LR 8.6 Criteria for approval as a sponsor

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

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.]

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.

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.

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.

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 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

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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;4

   6
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

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8. (8)

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

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

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

   6

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.

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.

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.