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Among the essential changes made to the regime was to collapse the previous premium and basic listing sectors of the controlled market into a flagship single listing category for Equity Shares in Business Business (ESCC), referred to as the "business company" classification. Whilst the intent was to present lighter-touch guideline for the commercial company classification (compared with the previous premium listing section) the new rules still represented an action up from the previous standard listing requirements.

The shift classification is closed to brand-new candidates and to transfers from other classifications. The FCA has not yet set a particular end date for the transition category, however this will be kept under evaluation. The key provisions of the UKLR sourcebook for industrial companies are set out in the table listed below: Secret contents of the UKLR sourcebook for commercial companiesUKLR 1Preliminary: all securitiesThe FCA can give with certain UKLR requirements as it thinks about suitable.

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UKLR 2Listing PrinciplesThe Listing Principles need companies to, amongst others, establish and maintain sufficient procedures, systems and controls to allow them to adhere to their commitments under the UKLR (Listing Principle 1) and handle the FCA in an open and co-operative manner (Listing Concept 2). UKLR 3Requirements for listing: all securitiesShares must be easily transferable, totally paid and devoid of all restrictions on the right to transfer.

An FCA-approved prospectus is needed for an IPO.UKLR 4Sponsors: obligations of issuersA sponsor is needed for an IPO and for particular other deals including a commercial business, consisting of related party deals and reverse takeovers. UKLR 5Equity shares (commercial companies): requirements for admission to listingAt least 10% of shares of the noted class should be distributed to the public (i.e.

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A business must adopt a constitution allowing it to adhere to the UKLR. A business must be able to show its board has tactical autonomy. Restrictions apply to shares carrying weighted ballot rights. UKLR 6Equity shares (industrial companies): continuing obligationsCommercial business go through continuing responsibilities, consisting of: yearly reporting requirements (including compliance with the UK Corporate Governance Code, or an explanation in the event of non-compliance); compliance with environment and variety disclosure requirements; and market statement requirements.

The considerable deal statement need to include defined details, including: the advantages and threats of the transaction; a declaration on the result of the deal on the group's profits, assets and liabilities; details of any break cost; a "best interests" statement by the board; and any other relevant info required to support shareholder engagement and market openness.

UKLR 9Equity shares (business companies): additional issuances, dealing in own securities and treasury sharesPre-emption rights apply to the business's noted shares. Particular rules apply in relation to rights problems, open offers and placings (and a maximum 10% discount rate applies to open deals and placements). UKLR 10Equity shares (commercial companies): content of circularsShareholder circulars should abide by particular material requirements, and circulars in relation to specific deals (including a reverse takeover) should be approved by the FCA.UKLR 20Admission to listing: processes and proceduresSpecific procedural and documentary requirements are set out in relation to an application for listing of securities (consisting of the submission timing of providing files to the FCA). UKLR 21Suspending, cancelling, restoring listing and transfer in between listing categories: all securitiesThe FCA may suspend the listing of a business's securities if the smooth operation of the market is, or might be, briefly jeopardised or it is needed to protect investors.

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In addition to the brand-new commercial company category, the FCA also developed brand-new classifications for global secondary listings (UKLR 14) and shell companies (UKLR 13). For shell companies and SPACs, in the UKLR, the FCA mostly kept the rules that had applied to the previous standard listing segment, with improved eligibility requirements setting time limits within which initial transactions should be completed by SPACs.

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In addition, the FCA reverted to a guidance-based technique allowing larger SPACs to willingly put in place sufficient financier defenses to prevent a presumption of suspension of listing as and when an initial deal is revealed. Ahead of publication of the UKLR and to offer impact to the recommendations coming out of Lord Hill's review, the FCA implemented specific modifications to eligibility requirements set out in the then Listing Rules with impact from the end of December 2021, especially to reduce the totally free float requirement from 25% in "public hands" to 10% and to increase the minimum market capitalization limit for premium and basic listing sectors from 700,000 to 30 million (read our summary here). With the UKLR, the FCA made further changes to eligibility requirements including the adoption of a single set of Listing Concepts (to show the collapse of the previous premium and standard listing segments into a single industrial company category) and eliminated the previous premium listing requirements for a three-year revenue performance history and "tidy" working capital statement.