The FSA accepts that block trading, upstairs trading and other types of specialist transactions (such as the "exchange of futures for physicals" in certain commodity markets) can have a legitimate commercial rationale consistent with the orderly conduct of business and proper protection for investors. They may therefore be permitted under the rules of a UK RIE, subject to any necessary safeguards, where appropriate.
Related provisions for PERG 8.14.38
21 - 40 of 137 items.
If BC comes within the definition of a collective investment scheme, the third element in determining whether it is an open-ended investment company is whether the 'investment condition' is satisfied. This condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme:(1) expect that he would be able to realise his investment in the scheme, within a period appearing to him to be reasonable; his investment would be represented, at any
Section 236(3) of the Act states clearly that the investment condition must be met 'in relation to BC'. In the FSA's view, this means that the investment condition should not be applied rigidly in relation to specific events such as particular issues of shares or securities or in relation to particular points in time. The requirements of the investment condition must be satisfied in relation to the overall impression of the body corporate itself, having regard to all the circ
In the FSA's view, and within limits, the investment condition allows for the possibility that a body corporate that is an open-ended investment company may issue shares or securities with different characteristics. Some shares or securities may clearly satisfy the condition whereas others may not. The FSA considers that a reasonable investor contemplating investment in such a body corporate may still take the view, looking at the body corporate overall, that the investment condition
Certain matters are to be disregarded in determining whether the investment condition is satisfied. Section 236(4) of the Act states that, for these purposes, no account is to be taken of any actual or potential redemption or repurchase of shares or securities under:(1) Chapter VII of Part V of the Companies Act 1985;or(2) Chapter VII of Part VI of the Companies (Northern Ireland) Order 1986; or(3) corresponding provisions in force in another EEA State; or(4) provisions in force
Where a sponsor has been appointed under LR 8.2 by a listed company or an applicant, a sponsor must:(1) provide assurance to the FSA when required that the responsibilities of the listed company or applicant under the listing rules have been met; and(2) guide the listed company or applicant in understanding and meeting its responsibilities under the listing rules anddisclosure rules and transparency rules.
A sponsor will be the main point of contact with the FSA for any matter where the sponsor has been appointed by a listed company or applicant. The FSA expects to discuss all issues relating to a transaction and any draft or final document directly with the sponsor. However, in appropriate circumstances, the FSA will communicate directly with the listed company or applicant.
The Treasury have made the following exemptions:(1) controllers and potential controllers of non-directive friendly societiesare exempt from the obligation to notify a change in control (The Financial Services and Markets Act 2000 (Controllers) (Exemption) Order 2001 (SI 2001/2638));(2) controllers and potential controllers of building societies are exempt from the obligation to notify a change in control unless the change involves the acquisition of a holding of a specified percentage
6The FSA recognises that firms acting as investment managers may have difficulties in complying with the prior notification requirements in sections 178(1) and 190(1)of the Act as a result of acquiring or disposing of listed shares in the course of that fund management activity. To ameliorate these difficulties, the FSA may accept pre-notification of proposed changes in control, made in accordance with SUP D, and may grant approval of such changes for a period lasting up to a
6The FSA may treat as notice given in accordance with sections 178(1) and 190(1)of the Act a written notification from a firm which contains the following statements:(1) that the firm proposes to acquire and/or dispose of control, on one or more occasions, of any UK domestic firm whose shares or those of its ultimate parent undertaking are, at the time of the acquisition or disposal of control, listed or which are admitted to listing on a designated investment exchange;:(2) that
Information may often involve:(1) listings of share and unit prices; or(2) company news or announcements; or(3) an explanation of the terms and conditions of an investment; or(4) a comparison of the benefits and risks of one investment as compared to another; or(5) league tables showing the performance of investments of a particular kind against set published criteria; or(6) details of directors’ dealings in the shares of their own companies; or(7) alerting persons to the happening
In the FSA's opinion, however, such information may take on the nature of advice if the circumstances in which it is provided give it the force of a recommendation. For example:(1) a person may offer to provide information on directors’ dealings on the basis that, in his opinion, were directors to buy or sell investors would do well to follow suit;(2) a person may offer to tell a client when certain shares reach a certain value (which would be advice if the person providing the
This chapter contains rules applicable
to a listed company that:(1) purchases its own equity shares; or(2) purchases its own securities other than equity
shares; or(3) sells or transfers treasury shares; or(4) purchases or redeems its own securities during a prohibited
period; or(5) purchases its own securities from a related
party.
The annual report and accounts must include, where applicable, the following:(1) a statement of the amount of interest capitalised by the group during the period under review with an indication of the amount and treatment of any related tax relief;(2) any information required by LR 9.2.18 R (Publication of unaudited financial information);(3) details of any small related party transaction as required by LR 11.1.10R (2)(c);(4) details of any long-term incentive schemes as required
In the case of a listed company incorporated in the United Kingdom, the following additional items must be included in its annual report and accounts:(1) a statement setting out all the beneficial and non-beneficialinterests of each director of the listed company that have been disclosed to the company under the Companies Act 1985 as at the end of the period under review including:(a) all changes in the beneficial and non-beneficialinterests of each director that have occurred
Table: Items which are eligible to contribute to the capital resources of a firm
Item |
Additional explanation |
|||
1. |
Share capital |
This must be fully paid and may include: |
||
(1) |
ordinary share capital; or |
|||
(2) |
preference share capital (excluding preference shares redeemable by shareholders within two years). |
|||
2. |
Capital other than share capital (for example, the capital of a sole trader, partnership or limited liability partnership) |
The capital of a sole trader is the net balance on the firm's capital account and current account. The capital of a partnership is the capital made up of the partners': |
||
(1) |
capital account, that is the account: |
|||
(a) |
into which capital contributed by the partners is paid; and |
|||
(b) |
from which, under the terms of the partnership agreement, an amount representing capital may be withdrawn by a partner only if: |
|||
(i) he ceases to be a partner and an equal amount is transferred to another such account by his former partners or any person replacing him as their partner; or |
||||
(ii) the partnership is otherwise dissolved or wound up; and |
||||
(2) |
current accounts according to the most recent financial statement. |
|||
For the purpose of the calculation of capital resources, in respect of a defined benefit occupational pension scheme: |
||||
(1) |
a firm must derecognise any defined benefit asset; |
|||
(2) |
a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year. |
|||
3. |
Reserves (Note 1) |
These are, subject to Note 1, the audited accumulated profits retained by the firm (after deduction of tax, dividends and proprietors' or partners' drawings) and other reserves created by appropriations of share premiums and similar realised appropriations. Reserves also include gifts of capital, for example, from a parent undertaking. |
||
For the purposes of calculating capital resources, a firm must make the following adjustments to its reserves, where appropriate: |
||||
(1) |
a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on debt instruments held in the available-for-sale financial assets category; |
|||
(2) |
a firm must deduct any unrealised gains or, where applicable, add back in any unrealised losses on cash flow hedges of financial instruments measured at cost or amortised cost; |
|||
(3) |
in respect of a defined benefit occupational pension scheme: |
|||
(a) |
a firm must derecognise any defined benefit asset; |
|||
(b) |
a firm may substitute for a defined benefit liability the firm'sdeficit reduction amount, provided that the election is applied consistently in respect of any one financial year. |
|||
4. |
Interim net profits (Note 1) |
If a firm seeks to include interim net profits in the calculation of its capital resources, the profits have, subject to Note 1, to be verified by the firm's external auditor, net of tax, anticipated dividends or proprietors' drawings and other appropriations. |
||
5. |
Revaluation reserves |
|||
6. |
General/ collective provisions (Note 1) |
These are provisions that a firm carrying on mortgage lending or mortgage administration holds against potential losses that have not yet been identified but which experience indicates are present in the firm's portfolio of assets. Such provisions must be freely available to meet these unidentified losses wherever they arise. Subject to Note 1, general/collective provisions must be verified by external auditors and disclosed in the firm's annual report and accounts. |
||
7. |
Subordinated loans |
Subordinated loans must be included in capital on the basis of the provisions in this chapter that apply to subordinated loans. |
||
Note: |
||||
1 |
Reserves must be audited and interim net profits, general and collective provisions must be verified by the firm's external auditor unless the firm is exempt from the provisions of Part VII of the Companies Act 1985 relating to the audit of accounts (section 249A (Exemptions from audit)). |
|||
Table: Items which must be deducted from capital resources
1 |
Investments in own shares |
2 |
Intangible assets (Note 1) |
3 |
Interim net losses (Note 2) |
4 |
Excess of drawings over profits for a sole trader or a partnership (Note 2) |
Notes |
Notes 1. Intangible assets are the full balance sheet value of goodwill (but not until 14 January 2008 - see transitional provision 1), capitalised development costs, brand names, trademarks and similar rights and licences. 2. The interim net losses in row 3, and the excess of drawings in row 4, are in relation to the period following the date as at which the capital resources are being computed. |
- (1)
This rule applies to a firm which:
- (a)
carries on:
- (i)
- (ii)
mortgage mediation activity (or both); and
- (b)
in relation to those activities, holds client money or other client assets;
- (a)
but is not carrying on mortgage lending or mortgage administration.
- (2)
In calculating its capital resources, the firm must exclude any amount by which the aggregate amount of its subordinated loans and its redeemable preference shares exceeds the amount calculated as follows:
four times (a - b - c); |
||
where: |
||
a |
= |
items 1 to 5 in the Table of items which are eligible to contribute to a firm's capital resources (see MIPRU 4.4.2 R) |
b |
= |
|
c |
= |
the amount of its intangible assets (but not goodwill until 14 January 2008 - see transitional provision 1). |
The following behaviours are, in the opinion of the
FSA
, market abuse (insider dealing):(1) dealing on the basis of inside information which is not trading information; (2) front running/pre-positioning - that is, a transaction for a person's own benefit, on the basis of and ahead of an order which he is to carry out with or for another (in respect of which information concerning the order is inside information), which takes advantage of the anticipated
In the opinion of the
FSA
, the following factors are to be taken into account in determining whether or not a person's behaviour is for the purpose of him gaining control of the target company or him proposing a merger with that company, and are indications that it is:(1) whether the transactions concerned are in the target company's shares; or(2) whether the transactions concerned are for the sole purpose of gaining that control or effecting that merge
The following examples of market abuse (insider dealing) concern the definition of inside information relating to financial instruments other than
commodity derivatives.(1) X, a director at B PLC has lunch with a friend, Y. X tells Y that his company has received a takeover offer that is at a premium to the current share price at which it is trading. Y enters into a spread bet priced or valued by reference to the share price of B PLC based on his expectation that
Where a listedcompany has taken a power in its constitution to impose sanctions on a shareholder who is in default in complying with a notice served under section 212 of the Companies Act 1985 (Company investigations):(1) sanctions may not take effect earlier than 14 days after service of the notice;(2) for a shareholding of less than 0.25% of the shares of a particular class (calculated exclusive of treasury shares), the only sanction the constitution may provide for is a prohibition
A listed company proposing to issue equity shares for cash or to sell treasury shares that are equity securities for cash must first offer those securities in proportion to their existing holdings to:(1) existing holders of that class of equity shares (other than the listed company itself by virtue of it holding treasury shares); and(2) holders of other equity shares of the listed company who are entitled to be offered them.
LR 9.3.11 R does not apply if:(1) a generaldisapplication of statutory pre-emption rights has been authorised by shareholders in accordance with section 95 of the Companies Act 1985 (Disapplication of pre-emption rights) and the issue of equity securities or sale of treasury shares that are equity shares by the listed company is within the terms of the authority; or(2) the listed company is undertaking a rights issue or open offer andthe disapplication of pre-emption rights is
Securities falling within the same article in Part III of the Regulated Activities Order which may be given the same generic description (for example, shares admitted to the UKofficial list) will normally be regarded as being of the same type. Options in relation to the same type of security will normally be regarded as being options of the same type.
The FSA does not need to be notified of proposals to offer (or to withdraw offers of) safeguarding and administration services for individual assets of the same type. Specified investments (other than securities) falling within the same article in Part III of the Regulated Activities Order will normally be regarded as being of the same type. Securities falling within the same article in Part III of the Regulated Activities Order which may be given the same generic description
In addition to the requirements of LR 9.8, a venture capital trust must include in its annual report and accounts:(1) a list of all investments with a value of greater than 5% of the total assets of the venture capital trust and at least the 10 largest investments stating, with respect to each investment so listed:(a) a brief description of the business;(b) the proportion of capital owned or intended to be owned;(c) the voting rights attributable to the shares owned;(d) the cost
LR 10 Annex 1 is modified as follows in relation to acquisitions or disposals of property by a listedproperty company:(1) for the purposes of paragraph 2R(1) (the gross assets test), the assets test is calculated by dividing the transaction consideration by the gross assets of the listedproperty company and paragraphs 2R(5) and 2R(6) do not apply;(2) for the purposes of paragraph 2R(1) (the gross assets test), if the transaction is an acquisition of land to be developed, the assets
(1) In addition to the tests in LR 10 Annex 1, if the transaction is an acquisition of property by a listedproperty company and any of the consideration is in the ordinary shares of that company, the listed company must determine the percentage ratios that result from the calculations under the test in paragraph(2).(2) The share capital test is calculated by dividing the number of consideration shares to be issued by the number of ordinary shares in issue (excluding treasury
In addition to the definition in LR 11.1.5 R a related party transaction includes:(1) any arrangement by which a venture capital trust takes an interest in a company in which its investment manager has invested or intends to invest on its own account, unless the investment is made either at the same time and on the same terms or in accordance with a pre-existing agreement between the venture capital trust and the investment manager; and(2) a venture capital trust that enters into