Following the creation of a new two-tier UK listing regime (see here), the FSA is carrying out its promised exercise to allocate all securities to the relevant listing category within the Premium Listing or the Standard Listing segment.
The allocation exercise will be important to avoid unintended consequences
such as a convertible bond issuer with a Standard Listing finding itself subject to the same range of continuing obligations as a company with a Premium Listing.
The listing category that a security is allocated into is determined by the characteristics of the security in question and not what it may be convertible into. The categories proposed are:
Premium Listing segment:
- Equity Shares (commercial companies);
- Equity Shares (Open Ended Investment Funds); and
- Equity Shares (Open Ended Investment Companies).
Standard Listing segment:
- Shares;
- GDRs;
- Debt and Debt-like;
- Securitised Derivatives; and
- Miscellaneous Securities.
There is no Premium Listing category for preference shares or securities convertible into preference shares.
The allocation exercise requires amendments to existing definitions and the scope of the current Listing Rule chapters to ensure that only securities capable of meeting the “super equivalent” provisions required to ensure eligibility for the Premium Listing segment qualify for it. To help educate the securities industry on the changes, the FSA intends to work with a range of market participants to help increase their awareness of the new segmentation and listing categories. Other rule changes will support this aim, for example all listed companies will have to ensure that they display the segment and category to which their securities belong when they make a regulatory announcement.
The proposal in FSA CP 09/28 is available here and comments are requested by 4 January 2010.
