The Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019

Made: 27th March 2019

Coming into force in accordance with regulation 1(2)

The Treasury make these Regulations in exercise of the powers conferred by section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 2018 .

In accordance with paragraph 1(1) of Schedule 7 to that Act a draft of this instrument has been laid before Parliament and approved by a resolution of each House of Parliament.

PART 1 — General

Citation and commencement

1

• (1) These Regulations may be cited as the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019.

• (2) These Regulations come into force on exit day.

Interpretation

2

In these Regulations—

• “FSMA 2000” means the Financial Services and Markets Act 2000 ;

• “the FCA” means the Financial Conduct Authority.

PART 2 — Amendments of primary legislation

CHAPTER 1 — The Financial Services and Markets Act 2000

Introduction

3

FSMA 2000 is amended as follows.

Part 6 rules

4

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Applications for listing

5

In section 75 (applications for listing), in subsection (6), for “officially listed in another EEA State” substitute “ listed in a country or territory outside the United Kingdom ”.

Matters which may be dealt with by prospectus rules

6

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Prohibition of dealing etc in transferable securities without approved prospectus

7

In section 85 (prohibition of dealing etc in transferable securities without approved prospectus), in subsection (7), for the words from “competent authority” to the end substitute “ FCA ”.

Exempt offers to the public

8

• (1) Section 86 (exempt offers to the public) is amended as follows.

• (2) In subsection (1)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) in paragraph (e), for “in the EEA States” substitute “ in the United Kingdom ”.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) In subsection (2), for “point (1) of Section I of Annex II to the markets in financial instruments directive” substitute “ paragraph 3(a) of Schedule 1 to the markets in financial instruments regulation ” .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Election to have prospectus

9

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Criteria for approval of prospectus by FCA

10

• (1) Section 87A (criteria for approval of prospectus by FCA) is amended as follows.

• (2) In subsection (1)—

• (a) omit paragraph (a);

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In subsection (2A), omit “EEA”.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure for decision on application for approval

11

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Repeal of sections 87E and 87F

12

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Repeal of section 87FB

13

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Repeal of sections 87H and 87I

14

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Power to suspend or prohibit offer to the public

15

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Power to suspend or prohibit admission to trading on a regulated market

16

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Public censure of issuer

17

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Repeal of section 87P

18

Omit section 87P (exercise of powers at request of competent authority of another EEA State).

Transparency rules

19

• (1) Section 89A (transparency rules) is amended as follows.

• (2) For subsection (1) substitute—

(1) The FCA may make rules— (a) imposing requirements in relation to the disclosure of periodic or ongoing information about issuers whose securities are admitted to trading on a regulated market, and (b) dealing with matters arising out of or relating to such requirements.

• (3) In subsection (2), after “any matters” insert “ dealt with in the transparency obligations directive or with any matters that, when the United Kingdom was a member State, would have been matters ”.

• (4) After subsection (4) insert—

(4A) The provision that may be made by virtue of subsection (4)(g) includes (but is not limited to) provision, in the case of an issuer whose registered office is situated in a country or territory outside the United Kingdom, allowing exemption from specified provisions of rules under this section if— (a) the law of that country or territory is considered by the FCA to lay down equivalent requirements, or (b) the issuer complies with the requirements of the law of a country or territory that the FCA considers as equivalent.

Provision of voteholder information

20

• (1) Section 89B (provision of voteholder information) is amended as follows.

• (2) In subsection (4), for the words from “person” to the end substitute “ person in accordance with the following provisions ”.

• (3) In subsection (5), omit “under subsection (4)(b)”.

Provision of information by issuers of transferable securities

21

• (1) Section 89C (provision of information by issuers of transferable securities) is amended as follows.

• (2) In subsection (2), for paragraphs (a) and (aa) (except the final “and”) substitute—

(a) an annual financial report which complies with subsection (5) and with such other requirements as may be specified; (aa) in the case of an issuer which is— (i) a mining or quarrying undertaking, or (ii) a logging undertaking, reports complying with specified requirements on payments to governments;

• (3) In subsections (3) and (4)(a), for “information required by Article 5 of the transparency obligations directive” substitute “ a half-yearly financial report which covers the first 6 months of the financial year and complies with subsection (6) and with such other requirements as may be specified ”.

• (4) After subsection (4) insert—

(5) An issuer's annual financial report must include— (a) audited financial statements complying with specified requirements, (b) a management report complying with specified requirements, and (c) statements which— (i) relate to the financial statements and the management report, (ii) are made by the persons responsible within the issuer, and (iii) comply with specified requirements. (6) An issuer's half-yearly financial report must include— (a) a condensed set of financial statements complying with specified requirements, (b) an interim management report complying with specified requirements, and (c) statements which— (i) relate to the condensed set of financial statements and the interim management report, (ii) are made by the persons responsible within the issuer, and (iii) comply with specified requirements. (7) In subsection (2)(aa), “mining or quarrying undertaking”, “logging undertaking”, “payment” and “government” have the same meanings as in the Reports on Payments to Governments Regulations 2014 . (8) In this section “specified” means specified in, or referred to in, transparency rules.

Notification of voting rights held by issuer

22

• (1) Section 89D (notification of voting rights held by issuer) is amended as follows.

• (2) In subsection (1), for the words from “the issuer” to the end substitute “ the issuer in accordance with the following provisions ”.

• (3) In subsection (2), omit “under subsection (1)(b)”.

Transparency rules: interpretation etc

23

In section 89F (transparency rules: interpretation etc), after subsection (1) insert—

(1A) The FCA must establish, publish and periodically update an indicative list of financial instruments that are subject to notification requirements by virtue of subsection (1)(b)(iii), taking into account developments on financial markets. (1B) Publication of the indicative list is to be in such manner as the FCA considers appropriate.

Public censure of issuer

24

• (1) Section 89K (public censure of issuer) is amended as follows.

• (2) In subsection (5), for the words from “under” to the end substitute “ under qualifying transparency legislation ”.

• (3) After subsection (5) insert—

(5A) In this Part “qualifying transparency legislation” means— (a) transparency rules, (b) any EU regulation, originally made under the transparency obligations directive, that is retained direct EU legislation, (c) regulations made by the Treasury under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for a purpose specified in paragraphs 10 to 20 of Schedule 2 to those Regulations, or (d) technical standards made by the FCA under regulation 72 of those Regulations for a purpose specified in paragraphs 31 to 35 of that Schedule.

• (4) Omit subsection (6).

Power to suspend or prohibit trading of securities

25

• (1) Section 89L (power to suspend or prohibit trading of securities) is amended as follows.

• (2) In subsection (3), for the words from “a provision” to “directive” substitute “ an applicable transparency obligation ”.

• (3) In subsection (5), for the words from “under” to the end substitute “ under qualifying transparency legislation ”.

• (4) Omit subsection (6).

Voting rights suspension orders

26

In section 89NA (voting rights suspension orders) , in subsection (11), in the definition of “relevant transparency provision”—

• (a) in paragraph (a), for “implements” substitute “ implemented ”;

• (b) omit the “or” at the end of paragraph (a);

• (c) for paragraph (b) substitute—

(b) a provision, originally made under any of those Articles, that is retained direct EU legislation, (c) a provision of regulations made by the Treasury under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for a purpose specified in paragraphs 13 to 16 of Schedule 2 to those Regulations, or (d) a provision of technical standards made by the FCA under regulation 72 of those Regulations for a purpose specified in paragraphs 32 to 35 of that Schedule.

Corporate governance rules

27

• (1) Section 89O (corporate governance rules) is amended as follows.

• (2) For subsection (1) substitute—

(1) The FCA may make rules (“corporate governance rules”) relating to the corporate governance of issuers who have requested or approved admission of their securities to trading on a regulated market.

• (3) Omit subsections (3) and (4).

Storage of regulated information

28

• (1) Section 89W (storage of regulated information) is amended as follows.

• (2) In subsection (1), omit the words from “meeting” to the end.

• (3) After that subsection insert—

(1A) The mechanism must comply with minimum quality standards of security, certainty as to the information source, time recording and easy access by end users (see provision made under regulation 71 of the Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019 for the purpose specified in paragraph 19(b) of Schedule 2 to those Regulations). (1B) The mechanism must be aligned with the procedure for filing the regulated information with the FCA.

• (4) For subsection (2) substitute—

(2) In this section “regulated information” means information which an issuer, or a person who has applied for the admission of securities to trading on a regulated market without the issuer's consent, is required to disclose under— (a) listing rules, (b) qualifying transparency legislation, or (c) Articles 17 to 19 of the market abuse regulation.

Liability for key investor information

29

In section 90ZA (liability for key investor information) , for “implementing” substitute “ originally made in implementation of ”.

Penalties for breach of Part 6 rules

30

• (1) Section 91 (penalties for breach of Part 6 rules) is amended as follows.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In subsection (1B)(a)(i) , for the words from “transparency rules” to “directive” substitute “ qualifying transparency legislation ”.

Appointment by FCA of persons to carry out investigations

31

In section 97 (appointment by FCA of persons to carry out investigations), in subsection (1)—

• (a) in paragraph (a), for sub-paragraph (ii) (including the “or” at the end) substitute—

(ii) any other provision of qualifying transparency legislation, or

• (b) in paragraph (b), for sub-paragraph (ii) (including the “or” at the end) substitute—

(ii) any other provision of qualifying transparency legislation, or

• (c) in paragraph (ba) , for the words from “by that person of” to the end substitute “ by that person of qualifying transparency legislation; ”.

Repeal of section 100A

32

Omit section 100A (exercise of powers where UK is host member state) .

Meaning of “securities” etc.

33

• (1) Section 102A (meaning of “securities” etc.) is amended as follows.

• (2) In subsection (3), for “directive”, in both places where it occurs, substitute “ regulation ”.

• (3) For subsection (3A) substitute—

(3A) “Debt securities” means bonds or other forms of transferable securitised debts, with the exception of— (a) transferable securities which are equivalent to shares, and (b) transferable securities which, if converted or if the rights conferred by them are exercised, give rise to a right to acquire— (i) shares, or (ii) transferable securities equivalent to shares.

• (4) In subsection (4), for the words from “has” to the end substitute “ means those instruments specified in Part 1 of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ” .

• (5) For subsection (5) substitute—

(5) “Non-equity transferable securities” means all transferable securities that are not equity securities; and for this purpose the following are “equity securities”— (a) shares, (b) other transferable securities which are equivalent to shares, and (c) transferable securities which— (i) are within neither of paragraphs (a) and (b), (ii) give the right to acquire securities within paragraph (a) or (b) if converted or if the rights conferred by them are exercised, and (iii) are issued by the issuer of the underlying shares or by an entity belonging to the group of that issuer.

Meaning of “offer of transferable securities to the public” etc.

34

• (1) Section 102B (meaning of “offer of transferable securities to the public” etc.) is amended as follows.

• (2) In subsection (5)(a), after “a regulated market” insert “ , as defined in Article 2(1)(13) of the markets in financial instruments regulation ”.

• (3) For subsection (6) substitute—

(6) “Multilateral trading facility” has the same meaning as in the markets in financial instruments regulation (see Article 2(1)(14) of that Regulation) .

Repeal of section 102C

35

Omit section 102C (meaning of “home State” in relation to transferable securities).

Interpretation of Part 6 of FSMA 2000

36

In section 103 (interpretation of Part 6), in subsection (1)—

• (a) after the definition of “prospectus rules” insert—

... “qualifying transparency legislation” has the meaning given in section 89K(5A);

• (b) for the definition of “regulated market” substitute—

“regulated market” (except in section 102B and Schedule 10A) means a UK regulated market, as defined in Article 2(1)(13A) of the markets in financial instruments regulation ;

Liability of issuers in connection with published information

37

• (1) Schedule 10A (liability of issuers in connection with published information) is amended as follows.

• (2) In paragraph 1, for sub-paragraph (3) substitute—

(3) For the purposes of this Schedule the United Kingdom is the home State of an issuer if— (a) the transparency rules impose requirements on the issuer in relation to the securities, or (b) the issuer has its registered office (or, if it does not have a registered office, its head office) in the United Kingdom.

• (3) In paragraph 2(4)—

• (a) in paragraph (a)—

• (i) for “EEA” substitute “ United Kingdom ”;

• (ii) for “Article 21 of the transparency obligations directive” substitute “ transparency rules ”;

• (b) in paragraph (b)—

• (i) for “EEA” substitute “ United Kingdom ”;