UK Listing Rules – latest FCA guidance in Primary Market Bulletin 53

The Financial Conduct Authority (FCA) has published Primary Market Bulletin 53 (PMB 53) as it continues to update the technical and procedural notes of its Knowledge Base to reflect the new UK Listing Rules implemented in July 2024. PMB 53 addresses outstanding items from Primary Market Bulletins 48–51 (PMBs 48-51) and consults on further changes to technical and procedural notes for both the sponsor regime and non-sponsor topics (see our blog post on PMBs 48-51 here).

New and updated sponsor guidance, and reconsultation

PMB 53 confirms that the FCA is finalising guidance for sponsors (as consulted in Primary Market Bulletin 50) as follows:

• Sponsors: Record Keeping Requirements (Primary Market/TN/717.2) – an update of the existing technical note, which now includes a Q&A section to provide a sense of the FCA's reasonable expectations, practical considerations and examples that a sponsor can consider when exercising its judgement. The FCA anticipates adding to the Q&A section as it identifies further pragmatic steps sponsors can take to ensure record keeping is proportionate and sufficient for FCA reviews;
• Responsibilities of a sponsor: Specialist due diligence (Primary Market/TN/722.1) – a new technical note confirming the FCA does not expect sponsors "to be experts in everything" and clarifying that if a sponsor relies on a highly specialised form of expert reporting, they may be less competent to give detailed challenge; and
• FCA reviews of sponsor services (Primary Market /TN/723.1) – a new technical note setting out how the FCA approaches providing feedback to sponsors and what it expects in response. The FCA has said it will continue to consider and develop its supervisory approach to sponsors.

The FCA is also reconsulting on the technical note Sponsor Services: Principles for Sponsors (Primary Market/TN710.2) following feedback received in Primary Market Bulletin 48 (PMB 48), in particular to include additional examples to help to clarify when a sponsor service may exist and therefore when the associated sponsor principles apply.

Material changes to guidance for listed companies and other listed entities, and reconsultation

In addition, the FCA is consulting on the following material changes to other technical notes yet to be amended for the new UKLRs to:

• Listing Principle 2 Dealing with the FCA in an open and cooperative manner (Primary Market /TN/209.3): add further guidance clarifying that Listing Principle 2 also applies where an issuer becomes aware that they are no longer able to comply with a continuing obligation in the UKLRs;
• Acquiring assets during investment trust roll-overs (Primary Market /TN/401.2): detail common types of transaction structures where closed-ended investment funds are acquired assets by a scheme of reconstruction; and
• Open-ended investment companies (Primary Market/TN/423.2 ) and Open-ended investment management agreements and transfer restrictions (UKLA/TN/425.1): combine the notes to provide one note for all OEIC related topics and amend the note to bring it fully up to date on the current rules for OEICs. 

The FCA is reconsulting on the technical note on Aggregating transactions (Primary Market/TN 307.2) to reflect feedback following PMB 48 and propose further amendments to reflect the final rules introduced on 29 July 2024.

Updates to other FCA guidance – consequential changes

PMB 53 also sets out minor updates to several other technical and procedural notes to reflect the most recent changes to the listing regime and historical changes that have not yet been reflected. This includes removing references to the Prospectus Directive, reflecting changes brought about by Brexit and historical changes to FCA processes.

The consultation closes on 23 January 2025.