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Listing Rules

Overview

The UKLA Listing Rules (link to FCA handbook) set out some of the rules applicable to a company that is listed (or seeking admission to listing) on the London Stock Exchange. In the case of most listed securities these will supplement the Disclosure Guidance and Transparency Rules and Prospectus Rules (link to FCA handbook). They do not apply to AIM or High Growth Segment companies.

The listing regime sets out two listing segments – premium and standard. Companies with a premium listing are subject to more stringent requirements, while those with a standard listing follow the minimum standards set out in the UK provisions which implemented the EU Consolidated Admissions and Reporting Directive (CARD) and the EU Transparency Directive. These remain in place after the UK’s exit from the EU as EU-derived domestic law.

All companies with a premium listing, regardless of where they are incorporated, are required to apply the Listing Rules relating to corporate governance. Companies with only a standard listing of securities (which includes debt securities, convertibles, preference shares and certificates representing securities (i.e. depositary receipts)) are not required to apply the Listing Rules relating to corporate governance. They may, however, be required to provide certain disclosures under the Disclosure Guidance and Transparency Rules  in respect of audit committees and the main features of the system of internal control and risk management systems relating to financial reporting.

Annual Reports

For all companies with listed shares, and those with a retail listing of debt, the rules on financial statements are set out in the Disclosure Guidance and Transparency Rules. Annual reports are required within four months of the year end and (see relaxation as a result of COVID-19), for a company admitted to trading on a UK regulated market, consolidated accounts must be prepared in accordance with IFRS. For periods commencing prior to 1 January 2021, this should be IFRS as adopted by the EU. For periods commencing on or after 1 January 2021, this changes to IFRS as adopted by the UK.

For issuers with a wholesale listing of debt, or debt listed on the Professional Securities Market, the rules on financial statements are set out in Listing Rule 17.3 (link to FCA Handbook). The main difference between the rules applying to the majority of listed companies, and those applying LR 17.3 are that the deadline for publication of the annual report is six months (rather than four).

For entities with a premium listing of shares, there are additional rules regarding the annual report contents set out in Listing Rule 9.8 and, for closed-ended investment funds (e.g. UK investment trusts), Listing Rule 15.6 (both links to FCA Handbook).  The FCA has recently introduced a new Listing Rule to enhance climate-related financial disclosures effective for accounting periods beginning on or after 1 January 2021.

There are also corporate governance requirements set out in the Disclosure Guidance and Transparency Rules, supplemented by the requirements for a premium listed company to report their compliance with the UK Corporate Governance Code set out in LR 9.8. 

The FCA has recently issued a consultation on changing LR 9.8.6R to require, as an ongoing listing obligation, UK and overseas issuers with equity shares, or certificates representing equity shares, admitted to the premium or standard segment of the FCA's Official List, to publish annually in their annual financial report: 

  • a ‘comply or explain statement’ on whether they have achieved certain targets for gender and ethnic minority representation on their boards; and
  • data on the composition of the board and most senior level of executive management in terms of gender and ethnicity.

Preliminary announcements

Since 2007, preliminary announcements have not been mandatory. However, if a premium listed company issues a preliminary announcement, it must comply with Listing Rule 9.7A (link to FCA Handbook). There are no preliminary announcement rules for other types of listing.

All listed companies must disseminate their annual results in accordance with DTR 6.3.5 (link to FCA Handbook); typically for those that have issued a preliminary announcement this would be a ‘top-up’ announcement referring to the earlier preliminary announcement and containing any additional information required.

Interim reports

The requirements for interim reports and interim management statements are set out in the Disclosure Guidance and Transparency Rules, and hence do not apply to companies with debt on the Professional Securities Market.

Becoming listed

For a regulated market, the requirements are set out in the UKLA Prospectus Rules (link to FCA Handbook). In the case of a company seeking a premium listing of equity shares, there are additional requirements in Listing Rule 6 (link to FCA Handbook).  For the Professional Securities Market (which is listed but unregulated) the requirements for listing particulars are set out in Listing Rule 4 (link to FCA Handbook).

Class 1 transactions

The other type of financial reporting that can arise is where a premium listed company wishes to make a substantial acquisition or disposal. Where the entity being acquired or disposed of constitutes more than 25% of an entity’s gross assets, profits or gross capital, or the consideration exceeds 25% of the entity’s market capitalisation, a circular will be required for shareholder approval which contains financial information on the company. Details of the Class tests Annex can be found in Listing Rule 10 and the requirements for financial information in circulars are covered in Listing Rule 13.5 (both links to FCA Handbook).

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.