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UKLR 13.1 Application

UKLR 13.1.1R

1This chapter applies to a shell company with, or applying for, a listing of equity shares in the equity shares (shell companies) category. It does not apply to securities of:

  1. (1)

    a closed-ended investment fund;

  2. (2)

    an open-ended investment company; or

  3. (3)

    an investment entity that is not a closed-ended investment fund or an open ended-investment company.

Meaning of ‘shell company’

UKLR 13.1.2R

A shell company is an issuer whose:

  1. (1)

    assets consist solely or predominantly of cash or short-dated securities; or

  2. (2)

    predominant purpose or objective is to undertake an acquisition or merger, or a series of acquisitions or mergers.

UKLR 13.1.3G

An issuer should consider the guidance in UKLR 21.2.5G and contact the FCA as soon as possible if at any time an issuer no longer meets the definition of a shell company as a result of completing an initial transaction to request a cancellation of listing.

Meaning of ‘founding shareholder’, ‘public shareholder’ and ‘shell company sponsor’

UKLR 13.1.4R

For shell companies that fall within UKLR 13.1.2R(2):

  1. (1)

    ‘founding shareholder’ means a shareholder who founded or established a shell company;

  2. (2)

    ‘public shareholder’ means a shareholder who is not a founding shareholder, a shell company sponsor or a director; and

  3. (3)

    ‘shell company sponsor’ means a person who provides any of the following to a shell company:

    1. (a)

      capital or other finance to support the operating costs of the shell company;

    2. (b)

      financial, advisory, consultancy or legal services;

    3. (c)

      facilities or support services; or

    4. (d)

      any other material contribution to the establishment and ongoing operation of the shell company.

When a sponsor must be appointed

UKLR 13.1.5G

An issuer should consider its obligation to appoint a sponsor under UKLR 4.2.1R and the requirement to obtain a sponsor’s guidance under UKLR 4.2.6R.

UKLR 13.1.6G

An issuer should consider its obligation to appoint a sponsor under UKLR 4.2.2R(2), (6) and (9) where it is applying to transfer its category of listing to the equity shares (shell companies) category from one of the following listing categories:

  1. (1)

    the equity shares (commercial companies) category;

  2. (2)

    the equity shares (international commercial companies secondary listing) category; or

  3. (3)

    the equity shares (transition) category.

UKLR 13.1.7G

An issuer should consider the obligations to contact the FCA, through its sponsor, under UKLR 13.2.2G (relating to transfer of listing category), UKLR 13.4.4R (Requirement for a suspension), UKLR 13.4.21R (relating to where the shell company no longer satisfies the conditions for which a suspension is not required) and UKLR 13.4.24R (Cancellation of listing).