2019 No. 707
The Official Listing of Securities, Prospectus and Transparency (Amendment etc.) (EU Exit) Regulations 2019
Made
Coming into force in accordance with regulation 1(2)
M1The 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.C1
PART 1General
Citation and commencementI11
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.
InterpretationI22
In these Regulations—
“FSMA 2000” means the Financial Services and Markets Act 2000 M2;
“the FCA” means the Financial Conduct Authority.
PART 2Amendments of primary legislation
CHAPTER 1The Financial Services and Markets Act 2000
IntroductionI33
FSMA 2000 is amended as follows.
Part 6 rulesF54
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Applications for listingI45
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 rulesF66
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Prohibition of dealing etc in transferable securities without approved prospectusI57
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 publicI68
1
Section 86 (exempt offers to the public) M3 is amended as follows.
2
In subsection (1)—
F7a
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b
in paragraph (e), for “in the EEA States” substitute “
in the United Kingdom
”
.
F83
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F84
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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
”
M4
.
F96
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F97
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F98
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F99
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F910
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Election to have prospectusF109
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Criteria for approval of prospectus by FCAI710
1
Section 87A (criteria for approval of prospectus by FCA) M5 is amended as follows.
2
In subsection (1)—
a
omit paragraph (a);
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3
In subsection (2A), omit “EEA”.
F124
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F125
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Procedure for decision on application for approvalF1311
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Repeal of sections 87E and 87FF1412
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Repeal of section 87FBF1513
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Repeal of sections 87H and 87IF1614
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Power to suspend or prohibit offer to the publicF1715
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Power to suspend or prohibit admission to trading on a regulated marketF1816
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Public censure of issuerF1917
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Repeal of section 87PI818
Omit section 87P (exercise of powers at request of competent authority of another EEA State).
Transparency rulesI919
1
Section 89A (transparency rules) M6 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 informationI1020
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 securitiesI1121
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 M7.
8
In this section “specified” means specified in, or referred to in, transparency rules.
Notification of voting rights held by issuerI1222
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 etcI1323
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 issuerI1424
1
Section 89K (public censure of issuer) M8 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 securitiesI1525
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 ordersI1626
In section 89NA (voting rights suspension orders) M9, 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 rulesI1727
1
Section 89O (corporate governance rules) M10 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 informationI1828
1
Section 89W (storage of regulated information) M11 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 informationI1929
In section 90ZA (liability for key investor information) M12, for “implementing” substitute “
originally made in implementation of
”
.
Penalties for breach of Part 6 rulesI2030
1
Section 91 (penalties for breach of Part 6 rules) is amended as follows.
F202
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3
In subsection (1B)(a)(i) M13, for the words from “transparency rules” to “directive” substitute “
qualifying transparency legislation
”
.
Appointment by FCA of persons to carry out investigationsI2131
In section 97 (appointment by FCA of persons to carry out investigations), in subsection (1)—
F30a
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) M14, for the words from “by that person of” to the end substitute “
by that person of qualifying transparency legislation;
”
.
Repeal of section 100AI2232
Omit section 100A (exercise of powers where UK is host member state) M15.
Meaning of “securities” etc.I2333
1
Section 102A (meaning of “securities” etc.) M16 is amended as follows.
2
In subsection (3), for “directive”, in both places where it occurs, substitute “
regulation
”
.
3
For subsection (3A) M17 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
”
M18
.
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.I2434
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 M19
”
.
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) M20.
Repeal of section 102CI2535
Omit section 102C (meaning of “home State” in relation to transferable securities).
Interpretation of Part 6 of FSMA 2000I2636
In section 103 (interpretation of Part 6), in subsection (1)—
a
after the definition of “prospectus rules” insert—
F21...
“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 M21;
Liability of issuers in connection with published informationI2737
1
Schedule 10A (liability of issuers in connection with published information) M22 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
”
;
ii
for “that directive” substitute “
transparency rules
”
.
4
In paragraph 8—
a
in sub-paragraph (1)—
i
for paragraph (a) substitute—
a
“securities” means transferable securities as defined in Article 2(1)(24) of the markets in financial instruments regulation, other than money market instruments as defined in Article 2(1)(25A) of that regulation that have a maturity of less than 12 months (and includes instruments outside the United Kingdom);
ii
in paragraph (b), for sub-paragraphs (i) to (iii) substitute—
i
a regulated market as defined in Article 2(1)(13) of the markets in financial instruments regulation, or
ii
a multilateral trading facility as defined in Article 2(1)(14) of that regulation.
b
omit sub-paragraph (6)(b).
Transferable securities excluded from certain provisions of section 85 of FSMA 2000I2838
1
Schedule 11A (transferable securities) M24 is amended as follows.
F232
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F234
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F235
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6
In paragraph 7, omit sub-paragraph (2)(e).
F227
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F228
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CHAPTER 2The Companies Act 2006
Repeal of section 1273 of the Companies Act 2006I2939
Omit section 1273 of the Companies Act 2006 M25 (corporate governance regulations).
PART 3Amendments of EU Regulations and EU Decision
CHAPTER 1Amendments of Commission Regulation (EC) No. 809/2004
F2...F240
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F243
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F244
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F245
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F246
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F247
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F249
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F250
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F252
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F255
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F260
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F261
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F262
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F263
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F264
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F265
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F266
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CHAPTER 2Amendments of other EU Regulations and of EU Decision
Commission Regulation (EC) No 1569/2007I3067
1
Commission Regulation (EC) No 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council is amended as follows.
2
In Article 1 (subject matter)—
a
after “considered” insert “
for the specified purposes as
”
;
b
for the words from “International” to “IFRS)” substitute “
UK-adopted international accounting standards
”
;
F24c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
In Article 2 (equivalence)—
a
after “considered” insert “
for the specified purposes as
”
;
b
for the words from “IFRS adopted” to “No 1606/2002” substitute “
UK-adopted international accounting standards
”
;
c
for “in accordance with IFRS” substitute “
in accordance with UK-adopted international accounting standards
”
.
4
In Article 3 (equivalence mechanism)—
a
in the first paragraph—
i
for “Commission” substitute “
Treasury
”
;
ii
for “competent authority of a Member State” substitute “
Financial Conduct Authority
”
;
b
for the second paragraph substitute—
Before making a determination of equivalence, the Treasury must consult the Secretary of State.
A determination of equivalence is to be made by the Treasury by regulations made by statutory instrument.
5
After Article 3 insert—
Article 3ATreasury regulations under Article 3
1
Regulations made by the Treasury under Article 3 may—
a
contain incidental, supplemental, consequential and transitional provision,
b
make different provision for different purposes, and
c
amend or revoke Commission Decision (EC) No 2008/961 on the use by third countries' issuers of securities of certain third country's national accounting standards and International Financial Reporting Standards to prepare their consolidated financial statements.
2
A statutory instrument containing regulations made by the Treasury under Article 3 is subject to annulment in pursuance of a resolution of either House of Parliament.
6
Omit Article 4 (conditions for the acceptance of third country accounting standards for a period ending no later than 31 March 2016).
7
Omit Article 5 (entry into force and application).
Commission Decision (EC) No 2008/961I3168
1
Commission Decision (EC) No 2008/961 of 12 December 2008 on the use by third countries' issuers of securities of certain third country's national accounting standards and International Financial Reporting Standards to prepare their consolidated financial statements is amended as follows.
2
In Article 1—
a
in the first paragraph—
i
for the words from the beginning to “No 1606/2002:”, in the second place where it occurs, substitute “
From F27IP completion day, with regard to annual consolidated financial statements and half-yearly consolidated financial statements, the following standards are to be considered as equivalent to UK-adopted international accounting standards:
”
;
ii
after point (c) insert—
d
International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of International Accounting Standards, as it applies in the European Union.
b
in the second paragraph, for the words from the beginning to “No 1606/2002:” substitute “
From F28IP completion day, with regard to annual consolidated financial statements and half-yearly consolidated financial statements, the following standards are to be considered as equivalent to UK-adopted international accounting standards:
”
;
c
omit the paragraph beginning “Third country issuers”;
d
at the end insert—
In this Decision “third country” means a country outside the United Kingdom.
3
Omit Article 1a.
4
Omit Articles 2 and 3.
European Parliament and Council Regulation (EU) 2017/1129I3269
In Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/ECF31, omit Article 3(2).
PART 4Transfer of directive functions to the Treasury or the FCA
Interpretation of Schedule 2I3370
Part 1 of Schedule 2 contains interpretative provisions for the purposes of that Schedule.
Transfer of directive functions to the TreasuryI3471
1
The Treasury may make regulations for the purposes specified in Part 2 of Schedule 2.
2
The power to make regulations conferred on the Treasury by this regulation is exercisable by statutory instrument.
3
The regulations may—
a
contain incidental, supplemental, consequential and transitional provision, and
b
make different provision for different purposes.
4
A statutory instrument containing regulations under this regulation is subject to annulment in pursuance of a resolution of either House of Parliament.
Transfer of directive functions to the FCAI3572
The FCA may make technical standards for the purposes specified in Part 3 of Schedule 2.
PART 5Transitional provision
Prospectus approved before F2521st July 2019 by competent authority of other EEA stateF3273
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F1SCHEDULE 1Amendments of Annexes to Commission Regulation (EC) No 809/2004
Sch. 1 omitted (6.9.2019) by virtue of The Prospectus (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/1234), regs. 1(2), 24 (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1234, reg. 29(2)))
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8
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9
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10
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14
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16
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SCHEDULE 2Transfer of functions to the Treasury and the FCA
PART 1Interpretation
I361
PART 2Directive functions transferred to the Treasury
I372
The following purposes are specified for the purposes of regulation 71.
F33
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F34
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F35
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F36
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F37
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F38
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F39
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I3810
To establish for the purposes of transparency rules an indicative list of means that are not to be considered electronic means M26.
I3911
In order to take account of developments on financial markets, to specify the conditions under which an annual financial report, published in accordance with an obligation imposed by virtue of section 89C of FSMA 2000, including the audit report, must remain available to the public and to adapt the period referred to in rule 4.1.4 of the Disclosure Guidance and Transparency Rules sourcebook M27.
I4012
In order to take account of developments on financial markets, to specify the requirements to be met by the half-yearly financial reports required by virtue of section 89C of FSMA 2000, to specify the conditions under which such a report, including the auditors' review, must remain available to the public, to clarify the nature of the auditors' review, to specify the minimum contents of the condensed balance sheet and profit and loss accounts and explanatory notes on those accounts, and to adapt the period referred to in rule 4.2.2(3) of the Disclosure Guidance and Transparency Rules sourcebook M28.
I4113
In order to take account of developments on financial markets, to do one or more of the following—
a
to specify requirements to be met by shareholders when giving notification to the issuer of the proportion of voting rights as a result of events changing the breakdown of voting rights, and on the basis of the information disclosed pursuant to rule 5.6.1 of the Disclosure Guidance and Transparency Rules sourcebook;
b
to specify requirements to be complied with in order for an issuer to benefit from the exemption in rule 5.1.3 (1) or (2) of that sourcebook;
c
to specify requirements to be complied with in order for an issuer to benefit from the exemption in rule 5.1.3(3) of that sourcebook;
d
to specify the maximum length of the settlement cycle referred to in rule 5.1.3(1) of that sourcebook;
e
to draw up a list of the events changing the breakdown of voting rights and giving rise to an obligation to notify the issuer in accordance with rule 5.1.2 of that sourcebook M29.
I4214
In order to take account of developments on financial markets, to do one or more of the following—
a
to make provision for the publication by the FCA of a calendar of trading days in each regulated market;
b
to establish in which cases the shareholder, or the person regarded by virtue of section 89F(1)(b)(ii) of FSMA 2000 as holding voting rights in respect of shares, or both, are to give any notification to the issuer that is required by virtue of section 89B of that Act M30;
c
to clarify the circumstances under which the shareholder, or the person regarded by virtue of section 89F(1)(b)(ii) of that Act as holding voting rights in respect of shares, should have learned of the acquisition or disposal of voting rights M31.
I4315
To clarify the conditions of independence to be complied with by management companies and their parent undertakings or by investment firms and their parent undertakings in order to benefit from rule 5.4.1 or 5.4.2 of the Disclosure Guidance and Transparency Rules sourcebook M32.
I4416
To specify the contents of the notification to be made, the notification period, and to whom the notification is to be made, under rule 5.3.1 of the Disclosure Guidance and Transparency Rules sourcebook M33.
I4517
In order to take account of developments on financial markets, to specify the requirements that must be imposed on issuers by transparency rules made by virtue of section 89D of FSMA 2000 M34.
I4618
In order to take account of developments on financial markets and developments in information and communication technology, to specify requirements that must be imposed by Section 1 of Chapter 6 of the Disclosure Guidance and Transparency Rules sourcebook, so far as relating to issuers of shares or debt securities M35.
I4719
To specify the minimum standards for—
a
the dissemination of information in accordance with Section 3 of Chapter 6 of the Disclosure Guidance and Transparency Rules sourcebook;
b
the central storage mechanism required by section 89W of FSMA 2000 M36.
I4820
To establish general criteria for the purposes of section 89A(4A) of FSMA 2000 in relation to financial statements and information required under the law, regulations or administrative provisions of a country or territory outside the United Kingdom and to state that, by reason of its domestic law, its administrative provisions, or practices or procedures based on international standards set by international organisations, a country or territory outside the United Kingdom ensures equivalent information requirements M37.
PART 3Directive functions transferred to FCA
I4921
The following purposes are specified for the purposes of regulation 72.
F422
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F423
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F424
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F425
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F426
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F427
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F428
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F429
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F430
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I5031
To specify the electronic reporting format for annual financial reports published in accordance with an obligation imposed by virtue of section 89C(2) of FSMA 2000 M38.
I5132
To specify the method of calculating any percentage threshold applying for the purposes of rule 5.1.3 of the Disclosure Guidance and Transparency Rules sourcebook M39.
I5233
To establish standard forms, templates and procedures to be used when—
a
notifying required information to the issuer under transparency rules made by virtue of section 89B of FSMA 2000, or
b
notifying the FCA under transparency rules made by virtue of section 89B of FSMA 2000 M40.
I5334
To specify for the purposes of rule 5.3.3A of the Disclosure Guidance and Transparency Rules sourcebook—
a
the method for calculating the number of voting rights in the case of financial instruments referenced to a basket of shares or an index, and
b
the methods for determining delta for the purposes of calculating voting rights relating to financial instruments which provide exclusively for a cash settlement M41.
I5435
To specify the cases in which the exemptions laid down in rules 5.1.3, 5.4.1, 5.4.2 and 5.8.6 of the Disclosure Guidance and Transparency Rules sourcebook apply to financial instruments held by a person fulfilling orders received from clients or responding to a client's request to trade otherwise than on a proprietary basis, or hedging positions arising out of such dealings M42.
Regulations: power to modify conferred (11.7.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 3, 86(3), Sch. 1 Pt. 2; S.I. 2023/779, reg. 2(d)