Essential Corporate News – Week ending 3 May 2024

FCA: Primary Market Bulletin No.48

On 26 April 2024, the Financial Conduct Authority (FCA) published Primary Market Bulletin No.48 (PMB 48) to consult, among other things, on changes the FCA proposes to make to guidance in its Knowledge Base. 

In PMB 48, the FCA does the following:

• Consults on proposed changes to guidance in its Knowledge Base in light of the listing regime reforms discussed in CP 23/31. For these purposes, the FCA has assumed the draft rules will be implemented as proposed – should the rules be amended following the review of feedback to CP 23/31, it will re-consult on the Knowledge Base changes accordingly.
• Publishes a draft of the new Systems and Controls Confirmation Form issuers would need to submit at admission.
• Indicates that it intends to send out notifications to issuers from mid-May informing them of the listing category it expects their securities to be mapped to under the new regime. Issuers that believe they have been incorrectly mapped will have four weeks to revert to the FCA.
• Finalises amendments to three Technical Notes regarding sponsor competence, including to reflect changes to LR8 that were finalised in Handbook Notice 118.

The deadline for responding on the matters being consulted on in PMB 48 is 26 May 2024.

Proposed Knowledge Base changes: General

Given the scale of the changes proposed to the listing regime, the FCA is taking a phased approach to consulting on corresponding changes to the Knowledge Base. In PMB 48, as part of the first tranche of amendments, it is focusing on those existing Technical Notes it considers to be the most essential in supporting the understanding of the new rules or to be the most frequently used by market participants. In this context it is consulting on changes to eleven Technical Notes and the deletion of a further nine. See also below in relation to sponsor-related materials.

The FCA intends to consult on further Knowledge Base changes in future editions of PMB but notes that, as a result of the phased approach it is taking, some amendments will not be consulted on until after the implementation of the new rules. Once the new rules have come into force the FCA will, pending these further updates, expect market participants to interpret references to the Listing Rules purposively.

Proposed Knowledge Base changes: Sponsor-related

PMB 48 includes a consultation on amendments to thirteen existing sponsor-related Technical Notes and the addition of a new Technical Note relating to the sponsor confirmation on a modified transfer of listing category under proposed transitional provisions in relation to the revised Listing Rules.

• The FCA also plans to consult on further new Technical Notes relating to sponsors before the revised regime comes into force, with areas to be covered including:
• The FCA’s approach to sponsor reviews and its expectations of sponsor firms when receiving feedback.
• Expectations of the expertise of sponsors, in particular in relation to areas of specialism outside the Listing Rules, Prospectus Regulation, Disclosure Guidance and Transparency Rules.
• Sponsor record keeping. 

Draft Systems and Controls Confirmation Form

In CP23/31 the FCA proposed (as part of the application for listing process) that an applicant’s board would have to provide confirmation as to appropriate systems and controls for compliance with the company’s ongoing obligations and the Listing Principles following admission. PMB 48 includes a draft of this form. The FCA notes that it is not formally consulting on the content of the form but is happy to receive feedback.

(FCA, Primary Market Bulletin No.48, 26.04.2024)

Takeover Panel: Amendments to Practice Statement 31

On 30 April 2024 the UK Takeover Panel (Panel) published a revised version of Practice Statement 31 (Formal sale processes, private sale processes, strategic reviews and public searches for potential offerors) (PS31).

As outlined in Panel Statement 2024/12, amended PS31 reflects a new practice that has been adopted by the Panel in relation to the identification of potential offerors in the context of formal sales processes. More generally, it has also been reviewed and restructured and describes in more detail the different types of sale processes and the Panel’s approach to these. Further details of the amendments can be found here. 

(Takeover Panel, Amendments to Practice Statement 31, 2024/12, 30.04.2024)