1This chapter applies to a company that has a listing of equity shares in the equity shares (commercial companies) category.

1A listed company must appoint a sponsor where it proposes to make a request to the FCA to modify, waive or substitute the operation of UKLR 8.

1A listed company must appoint a sponsor where it proposes to make a request to the FCA for individual guidance in relation to the listing rules, the disclosure requirements or the transparency rules in connection with a related party transaction.

1In UKLR, a related party transaction means:

1. (1)

   a transaction (other than a transaction in the ordinary course of business) between a listed company and a related party;

2. (2)

   an arrangement (other than an arrangement in the ordinary course of business) pursuant to which a listed company and a related party each invests in, or provides finance to, another undertaking or asset; or

3. (3)

   any other similar transaction or arrangement (other than a transaction or arrangement in the ordinary course of business) between a listed company and any other person, the purpose and effect of which is to benefit a related party.

1A reference in this chapter:

1. (1)

   to a transaction or arrangement by a listed company includes a transaction or arrangement by its subsidiary undertaking;

2. (2)

   to a transaction or arrangement is, unless the contrary intention appears, a reference to the entering into of the agreement for the transaction or the entering into of the arrangement; and

3. (3)

   to a transaction or arrangement includes a transaction or arrangement which amends or revises the terms of an existing transaction or arrangement.

1 UKLR 8.2.1R to UKLR 8.2.5R do not apply to a related party transaction if it is a transaction or arrangement:

1. (1)

   of a kind referred to in paragraph 1 of UKLR 8 Annex 1 (a transaction the terms of which were agreed before a person became a related party); or

2. (2)

   of a kind referred to in paragraphs 2 to 8 of UKLR 8 Annex 1 and does not have any unusual features.

1In UKLR, a related party means:

1. (1)

   a person who is (or was within the 12 months before the date of the transaction or arrangement) a substantial shareholder;

2. (2)

   a person who is (or was within the 12 months before the date of the transaction or arrangement) a director or shadow director of:

   1. (a)

      the listed company; or

   2. (b)

      any other company which is one of the following (and, if that person has ceased to a director or shadow director, any other company which was one of the following while that person was a director or shadow director of such other company);

      1. (i)

         a subsidiary undertaking of the listed company;

      2. (ii)

         a parent undertaking of the listed company; or

      3. (iii)

         a fellow subsidiary undertaking of a parent undertaking of the listed company;

3. (3)

   a person exercising significant influence; or

4. (4)

   an associate of a related party referred to in paragraph (1), (2) or (3).

1In UKLR, a substantial shareholder means any person who is entitled to exercise, or to control the exercise of, 20% or more of the votes able to be cast on all or substantially all matters at general meetings of:

1. (1)

   the company; or

2. (2)

   any company which is:

   1. (a)

      a subsidiary undertaking of the company;

   2. (b)

      a parent undertaking of the company; or

   3. (c)

      a fellow subsidiary undertaking of a parent undertaking of the company.

1For the purposes of calculating voting rights in UKLR 8.1.12R, the following voting rights are to be disregarded:

1. (1)

   any voting rights which such a person exercises (or controls the exercise of) independently in its capacity as:

   1. (a)

      bare trustee;

   2. (b)

      investment manager;

   3. (c)

      collective investment undertaking; or

   4. (d)

      a long-term insurer in respect of its linked long-term business,

      if no associate of that person interferes by giving direct or indirect instructions, or in any other way, in the exercise of such voting rights (except to the extent any such person confers or collaborates with such an associate which also acts in its capacity as investment manager, collective investment undertaking or long-term insurer); or

2. (2)

   any voting rights:

   1. (a)

      which a person may hold (or control the exercise of) solely in relation to the direct performance, by way of business, of:

      1. (i)

         underwriting the issue or sale of securities;

      2. (ii)

         placing securities, where the person provides a firm commitment to acquire any securities which it does not place; or

      3. (iii)

         acquiring securities from existing shareholders or the issuer pursuant to an agreement to procure third-party purchases of securities; and

   2. (b)

      where the conditions in (i) to (iv) are satisfied:

      1. (i)

         the activities set out in (2)(a) are performed in the ordinary course of business;

      2. (ii)

         the securities to which the voting rights attach are held for a consecutive period of 5 trading days or less, beginning with the first trading day on which the securities are held;

      3. (iii)

         the voting rights are not exercised within the period in which the securities are held; and

      4. (iv)

         no attempt is made directly or indirectly by the firm to intervene in or exert influence on (or attempt to intervene in or exert influence on) the management of the issuer within the period the securities are held.

1For the purposes of this chapter, a transaction in the ordinary course of business excludes a reverse takeover.

1If a listed company enters into a related party transaction where any percentage ratio is 5% or more, the listed company must:

1. (1)

   obtain the approval of its board for the transaction or arrangement before it is entered into;

2. (2)

   ensure that any director who is, or an associate of whom is, the related party, or who is a director of the related party, does not take part in the board’s consideration of the transaction or arrangement and does not vote on the relevant board resolution;

3. (3)

   before entering into the transaction or arrangement, obtain written confirmation from a sponsor that the terms of the proposed transaction or arrangement with the related party are fair and reasonable as far as the security holders of the listed company are concerned; and

4. (4)

   notify a RIS as soon as possible after the terms of the transaction or arrangement are agreed.

1The notification must include:

1. (1)

   details of the related party transaction, including:

   1. (a)

      the name of the related party;

   2. (b)

      the value of the consideration for the transaction or arrangement; and

   3. (c)

      a description of the transaction or arrangement;

2. (2)

   the fact that the transaction or arrangement is a related party transaction which fell within UKLR 8.2.1R;

3. (3)

   details of the nature and extent of the related party’s interest in the transaction(s) or arrangement(s);

4. (4)

   a statement by the board that the transaction or arrangement is fair and reasonable as far as the security holders of the company are concerned and that the directors have been so advised by a sponsor; and

5. (5)

   the name of the sponsor that provided the written confirmation in UKLR 8.2.1R(3).

1The notification must also include any further information the company considers relevant, having regard to the purpose of this chapter set out in UKLR 8.1.2G.

1If, before the completion of a related party transaction referred to in UKLR 8.2.1R that has been notified in accordance with this section, there is a material change to the terms of the transaction, the listed company must comply again separately with UKLR 8.2.1R to UKLR 8.2.3R in relation to the transaction.

1. (1)

   1Subject to (3), if a listed company enters into transactions or arrangements with the same related party (and any of its associates) in any 12-month period, the transactions or arrangements must be aggregated.

2. (2)

   If any percentage ratio is 5% or more for the aggregated transactions or arrangements, the listed company:

   1. (a)

      must comply with UKLR 8.2.1R, in respect of the latest transaction or arrangement; and

   2. (b)

      the notification required by UKLR 8.2.1R(4) must include:

      1. (i)

         all of the information required by UKLR 8.2.2R for the latest transaction or arrangement;

      2. (ii)

         the information required in UKLR 8.2.2R(1) to (3) for the other aggregated transactions or arrangements; and

      3. (iii)

         the information required by UKLR 8.2.3R.

3. (3)

   Transactions or arrangements completed during the 12-month period in (1) are not required to be aggregated with the latest transaction or arrangement if they were previously classified as a related party transaction notifiable (individually or collectively) under UKLR 8.2.1R or UKLR 8.2.7R(2).

1. (1)

   A listed company must notify a RIS as soon as possible if, after the notification under UKLR 8.2.1R(4), it becomes aware that:

   1. (a)

      there has been a material change affecting any matter contained in that earlier notification (other than a material change to the terms of the transaction to which UKLR 8.2.5R applies); or

   2. (b)

      a material new matter has arisen which would have been required to be mentioned in that earlier notification if it had arisen at the time of the preparation of that notification.

2. (2)

   The supplementary notification must:

   1. (a)

      give details of the change or new matter; and

   2. (b)

      contain a statement that, except as disclosed:

      1. (i)

         there has been no material change affecting any matter contained in the earlier notification; and

      2. (ii)

         no other material new matter has arisen which would have been required to be mentioned in that earlier notification if it had arisen at the time of the preparation of that notification.

3. (3)

   In paragraphs (1) and (2), ‘material’ means material for the purpose of making an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the listed company and the rights attaching to any securities forming part of the consideration.

1In the case of a related party which is a sovereign controlling shareholder or an associate of a sovereign controlling shareholder, where:

1. (1)

   a listed company is a sovereign controlled commercial company and:

   1. (a)

      has a sovereign controlling shareholder which was a controlling shareholder on the first occasion on which the company made an application for the admission of equity shares to the equity shares (commercial companies) category;

   2. (b)

      has made a notification in accordance with UKLR 6.4.18R and UKLR 6.4.19R; or

   3. (c)

      made an announcement in accordance with UKLR 21.5.6.R(2) and UKLR 21.5.9R when it transferred the listing of its equity shares to the equity shares (commercial companies) category; and

2. (2)

   the sovereign controlling shareholder is either:

   1. (a)

      recognised by the government of the UK as a State; or

   2. (b)

      the UK,

   UKLR 8.2.1R(2) and (3) and UKLR 8.2.2R(4) and (5) do not apply.