From the introduction to the consultation paper:
From the introduction to the consultation paper:
The Institute of Chartered Accountants in England and Wales published a new technical guidance note (Tech 01/13CFF) in March 2013 (with an effective implementation date of 1 September 2013) giving “Guidance on financial position and prospects procedures” on London IPOs.
“ICAEW has published guidance that addresses a regulatory requirement of companies seeking a listing (or admission to trading) on a UK market.
Directors of a company that is seeking a Premium Listing of its shares on the Main Market of the London Stock Exchange have a regulatory obligation to have established procedures that provide a reasonable basis for them to make proper judgements on an ongoing basis about the company’s financial position and prospects. There are also regulatory requirements regarding financial position and prospects (FPP) procedures for companies seeking an admission to trading on AIM or the ISDX Growth Market. A reporting accountant will usually be requested to perform services in this regard.
Technical Release TECH 01/13CFF was published following a consultation launched in June 2010 and an exposure draft published in March 2012. TECH 01/13CFF is aimed at:
- directors of companies preparing for an IPO, explaining how they can demonstrate that they have established FPP procedures to address relevant objectives and;
- reporting accountants undertaking an assurance engagement to address relevant objectives and providing an assurance report in relation to FPP procedures established by directors.
TECH 01/13CFF replaces the guidance in FRAG 10/95 The London Stock Exchange Listing Rules paragraphs 2.11 and 2.8. It should be implemented by 1 September 2013.”
Here is the LSE’s webpage on the new High Growth Segment, the “new segment of the Main Market, designed to assist mid-sized European and UK companies that require access to capital and a public platform to continue their growth”, which launched in March 2013.
Here is a useful note by Osborne Clarke on the HGS.
- Shareholding disclosures
- Powers of significant shareholders
- Applicability of the Takeover Code
- Insider dealing and market abuse.
FSA fines Lamprell plc £2.4 million for systems and controls failings; first fine under the regulator’s new market capitalisation penalty policy
From the press release:
“The Financial Services Authority (FSA) has fined Lamprell plc (Lamprell) £2,428,300 for significant failings in its systems and controls resulting in Listing Rules and related breaches. Lamprell could not adequately monitor its financial performance against its budget and against market expectations and therefore failed in its obligations as a listed company to keep the market fully informed of its deteriorating financial position during early 2012.
The systems and controls failings resulted in Lamprell breaching the Listing Principles, the Disclosure and Transparency Rules and also the Model Code on directors’ dealings in securities.
From early in 2012, Lamprell’s financial performance against its budget had been deteriorating due to operational issues. However, Lamprell did not update the market on its deteriorating financial performance until it released a trading update on 16 May 2012. In response to this trading update, Lamprell’s share price fell by 57% demonstrating the importance of that financial information.
There were serious systems and controls failings at Lamprellread more »
Here. Topics covered:
- Changes to how the UKLA reviews eligibility for listing.
Applying the Listing Rules to guarantees under section 479C of the Companies Act 2006.
Disclosing inside information in the context of periodic financial reporting.
- Our approach to supplementary prospectuses.
- Issues surrounding risk factor disclosures.
- Information that can be included in base prospectuses and final terms.
- Issues relevant to sponsor services.
Centre Forum, a think-tank with links to the Coalition Government and to business, published last week a report titled “The path to IPO: funding SME jobs and growth”, which makes a series of (familiar) recommendations on how SMEs may be encouraged to access capital via the equity markets.
London Stock Exchange’s new “High Growth Segment” for high growth companies with minimum market cap of £300 million: announcement and draft Rulebook
This morning London Stock Exchange announced its new “High Growth Segment” of the Main Market. The HGS is aimed at fast-growing companies aspiring to be included in the Premium Segment of the UKLA’s Official List. In the words of the Exchange:
“Market feedback from investors, sell side participants and the venture capital community confirms there are a significant number of UK and European businesses with ambitious development plans that are currently under-represented on the equity markets. This segment is part of the solution – it will provide greater choice for companies seeking capital and investors seeking growth opportunities.”
The HGS will be a segment of the EU’s EU regulated market and so the EU financial services directives (including the Prospectus Directive) will apply. The HGS will not be part of the Official List, with the Exchange explicitly designing the HGS as a “transitional route” to the Official List.
Key issuer eligibility criteria are:
Pension fund investors: “shares granted to executive directors should ideally be owned for at least ten years”
A group of pension fund investors – Hermes Equity Ownership Services, the National Association of Pension Funds, the BT Pension Scheme, RPMI Railpen and USS Investment Management – yesterday published a discussion document setting out guidance on executive directors remuneration. From the accompanying NAPF press release:
“The report sets out four principles to encourage companies to change their reward structures as they begin to think ahead to the introduction of the binding vote on remuneration policy next year.
The principles are:
1. Management should make a material long-term investment in shares of the businesses they manage. For example, shares granted to executive directors should ideally be owned for at least ten years, whether or not the executive is still in post. This would encourage succession planning and reduce the need for ‘golden hellos’ for new directors.read more »
BIS press release of 30 January 2013 here. Excerpt:
“I do recognise that for some businesses, like those in the mining and extractives industry in particular, there are unique challenges in diversifying their boards with the right experience. The frequent travel and project based work in remote areas of the world have all been cited as barriers to appointing more women in the past. However, successful modern companies learn to adapt and survive and doing nothing is not an option anymore.”
The GC100 has responded to the final report of the Kay Review of UK Equity Markets and Long-Term Decision Making.
Directors’ pay in quoted companies: draft regulations and Government consultation document published
The Department of Business, Innovation and Skills today published the draft regulations that will implement the Government’s plans to reform the pay of quoted company directors. The regulations are contained in this consultation document. The accompanying BIS press releases are here and here.