and controls: general

LR 8.6.12GRP

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

4
  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 engaged in the provision of sponsor services by the sponsor64;

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  3. (3)

    effective systems and controls to ensure its compliance with all applicable listing rules at all times, including6 when performing sponsor services4;

  4. (4)

    [deleted]4

    4
  5. (5)

    [deleted]6

    44446
  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;4

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  7. (7)

    effective systems and controls to ensure that employees engaged in the provision of6 sponsor services by the sponsor6 receive appropriate guidance and training for the performance of those services with due care and skill; and64

    6
  8. (8)

    effective systems and controls to identify and manage conflicts of interest.6

LR 8.6.13GRP

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;

    4
  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

Systems and controls: conflicts of interest4

LR 8.6.13AGRP

4A sponsor will generally be regarded as having appropriate systems and controls for identifying and managing conflicts6 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; and6

  3. (3)

    to ensure that individuals within the sponsor are appropriately trained to enable them to identify, escalate and manage conflicts of interest.6

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  4. (4)

    [deleted]6

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LR 8.6.13BGRP

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.

LR 8.6.14G

[deleted]4

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4
LR 8.6.15R

[deleted]4

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LR 8.6.16G

[deleted]4

4
  1. (1)

    [deleted]4

    4
  2. (2)

    [deleted]4

    4
  3. (3)

    [deleted]4

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    1. (a)

      [deleted]4

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    2. (b)

      [deleted]4

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    3. (c)

      [deleted]4

      4
  4. (4)

    [deleted]4

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Systems and controls: record management

LR 8.6.16ARRP

6A sponsor must have in place effective arrangements to create and retain for six years accessible records which are sufficient to be capable of demonstrating that it has provided sponsor services and otherwise complied with its obligations under LR 8in accordance with the listing rules, including:

  1. (1)

    where a declaration is to be submitted under LR 8.4.3R (1), LR 8.4.9R (1), LR 8.4.13R (1), LR 8.4.14R (2)or LR 8.4.17 R or where relevant pursuant to an appointment under LR 8.2.1R (5), the basis of each declaration given;

  2. (2)

    where any opinion, assurance or confirmation is provided by a sponsor to the FCA or a company with or applying for a premium listing in relation to a sponsor service, the basis of that opinion, assurance or confirmation;

  3. (3)

    where a sponsor provides guidance to a company with or applying for a premium listing pursuant to LR 8.2.2 R, LR 8.2.3 R or LR 8.3.1R (2), the basis upon which the guidance is given and upon which any judgments or opinions underlying the guidance have been made or given; and

  4. (4)

    the steps taken to comply with its conflictsobligations under LR 8.3.7B R, LR 8.3.9 R and LR 8.3.11 R and its ongoing eligibility obligations underLR 8.6.6 R.

LR 8.6.16BGRP

6Records should:

  1. (1)

    be capable of timely retrieval; and

  2. (2)

    include material communications which relate to the provision of sponsor services, including any advice or guidance given to a company with or applying for a premium listing in relation to their responsibilities under the listing rules, the disclosure rules and the transparency rules.

LR 8.6.16CGRP

6In considering whether a sponsor has satisfied the requirements regarding sufficiency of records in LR 8.6.16A R, the FCA will consider whether the records would enable a person with general knowledge of the sponsor regime but no specific knowledge of the actual sponsor service undertaken to understand and verify the basis upon which material judgments have been made throughout the provision of the sponsor service.

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LR 8.6.17R

[deleted]6

LR 8.6.18R

[deleted]6

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Contact persons

LR 8.6.19RRP

4For each transaction for which it provides sponsor services, a sponsor must:

  1. (1)

    notify the FCA as soon as practicableof the name and contact details of the maincontactperson or persons in the sponsor for that transaction; and

  2. (2)

    ensure that thecontact person or persons:

    1. (a)

      have sufficient knowledge about the listed company or applicant and the proposed transactionto be able to answer queries from the FCA about it; and

    2. (b)

      are available to answer queries from the FCA on any business day between 76am and 6pm.

      6