Related provisions for SUP 15.3.16
In determining whether a UK RIE is ensuring that business conducted by means of its facilities is conducted in an orderly manner (and so as to afford proper protection to investors), the FSA may have regard to whether the UK RIE's arrangements and practices:
- (1)
enable members and clients for whom they act to obtain the best price available at the time for their size and type of trade;
- (2)
ensure:
- (a)
sufficient pre-trade transparency in the UK RIE's markets taking account of the practices in those markets and the trading systems used; and
- (b)
sufficient post-trade transparency in the UK RIE's markets taking into account the nature and liquidity of the specified investments traded, market conditions and the scale of transactions, the need (where appropriate) to preserve anonymity for members and clients for whom they act, and the needs of different market participants for timely price information;
- (a)
- (3)
include procedures which enable the UK RIE to influence trading conditions or suspend trading promptly when necessary to maintain an orderly market; and
- (4)
if they include arrangements to support or encourage liquidity:
- (a)
are transparent;
- (b)
are not likely to encourage any person to enter into transactions other than for proper trading purposes (which may include hedging, investment, speculation, price determination, arbitrage and filling orders from any client for whom he acts);
- (c)
are consistent with a reliable, undistorted price-formation process; and
- (d)
alleviate dealing or other identified costs associated with trading on the UK RIE's markets and do not subsidise a market position of a user of its facilities or subsidise any margin payments (or the provision of collateral) which such a user would have to make.
- (a)
Articles 3 to 23 of the PD Regulation provide for the minimum information to be included in a prospectus:
Note: the Annexes (including schedules and building blocks) referred to in these articles are set out for information in PR App 3.
Article 3 Minimum information to be included in a prospectus |
A prospectus shall be drawn up by using one or a combination of the following schedules and building blocks set out in Articles 4 to 20, according to the combinations for various types of securities provided for in Article 21. |
A prospectus shall contain the information items required in Annexes I to XVII depending on the type of issuer and securities involved, provided for in the schedules and building blocks set out in Articles 4 to 20. A competent authority shall not request that a prospectus contains information items which are not included in Annexes I to XVII. |
In order to ensure conformity with the obligation referred to in [section 87A(2) of the Act], the [FSA], when approving a prospectus in accordance with [section 87A of the Act], may require that the information provided by the issuer, the offeror or the person asking for admission to trading on a regulated market be completed, for each of the information items, on a case by case basis. |
Article 4 Share registration document schedule |
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1. |
For the share registration document information shall be given in accordance with the schedule set out in Annex I. |
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2. |
The schedule set out in paragraph 1 shall apply to the following: |
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(1) |
shares and other transferable securities equivalent to shares; |
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(2) |
other securities which comply with the following conditions: |
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(a) |
they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuer’s or at the investor’s discretion, or on the basis of the conditions established at the moment of the issue, or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares, and |
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(b) |
provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security and are not yet traded on a regulated market or an equivalent market outside the Community at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement. |
Recital 9 |
Pro forma financial information is needed in case of significant gross change, i. e. a variation of more than 25% relative to one or more indicators of the size of the issuer's business, in the situation of an issuer due to a particular transaction, with the exception of those situations where merger accounting is required. |
Article 5 Pro-forma financial information building block |
For pro-forma financial information, information shall be given in accordance with the building block set out in Annex II. |
Pro forma financial information should be preceded by an introductory explanatory paragraph that states in clear terms the purpose of including this information in the prospectus. |
Article 6 Share securities note schedule |
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1. |
For the share securities note information is necessary to be given in accordance with the schedule set out in Annex III. |
2. |
The schedule shall apply to shares and other transferable securities equivalent to shares |
Article 7 Debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 50 000 |
For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of less than EUR 50 000or, where there is no individual denomination, securities that can only be acquired on issue for less than EUR 50 000per security, information shall be given in accordance with the schedule set out in Annex IV. |
Article 8 Securities note schedule for debt securities with a denomination per unit of less than EUR 50 000 |
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1. |
For the securities note for debt securities with a denomination per unit of less than EUR 50 000information shall be given in accordance with the schedule set out in Annex V. |
2. |
The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100% of the nominal value in addition to which there may be also an interest payment. |
Article 9 Guarantees building block |
For guarantees information shall be given in accordance with the building block set out in Annex VI. |
Article 10 Asset backed securities registration document schedule |
For the asset backed securities registration document information shall be given in accordance with the schedule set out in Annex VII. |
Article 11 Asset backed securities building block |
For the additional information building block to the securities note for asset backed securities information shall be given in accordance with the building block set out in Annex VIII. |
Article 12 Debt and derivative securities registration document schedule for securities with a denomination per unit of at least EUR 50 000 |
For the debt and derivative securities registration document concerning securities which are not covered in Article 4 with a denomination per unit of at least EUR 50 000or, where there is no individual denomination, securities that can only be acquired on issue for at least EUR 50 000per security, information shall be given in accordance with the schedule set out in Annex IX. |
Article 13 Depository receipts schedule |
For depository receipts issued over shares information shall be given in accordance with the schedule set out in Annex X. |
Article 14 Banks registration document schedule |
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1. |
For the banks registration document for debt and derivative securities and those securities which are not covered by article 4 information shall be given in accordance with the schedule set out in Annex XI. |
2. |
The schedule set out in paragraph 1 shall apply to credit institutions as defined in point (a) of Article 1(1) of Directive 2000/12/EC as well as to third country credit institutions which do not fall under that definition but have their registered office in a state which is a member of the OECD. |
These entities may also use alternatively the registration document schedules provided for under in Articles 7 and 12. |
Article 15 Securities note schedule for derivative securities |
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1. |
For the securities note for derivative securities information shall be given in accordance with the schedule set out in Annex XII. |
2. |
The schedule shall apply to securities which are not in the scope of application of the other securities note schedules referred to in Articles 6, 8 and 16, including certain securities where the payment and/or delivery obligations are linked to an underlying. |
Article 16 Securities note schedule for debt securities with a denomination per unit of at least EUR 50,000 |
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1. |
For the securities note for debt securities with a denomination per unit of at least EUR 50 000information shall be given in accordance with the schedule set out in Annex XIII. |
2. |
The schedule shall apply to debt where the issuer has an obligation arising on issue to pay the investor 100% of the nominal value in addition to which there may be also an interest payment. |
Article 17 Additional information building block on the underlying share |
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1. |
For the additional information on the underlying share, the description of the underlying share shall be given in accordance with the building block set out in Annex XIV. |
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In addition, if the issuer of the underlying share is an entity belonging to the same group, the information required by the schedule referred to in Article 4 shall be given in respect of that issuer. |
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2. |
The additional information referred to in the first subparagraph of paragraph 1 shall only apply to those securities which comply with both of the following conditions: |
|
(1) |
they can be converted or exchanged into shares or other transferable securities equivalent to shares, at the issuer’s or at the investor’s discretion, or on the basis of the conditions established at the moment of the issue or give, in any other way, the possibility to acquire shares or other transferable securities equivalent to shares; and |
|
(2) |
provided that these shares or other transferable securities equivalent to shares are or will be issued by the issuer of the security or by an entity belonging to the group of that issuer and are not yet traded on a regulated market or an equivalent market outside the Community at the time of the approval of the prospectus covering the securities, and that the underlying shares or other transferable securities equivalent to shares can be delivered with physical settlement. |
Article 18 Registration document schedule for collective investment undertakings of the closed-end type |
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1. |
In addition to the information required pursuant to items 1, 2, 3, 4, 5.1, 7, 9.1, 9.2.1, 9.2.3, 10.4, 13, 14, 15, 16, 17.2, 18, 19, 20, 21, 22, 23, 24, 25 of Annex I, for the registration document for securities issued by collective investment undertakings of the closed-end type information shall be given in accordance with the schedule set out in Annex XV. |
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2. |
The schedule shall apply to collective investment undertakings of the closed-end type holding a portfolio of assets on behalf of investors that: |
|
(1) |
are recognised by national law in the Member State in which it is incorporated as a collective investment undertaking of the closed end type; or |
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(2) |
do not take or seek to take legal or management control of any of the issuers of its underlying investments. In such a case, legal control and/or participation in the administrative, management or supervisory bodies of the underlying issuer(s) may be taken where such action is incidental to the primary investment objective, necessary for the protection of shareholders and only in circumstances where the collective investment undertaking will not exercise significant management control over the operations of that underlying issuer(s). |
Article 19 Registration document schedule for Member States, third countries and their regional and local authorities |
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1. |
For the registration document for securities issued by Member States, third countries and their regional and local authorities information shall be given in accordance with the schedule set out in Annex XVI. |
2. |
The schedule shall apply to all types of securities issued by Member States, third countries and their regional and local authorities. |
Article 20 Registration document schedule for public international bodies and for issuers of debt securities guaranteed by a member state of the OECD |
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1. |
For the registration document for securities issued by public international bodies and for securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is a member of the OECD information shall be given in accordance with the schedule set out in Annex XVII. |
2. |
The schedule shall apply to: |
- all types of securities issued by public international bodies; - to debt securities unconditionally and irrevocably guaranteed, on the basis of national legislation, by a state which is a member of the OECD. |
Article 21 Combination of schedules and building blocks |
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1. |
The use of the combinations provided for in the table set out in Annex XVIII shall be mandatory when drawing up prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used. |
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2. |
The most comprehensive and stringent registration document schedule, i.e. the most demanding schedule in term of number of information items and the extent of the information included in them, may always be used to issue securities for which a less comprehensive and stringent registration document schedule is provided for, according to the following ranking of schedules: |
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(1) |
share registration document schedule; |
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(2) |
debt and derivative securities registration document schedule for securities with a denomination per unit of less than EUR 50 000; |
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(3) |
debt and derivative securities registration document schedule for securities with a denomination per unit at least EUR 50 000. |
Article 22 Minimum information to be included in a base prospectus and its related final terms |
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1. |
A base prospectus shall be drawn up by using one or a combination of schedules and building blocks provided for in Articles 4 to 20 according to the combinations for various types of securities set out in Annex XVIII. |
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A base prospectus shall contain the information items required in Annexes I to XVII depending on the type of issuer and securities involved, provided for in the schedules and building blocks set out in Articles 4 to 20. A competent authority shall not request that a base prospectus contains information items which are not included in Annexes I to XVII. |
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In order to ensure conformity with the obligation referred to in [section 87A(2) of the Act], the [FSA], when approving a base prospectus in accordance with [section 87A of the Act], may require that the information provided by the issuer, the offeror or the person asking for admission to trading on a regulated market be completed, for each of the information items, on a case by case basis. |
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2. |
The issuer, the offeror or the person asking for admission to trading on a regulated market may omit information items which are not known when the base prospectus is approved and which can only be determined at the time of the individual issue. |
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3. |
The use of the combinations provided for in the table in Annex XVIII shall be mandatory when drawing up base prospectuses for the types of securities to which those combinations correspond according to this table. However, for securities not covered by those combinations further combinations may be used. |
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4. |
The final terms attached to a base prospectus shall only contain the information items from the various securities note schedules according to which the base prospectus is drawn up. |
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5. |
In addition to the information items set out in the schedules and building blocks referred to in Articles 4 to 20 the following information shall be included in a base prospectus: |
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(1) |
indication on the information that will be included in the final terms; |
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(2) |
the method of publication of the final terms; if the issuer is not in a position to determine, at the time of the approval of the prospectus, the method of publication of the final terms, an indication of how the public will be informed about which method will be used for the publication of the final terms; |
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(3) |
in the case of issues of non equity securities according to [PR 2.2.7R (1)], a general description of the programme. |
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6. |
Only the following categories of securities may be contained in a base prospectus and its related final terms covering issues of various types of securities: |
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(1) |
asset backed securities; |
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(2) |
warrants falling under Article 17; |
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(3) |
non-equity securities provided for under [PR 2.2.7R (2)]; |
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(4) |
all other non-equity securities including warrants with the exception of those mentioned in point (2). |
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In drawing up a base prospectus the issuer, the offeror or the person asking for admission to trading on a regulated market shall clearly segregate the specific information on each of the different securities included in these categories. |
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7. |
Where an event envisaged under [section 87G(1) of the Act (Supplementary prospectus)] occurs between the time that the base prospectus has been approved and the final closing of the offer of each issue of securities under the base prospectus or, as the case may be, the time that trading on a regulated market of those securities begins, the issuer, the offeror or the person asking for admission to trading on a regulated market shall publish a supplement prior to the final closing of the offer or the admission of those securities to trading. |
Article 23 Adaptations to the minimum information given in prospectuses and base prospectuses |
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1. |
Notwithstanding Articles 3 second paragraph and 22(1) second subparagraph, where the issuer’s activities fall under one of the categories included in Annex XIX, the [FSA], taking into consideration the specific nature of the activities involved, may ask for adapted information, in addition to the information items included in the schedules and building blocks set out in 4 to 20, including, where appropriate, a valuation or other expert’s report on the assets of the issuer, in order to comply with the obligation referred to in [sections 87A(2),(3) and (4) of the Act]. The [FSA] shall forthwith inform the Commission thereof. |
In order to obtain the inclusion of a new category in Annex XIX a Member State shall notify its request to the Commission. The Commission shall update this list following the Committee procedure provided for in Article 24 of [the prospectus directive]. |
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2. |
By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a security which is not the same but comparable to the various types of securities mentioned in the table of combinations set out in Annex XVIII, the issuer, the offeror or the person asking for admission to trading on a regulated market shall add the relevant information items from another securities note schedule provided for in Articles 4 to 20 to the main securities note schedule chosen. This addition shall be done in accordance with the main characteristics of the securities being offered to the public or admitted to trading on a regulated market. |
3. |
By way of derogation of Articles 3 to 22, where an issuer, an offeror or a person asking for admission to trading on a regulated market applies for approval of a prospectus or a base prospectus for a new type of security, the issuer, the offeror or the person asking for admission to trading on a regulated market shall notify a draft prospectus or base prospectus to the [FSA]. |
The [FSA] shall decide, in consultation with the issuer, the offeror or the person asking for admission to trading on a regulated market, what information shall be included in the prospectus or base prospectus in order to comply with the obligation referred to in [sections 87A(2),(3) and (4) of the Act]. The [FSA] shall forthwith inform the Commission thereof. |
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The derogation referred to in the first subparagraph shall only apply in case of a new type of security which has features completely different from the various types of securities mentioned in Annex XVIII, if the characteristics of this new security are such that a combination of the different information items referred to in the schedules and building blocks provided for in Articles 4 to 20 is not pertinent. |
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4. |
By way of derogation of Articles 3 to 22, in the cases where one of the information items required in one of the schedules or building blocks referred to in 4 to 20 or equivalent information is not pertinent to the issuer, to the offer or to the securities to which the prospectus relates, that information may be omitted. |
Information and supporting documentation (see REC 5.2.4 G).
(1) |
Details of the applicant's constitution, structure and ownership, including its memorandum and articles of association (or similar or analogous documents ) and any agreements between the applicant, its owners or other persons relating to its constitution or governance. |
(2) |
Details of all business to be conducted by the applicant, whether or not a regulated activity. |
(3) |
Details of the facilities which the applicant plans to operate, including details of the trading platform, settlement arrangements, clearing services and custody services which it plans to supply. |
(4) |
Copies of the last three annual reports and accounts and, for the current financial year, quarterly management accounts. |
(5) |
Details of its business plan for the first three years of operation as a UK recognised body. |
(6) |
A full organisation chart and a list of the posts to be held by key individuals (with details of the duties and responsibilities) and the names of the persons proposed for these appointments when these names are available. |
(7) |
Details of its auditors, bankers, solicitors and any persons providing corporate finance advice or similar services (such as reporting accountants) to the applicant. |
(8) |
Details of any relevant functions to be outsourced or delegated, with copies of relevant agreements. |
(9) |
Details of information technology systems and of arrangements for their supply, management, maintenance and upgrading, and security. |
(10) |
Details of all plans to minimise disruption to operation of its facilities in the event of the failure of its information technology systems. |
(11) |
Details of internal systems for financial control, arrangements for risk management and insurance arrangements to cover operational and other risks. |
(12) |
Details of its arrangements for managing any counterparty risks, including details of margining systems, guarantee funds and insurance arrangements. |
(13) |
Details of internal arrangements to safeguard confidential or privileged information and for handling conflicts of interest. |
(14) |
Details of arrangements for complying with the notification rules and other requirements to supply information to the FSA. |
(15) |
Details of the arrangements to be made for monitoring and enforcing compliance with its rules and with its clearing, settlement and default arrangements. |
(16) |
A summary of the legal due diligence carried out in relation to ascertaining the enforceability of its rules (including default rules)and arrangements for margin against any of its members based outside the United Kingdom, and the results and conclusions reached. |
(17) |
Details of the procedures to be followed for declaring a member in default, and for taking action after that event to close out positions, protect the interests of other members and enforce its default rules. |
(18) |
Details of membership selection criteria, rules and procedures. |
(19) |
Details of arrangements for recording transactions effected by, or cleared through, its facilities. |
(20) |
Details of arrangements for detecting financial crime and market abuse , including arrangements for complying with money laundering law. |
(21) |
Details of criteria, rules and arrangements for selecting specified investments to be admitted to trading on (or cleared by) an RIE, or to be cleared by an RCH and, where relevant, details of how information regarding specified investments will be disseminated to users of its facilities. |
(22) |
Details of arrangements for cooperating with the FSA and other appropriate authorities, including draft memoranda of understanding or letters. |
(23) |
Details of the procedures and arrangements for making and amending rules, including arrangements for consulting on rule changes. |
(24) |
Details of disciplinary and appeal procedures, and of the arrangements for investigating complaints. |