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You are viewing the version of the document as on 2099-07-01.

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    2099-07-01

UKLR 11.2 Requirements for listing

UKLR 11.2.1R

1To be listed, an applicant must comply with:

  1. (1)

    the following provisions of UKLR 5 (Equity shares (commercial companies): requirements for admission to listing), modified so that references to the equity shares (commercial companies) category are to the closed-ended investment funds category:

    1. (a)

      UKLR 5.4.1R(1);

    2. (b)

      UKLR 5.4.2R to UKLR 5.4.4G;

    3. (c)

      UKLR 5.4.7R;

    4. (d)

      UKLR 5.5.1R to UKLR 5.5.4G; and

    5. (e)

      UKLR 5.6.1R; and

  2. (2)

    UKLR 11.2.3R to UKLR 11.2.15R.

Shares of a third country applicant

UKLR 11.2.2R

1The FCA will not admit shares of an applicant incorporated in a third country that are not listed either in its country of incorporation or in the country in which a majority of its shares are held, unless the FCA is satisfied that the absence of the listing is not due to the need to protect investors.

Investment activity

UKLR 11.2.3R

1An applicant must invest and manage its assets in a way which is consistent with its object of spreading investment risk.

UKLR 11.2.4R
  1. (1)

    1An applicant and its subsidiary undertakings must not conduct any trading activity which is significant in the context of its group as a whole.

  2. (2)

    This rule does not prevent the businesses forming part of the investment portfolio of the applicant from conducting trading activities themselves.

UKLR 11.2.5G

Although there is no restriction on an applicant taking a controlling stake in an investee company, to ensure a spread of investment risk an applicant should avoid:

  1. (1)

    cross-financing between the businesses forming part of its investment portfolio including, for example, through the provision of undertakings or security for borrowings by such businesses for the benefit of another; and

  2. (2)

    the operation of common treasury functions as between the applicant and investee companies.

Cross-holdings

UKLR 11.2.6R
  1. (1)

    1No more than 10%, in aggregate, of the value of the total assets of an applicant at admission may be invested in other listed closed-ended investment funds.

  2. (2)

    The restriction in (1) does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed-ended investment funds.

Feeder funds

UKLR 11.2.7R
  1. (1)

    1If an applicant principally invests its funds in another company or fund that invests in a portfolio of investments (a ‘master fund’), the applicant must ensure that:

    1. (a)

      the master fund’s investment policies are consistent with the applicant’s published investment policy and provide for spreading investment risk; and

    2. (b)

      the master fund in fact invests and manages its investments in a way that is consistent with the applicant’s published investment policy and spreads investment risk.

  2. (2)

    Paragraph (1) applies whether the applicant invests its funds in the master fund directly or indirectly through other intermediaries.

  3. (3)

    Where the applicant invests in the master fund through a chain of intermediaries between the applicant and the master fund, the applicant must ensure that each intermediary in the chain complies with paragraphs (1)(a) and (b).

Investment policy

UKLR 11.2.8R

1An applicant must have a published investment policy that contains information about the policies which the closed-ended investment fund will follow relating to asset allocation, risk diversification, and gearing, and that includes maximum exposures.

UKLR 11.2.9G

1The information in the investment policy, including quantitative information concerning the exposures mentioned in UKLR 11.2.8R, should be sufficiently precise and clear as to enable an investor to:

  1. (1)

    assess the investment opportunity;

  2. (2)

    identify how the objective of risk spreading is to be achieved; and

  3. (3)

    assess the significance of any proposed change of investment policy.

Independence

UKLR 11.2.10R

1The board of directors or equivalent body of the applicant must be able to act independently:

  1. (1)

    of any investment manager appointed to manage investments of the applicant; and

  2. (2)

    if the applicant (either directly or through other intermediaries) has an investment policy of principally investing its funds in another company or fund that invests in a portfolio of investments (a ‘master fund’), of the master fund and of any investment manager of the master fund.

UKLR 11.2.11R

1UKLR 11.2.10R(2) does not apply if the company or fund which invests its funds in another company or fund is a subsidiary undertaking of the applicant.

UKLR 11.2.12R

1For the purposes of UKLR 11.2.10R:

  1. (1)

    the chair of the board or equivalent body of the applicant must be independent; and

  2. (2)

    a majority of the board or equivalent body of the applicant must be independent (the chair may be included within that majority).

UKLR 11.2.13R

1For the purposes of UKLR 11.2.10R and UKLR 11.2.12R, the following are not independent:

  1. (1)

    directors, employees, partners, officers or professional advisers of or to:

    1. (a)

      an investment manager of the applicant;

    2. (b)

      a master fund or investment manager referred to in UKLR 11.2.10R(2); or

    3. (c)

      any other company in the same group as the investment manager of the applicant; or

  2. (2)

    (subject to UKLR 11.2.14R) directors, employees or professional advisers of or to other investment companies or funds that are:

    1. (a)

      managed by the same investment manager as the investment manager to the applicant; or

    2. (b)

      managed by any other company in the same group as the investment manager to the applicant.

UKLR 11.2.14R
  1. (1)

    1This rule applies where a closed-ended investment fund has an external AIFM which has delegated portfolio management to another investment manager who is not in the same group as the external AIFM.

  2. (2)

    Where this rule applies, the fact that a director of the closed-ended investment fund is also the director of another investment company or fund that is managed by the same external AIFM (or another company in the same group as the external AIFM) does not prevent that director from being regarded as independent for the purposes of UKLR 11.2.10R and UKLR 11.2.12R.

UKLR 11.2.15R

1A person referred to in UKLR 11.2.13R(1) or (2) who is a director of the applicant must be subject to annual re-election by the applicant’s shareholders, unless they are independent in accordance with UKLR 11.2.14R.

UKLR 11.2.16R

1The board of directors or equivalent body of the applicant must be in a position to effectively monitor and manage the performance of its key service providers, including any investment manager of the applicant.