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PR 1.1 Preliminary

Application

PR 1.1.1 R RP
  1. (1)

    1PR 2, PR 3, PR 4.2, PR 5.1, PR 5.3.1 UK to PR 5.3.3 G and PR 5.5 only apply (subject to paragraph (2)) in relation to:

    1. (a)

      an offer, or a request for admission to trading of transferable securities, in respect of which section 85 of the Act applies (other than an exempt offer under section 86 of the Act) and in relation to which the United Kingdom is the Home State;

    2. (b)

      an offer, or a request for admission to trading of transferable securities, where under section 87 of the Act a person has elected to have a prospectus in relation to the transferable securities; and

    3. (c)

      an offer, or a request for admission to trading of transferable securities, not referred to in paragraphs (a) or (b), in relation to which the United Kingdom is the Home State.

  2. (2)

    PR 2, PR 3, PR 4.2 , PR 5.3.1 UK to PR 5.3.3 G also apply in relation to an offer, or a request for admission to trading of transferable securities, where another competent authority of an EEA State has transferred the function of approving the prospectus to the FSA.

FSA exercising functions as competent authority

PR 1.1.2 G

In relation to the prospectus rules, the FSA is exercising functions as the competent authority under Part 6 of the Act (see section 72(1) of the Act).

Note: When exercising its functions as the competent authority under Part 6 of the Act, the FSA may use the name the UK Listing Authority.

Persons responsible for complying with rules

PR 1.1.3 R RP

A person must comply with all rules that are specified as being applicable to them.

PR 1.1.4 R RP

If a rule does not specify who is responsible for complying with it, then the following persons must comply with it:

  1. (1)

    in relation to an offer:

    1. (a)

      the issuer; and

    2. (b)

      the offeror (if this is a person other than the issuer);

  2. (2)

    in relation to a request for the admission to trading of transferable securities:

    1. (a)

      the issuer; and

    2. (b)

      the person requesting admission to trading (if this is a person other than the issuer).

PR 1.1.5 R RP

An issuer is not responsible under PR 1.1.4R (1)(a) or (2)(a) if it has not authorised or made the offer or the request for the admission to trading.

Provisions implementing the prospectus directive

PR 1.1.6 G RP

The following documents need to be considered together todetermine the effect of the prospectus directive:

  1. (1)

    Part 6 of the Act;

  2. (2)

    the PD Regulation;

  3. (3)

    these rules; and

  4. (4)

    the CESR recommendations.

PR 1.1.7 G RP

To assist readers, extracts from the Act andthe PD Regulation are reproduced in the text of these rules. Readers should however consult those documents themselves to see the full text.

CESR recommendations

PR 1.1.8 G RP

In determining whether Part 6 of the Act, these rules andthe PD Regulation has been complied with, the FSA will take into account whether a person has complied with the CESR recommendations.

Application of rules to supplementary prospectuses

PR 1.1.9 R RP

Unless the context otherwise requires, a reference in these rules to a prospectus includes a supplementary prospectus.

PR 1.2 Requirement for a prospectus and exemptions

Requirement for a prospectus

PR 1.2.1 UK RP

Sections 85 and 86 of the Act provide for when a prospectus approved by the FSA will be required:

85

(1)

It is unlawful for transferable securities to which this subsection applies to be offered to the public in the United Kingdom unless an approved prospectus has been made available to the public before the offer is made.

(2)

It is unlawful to request the admission of transferable securities to which this subsection applies to trading on a regulated market situated or operating in the United Kingdom unless an approved prospectus has been made available to the public before the request is made.

(3)

A person who contravenes subsection (1) or (2) is guilty of an offence and liable –

(a)

on summary conviction, to imprisonment for a term not exceeding 3 months or a fine not exceeding the statutory maximum or both;

(b)

on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine or both.

(4)

A contravention of subsection (1) or (2) is actionable, at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.

(5)

Subsection (1) applies to all transferable securities other than –

(a)

those listed in Schedule 11A;

(b)

such other transferable securities as may be specified in prospectus rules [see PR 1.2.2 R].

(6)

Subsection (2) applies to all transferable securities other than –

(a)

those listed in Part 1 of Schedule 11A;

(b)

such other transferable securities as may be specified in prospectus rules [see PR 1.2.3 R].

(7)

"Approved prospectus" means, in relation to transferable securities to which this section applies, a prospectus approved by the competent authority of the home State in relation to the issuer of the securities.

86

Exempt offers to the public

(1)

A person does not contravene section 85(1) if –

(a)

the offer is made to or directed at qualified investors only;

(b)

the offer is made to or directed at fewer than 100 persons, other than qualified investors, per EEA State;

(c)

the minimum consideration which may be paid by any person for transferable securities acquired by him pursuant to the offer is at least 50,000 euros (or an equivalent amount);

(d)

the transferable securities being offered are denominated in amounts of at least 50,000 euros (or equivalent amounts); or

(e)

the total consideration for the transferable securities being offered cannot exceed 100,000 euros (or an equivalent amount).

(2)

Where -

(a)

a person who is not a qualified investor ("the client") has engaged a qualified investor falling within Article 2.1(e)(i) of the prospectus directive to act as his agent; and

(b)

the terms on which the qualified investor is engaged enable him to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client,

an offer made to or directed at the qualified investor is not to be regarded for the purposes of subsection (1) as also having been made to or directed at the client.

(3)

For the purposes of subsection (1)(b), the making of an offer of transferable securities to –

(a)

trustees of a trust,

(b)

members of a partnership in their capacity as such, or

(c)

two or more persons jointly,

is to be treated as the making of an offer to a single person.

(4)

In determining whether subsection (1)(e) is satisfied in relation to an offer ("offer A"), offer A is to be taken together with any other offer of transferable securities of the same class made by the same person which –

(a)

was open at any time within the period of 12 months ending with the date on which offer A is first made; and

(b)

had previously satisfied subsection (1)(e).

(5)

For the purposes of this section, an amount (in relation to an amount denominated in euros) is an "equivalent amount" if it is an amount of equal value denominated wholly or partly in another currency or unit of account.

(6)

The equivalent is to be calculated at the latest practicable date before (but in any event not more than 3 working days before) the date on which the offer is first made.

(7)

"Qualified investor" means –

(a)

an entity falling within Article 2.1(e)(i), (ii) or (iii) of the prospectus directive;

(b)

an investor registered on the register maintained by the [FSA] under section 87R;

(c)

an investor authorised by an EEA State other than the United Kingdom to be considered as a qualified investor for the purposes of the prospectus directive.

Exempt securities – offers of securities to the public

PR 1.2.2 R RP

In accordance with section 85(5)(b) of the Act, section 85(1) of the Act does not apply to offers of the following types of transferable securities:

  1. (1)

    shares issued in substitution for shares of the same class already issued, if the issue of the new shares does not involve any increase in the issued capital;

  2. (2)

    transferable securities offered in connection with a takeover by means of an exchange offer, if a document is available containing information which is regarded by the FSA as being equivalent to that of the prospectus, taking into account the requirements of EU1 legislation;

    1
  3. (3)

    transferable securities offered, allotted or to be allotted in connection with a merger, if a document is available containing information which is regarded by the FSA as being equivalent to that of the prospectus, taking into account the requirements of EU1 legislation;

    1
  4. (4)

    shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which the dividends are paid, if a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer;

  5. (5)

    transferable securities offered, allotted or to be allotted to existing or former directors or employees by their employer which has transferable securities already admitted to trading or by an affiliated undertaking, if a document is made available containing information on the number and nature of the transferable securities and the reasons for and details of the offer.

Exempt securities – admission to trading on a regulated market

PR 1.2.3 R RP

In accordance with section 85(6)(b) of the Act, section 85(2) of the Act does not apply to the admission to trading of the following types of transferable securities:

  1. (1)

    shares representing, over a period of 12 months, less than 10 per cent of the number of shares of the same class already admitted to trading on the same regulated market;

  2. (2)

    shares issued in substitution for shares of the same class already admitted to trading on the same regulated market, if the issue of the shares does not involve any increase in the issued capital;

  3. (3)

    transferable securities offered in connection with a takeover by means of an exchange offer, if a document is available containing information which is regarded by the FSA as being equivalent to that of the prospectus, taking into account the requirements of EU1 legislation;

    1
  4. (4)

    transferable securities offered, allotted or to be allotted in connection with a merger, if a document is available containing information which is regarded by the FSA as being equivalent to that of the prospectus, taking into account the requirements of EU1 legislation;

    1
  5. (5)

    shares offered, allotted or to be allotted free of charge to existing shareholders, and dividends paid out in the form of shares of the same class as the shares in respect of which the dividends are paid, if the shares are of the same class as the shares already admitted to trading on the same regulated market and if a document is made available containing information on the number and nature of the shares and the reasons for and details of the offer;

  6. (6)

    offered, allotted or to be allotted to existing or former directors or employees by their employer or an affiliated undertaking, if the transferable securities are of the same class as the transferable securities already admitted to trading on the same regulated market and if a document is made available containing information on the number and nature of the transferable securities and the reasons for and detail of the offer;

  7. (7)

    shares resulting from the conversion or exchange of other transferable securities or from the exercise of the rights conferred by other transferable securities, if the shares are of the same class as the shares already admitted to trading on the same regulated market;

  8. (8)

    transferable securities already admitted to trading on another regulated market, on the following conditions:

    1. (a)

      that these transferable securities, or transferable securities of the same class, have been admitted to trading on that other regulated market for more than 18 months;

    2. (b)

      that, for transferable securities first admitted to trading after the 31 December 2003, the admission to trading on that other regulated market was associated with an approved prospectus made available to the public in accordance with Article 14 of the prospectus directive;

    3. (c)

      that, except where (b) applies, for transferable securities first admitted to listing after 30 June 1983, listing particulars were approved in accordance with the requirements of Directive 80/390/EEC or Directive 2001/34/EC;

    4. (d)

      that the ongoing obligations for trading on that other regulated market have been fulfilled;

    5. (e)

      that the person requesting the admission to trading under this exemption makes a summary document available to the public in a language accepted by the competent authority of the EEA State of the regulated market where admission is sought;

    6. (f)

      that the summary document referred to in paragraph (e) is made available to the public in the EEA State of the regulated market where admission to trading is sought in the manner set out in Article 14 of the prospectus directive; and

    7. (g)

      that the contents of the summary document comply with article 5(2) of the prospectus directive. Also the document must state where the most recent prospectus can be obtained and where the financial information published by the issuer pursuant to its ongoing disclosure obligations is available [Note: article 4(2) PD].

PR 1.2.4 G RP
  1. (1)

    The summary document referred to in PR 1.2.3R (8) should at least contain the information that would be required in a summary if the summary were being produced at the date of the summary document.

  2. (2)

    The content of the summary document may be obtained from publicly available information on the issuer.

  3. (3)

    If the information is obtained from publicly available information on the issuer, the information should be accurately reproduced from publicly available information and no facts should be omitted which would make the reproduced information misleading.