Public limited company must satisfy the admission requirements before they are allowed to trade their shares publicly.
Your public limited company must provide information which satisfies the listing requirements governed by the rules laid down by the Financial Services Authority.
The Financial Services Authority is acting as the United Kingdom Listing Authority or UKLA.
There are two Stock Exchange market in the United Kingdom – the Senior Equity Market and the Alternative Investment Market (AIM).
Senior Equity Market
The Senior Equity Market in London also known as the Official List for large public limited companies.
Alternative Investment Market
There is a secondary stock market, open to smaller companies.
To be admitted to Stock Exchange, your public limited company must meet the following criteria:
3 years preceding company accounts
To be admitted to listing, your company must be registered as a public limited company and it must intend to place on the market shares which are expected to have a market value of £700,000 or more.
Your company will not be admitted if it has not published or filed accounts covering three years preceding to your application for listing in the Stock Exchange, and your company must have arranged for a report prepared by independent accountants covering the three preceding years to be produced.
Your directors must consider that your company is financially viable. A further condition for admission is that your public limited company’s working capital is sufficient. This admission requirement is satisfied by your Approved Sponsor to the issue, usually a merchant bank or stockbroker with overall responsibility for arranging the issue, sending a letter to the United Kingdom Listing Authority stating that your directors have made careful enquiries to satisfy themselves and the Approved Sponsor that the working capital is indeed adequate.
The final principal admission requirement is that it must be intended that at least 25% of any class of shares will be in the hands of the public is required by The Listing Rules.
If your public limited company can satisfy the admission requirements, it must then also satisfy the listing particulars requirements.
This obligation involves your public limited company publishing listing particulars or a prospectus which complies with Chapter 5 and 6 of The Listing Rules.
The range of information which must be published by your public limited company includes:
- Information on the shares which are to be listed,
- Your share or loan capital,
- Principal activities,
- Place of business and employees,
- Company’s finances (in the form of balance sheet and profit and loss accounts for the last three years) and management and on trends in the company’s business.
The prospectus needs to include a statement that your company accounts have been audited for the last three financial years. The people responsible for the prospectus need to make a declaration to the effect that to the best of their knowledge, the information given in that part of the prospectus for which they are responsible is in accordance with the facts and contains no admissions likely to affect the import of the prospect us.
There are additional disclosure rules for changes in your auditors in the previous three years, details of options, tax clearances, and the terms of the directors’ service contracts.
Information contained in the prospectus should not be misleading, false or deceptive, your public limited company will incur both civil and criminal liability under the Financial Services and Markets Act 2000 if evidence supporting materials errors on the prospectus is established.