Chapter 8 Policies
The Shares into which the Convertible Debt securities are convertible must be listed on an exchange acceptable to the Authority.
The issuer may be a company whose equity is listed on an exchange acceptable to the Authority, a 100% owned subsidiary of the parent company with listed equity, or as otherwise agreed by the Authority.
TRADING COMPANIES ISSUING DEBT
Other than in respect of the issue of convertible debt, a trading company may seek to list debt under Chapter 8 of the Listing Rules provided the debt is being issued to another group company or to sophisticated investors.
MINIMUM SUBSCRIPTION AND TRANSFER
The Authority may require a minimum subscription and transfer amount of £100,000 or higher (or currency equivalent) in respect of subscription and transfers of securities.
WAIVER OF DIRECTOR’S DECLARATION FORM
A director of a proposed applicant will not be required to submit a Director’s Declaration as part of the initial application in the following circumstances (Listing Rule 184.108.40.206(l) relates):
- where the individual is a person or corporate who is regulated or who has been approved by a financial services regulator of a jurisdiction acceptable to the Authority; or
- where the applicant for listing is an entity regulated, authorised or approved by a financial services regulator of a jurisdiction acceptable to the Authority; or
- where the individual is a director or other principal person (e.g. company secretary) of an entity whose shares are listed on an exchange which is acceptable to the Authority; or,
- where the individual is a director or other principal person (e.g. company secretary) of the listed vehicle issuing the equity into which the convertible debt are convertible; or,
- in certain other circumstances approved by the Authority in writing e.g. where the Director is a Director of an SPV established as part of an on-going programme of investment set up by the same private equity house which establishes SPVs to invest in projects funded by the issuance of Notes to an inter-group entity.
DIRECTOR’S DECLARATION REQUIREMENTS FOR UNREGULATED CORPORATE DIRECTORS
In cases where there is a non-regulated corporate director acting for an issuer, CISEA will require a Director’s Declaration to be submitted for each individual acting on behalf of the corporate director who will be making decisions and executing documents on behalf of the issuer. As it is often impracticable to confirm the number of directorships held for individuals acting for a corporate, in order to respond to question 2 of the PQ form, CISEA will accept in respect of the directorships held through the corporate the number of directorships as opposed to a complete list. The Authority will apply its sole and absolute discretion in determining if the number of directorships of any one individual appears excessive and further queries may arise.
DOCUMENTS SUBMITTED IN RESPECT OF CONTINUING OBLIGATION MATTERS
Listing Rule 8.5.2 sets out that “Documents submitted in respect of continuing obligation matters which require action on the same day must be lodged with the Authority no later than midday on the relevant notification date”. For clarification, documents which require same day actions would be considered to include applications received in respect of a cancellation or suspension of listed securities.
Where an alternate Director regularly performs the function of a Director of an issuer, a Director's Declaration for such alternate will be required by the Authority. The Authority may waive this requirement for an alternate Director appointed on an ad-hoc basis.
The initial fee must be paid prior to the release of the initial comments letter. The annual fee for new applicants must be paid prior to approval and admission of the securities to the Official.
Non-payment of the annual fee in respect of existing listed securities could lead to the suspension and subsequent cancellation of listing of the securities.
Listing Rule 220.127.116.11(b) provides that, as part of an application for listing, the annual audited accounts of an issuer of debt securities must be consolidated in respect of the applicant and all of its subsidiaries. The Authority may derogate from the requirements of Listing Rule 18.104.22.168(b) where the issuer is not required to produce consolidated accounts by the laws of the country or territory in which it is established, where consolidated accounts are produced by an appropriate member of the issuer’s group and where those consolidated accounts are available for review by the investors and by bona fide potential investors.
WAIVER OF THREE YEARS AUDITED ACCOUNTS REQUIREMENT
Listing Rule 22.214.171.124(b) provides an exemption to the requirement of Listing Rule 126.96.36.199(a) which sets out that a new issuer of debt securities must have published audited accounts that cover at least three years. The exemption allows that the Authority may waive, in whole or in part, the requirement for three years of audited accounts where the issuer has been in existence for more than twelve months but less than three years. In these cases, where a waiver is granted, the Authority will normally ask for a statement to be included in the Listing Document that the issuer has not undertaken any trading or significant transactions during its lifespan other than those in connection with the issue of securities for which listing is sought. If any trading or significant transactions have occurred, the Authority may request interim accounts to be submitted.
INTERIM FINANCIAL STATEMENTS
Interim financial statements should provide an indication of the financial position of the Issuer and, if possible, an indication as to how the Issuer expects to perform over the short term.
The Authority would expect, as a minimum, the following information to be included in an Issuer’s interim financial statement:
- the Issuer’s financial position;
- a statement of comprehensive income;
- a statement of changes in equity;
- a cash flow statement; and
- explanatory notes.
The Issuer must ensure that the interim financial statement is sufficient so as to enable investors to make an informed assessment of the results and activities of the Issuer (and its group where relevant) for the period that it covers.
CLEARING AND SETTLEMENT
Settlement via the Issuer is considered to be an arrangement which would fall under “other clearing and settlement arrangements acceptable to the Authority”, as allowed under Listing Rule 188.8.131.52(c).