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Which of the following must a private company comply with in order to be re-registered as a public company? A.Pass a special resolution. B.File an application with the Registrar of Companies. C.Have an allotted share capital with a nominal value of not less than £50,000. D.File a balance sheet showing that at the balance sheet date the amount of the company's net assets was not less than the amount of its called up share capital and undistributable reserves. E.Change its name so that it is consistent with being a public company. Private companies seeking seeking admission to the Official List will have to re-register as public companies. The requirements for re-registration are set out in sections 90-96 CA 2006. Indicate whether the following statement is true or false: The terms 'listed company' and 'public company' mean the same thing and can be used interchangeably. True False Under section 4(2) Companies Act 2006 a public company is defined as a company with a Certificate of Incorporation that states it is a public company and which has complied with the registration or re-registration requirements of the 2006 Act or former Companies Acts. To be 'listed', a company's shares must have been admitted to the Official List maintained by the Financial Conduct Authority. In practice UK companies that are 'listed' will always be a public companies because of the prohibition on listing securities of a private company (Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001, Regulation 3). Indicate whether the following statement is true or false: The London Stock Exchange plc is a 'recognised investment exchange' and therefore exempt from the general prohibition in section 19 of the Financial Services and Markets Act 2000 from carrying on a 'regulated activity'. True False The London Stock Exchange has been granted a 'recognition order' as a 'recognised investment exchange' under section 285 of the Financial Services and Markets Act 2000 and is therefore exempt from the general prohibition as regards regulated activities which are carried on as part of the Exchange's business. For a company's shares to be admitted to the Official List, it is necessary that they are also admitted to trading on the Main Market of the London Stock Exchange or on another market of a recognised investment exchange. True or false? True False See Listing Rule 2.2.3R and the definitions of "admission to trading" and "RIE".

The London Stock Exchange's AIM market is a 'regulated market' for the purposes of the Prospectus Regulation. True or false? True False AIM is not, like the Main Market, an EU 'regulated market'. It is known as an 'MTF' (Multilateral Trading Facility) for the purposes of EU financial services law. TechPlan plc ("Techplan") is proposing to apply for its shares to be admitted to the premium segment of the Official List and to trading on the Main Market of the London Stock Exchange. It currently has no shares listed on the Official List. Which one or more of the following requirements must Techplan comply with in order to meet the eligibility requirements of the Listing Rules? You may assume that the FCA will not dispense with any requirements or grant any concessions from the usual requirements of the Listing Rules. A. Must have audited accounts relating to a period of at least three years. B. Must satisfy the FCA that it has sufficient working capital to meet its requirements for the 12 months following publication of its prospectus. C. A sufficient number of the company's shares must, by the time of admission, be distributed to the public in one or more EEA states. D. Must be able to demonstrate that it carries on an independent business as its main activity. The correct references are:  A - (LR 6.2.1R)  B - (LR 6.7.1R)  C - (LR 6.14.1R)  D - (LR 6.4.1R) Note that these requirements do NOT apply in the circumstances mentioned in LR 6.1.1R (1) or (2) e.g. where the company already has a premium listing of equity shares and is seeking admission to listing of new shares of the same class and is not entering into a transaction that would be classified under the Listing Rules as a "reverse takeover".Note further that, if sufficient shares cease to be in public hands, the FCA has the right to cancel the listing in accordance with Listing Rule 5.2.1R (which should be read with the guidance note LR 5.2.2G). Premium listed companies must have sufficient shares in public hands at all times (LR 9.2.15R). It is therefore a continuing obligation that applies as long as the company remains a premium listed company. Which of the following methods of listing will raise finance for the applicant company? A. An offer for subscription. B. A rights issue. C. An introduction or admission of existing shares. D. An intermediaries offer. 'Introduction' is a method of bringing securities to listing involving the admission of shares already

in issue (sometimes used by overseas companies that have an existing listing in their home state but also want to be listed in another jurisdiction - London for example). It will not however raise new money for the company. It is a requirement for a successful application for a premium listing of shares that a "sufficient number" of the shares will be distributed to the public in one or more EEA States. Which one of the following percentages of shares in public hands will generally be held to meet this requirement? A. 10 per cent. B. 20 per cent. C. 25 per cent. D. 51 per cent. see Listing Rules 6.14.1R and 6.14.2R (2).Note also what counts as being in public hands for this purpose and the circumstances in which shares held by directors and persons connected with them will not be regarded as being in public hands. See also the Guidance Note which indicates that the FCA may accept a lower percentage if satisfied that the market will operate properly as such a level - this should tell you what the underlying purpose of the rule is. Indicate whether the following statement is true or false: An application for admission to trading of any class of securities must relate only to securities which are listed or the subject of an application for listing. True False See the Guidance Note to Condition 2.1 of the Admission and Disclosure Standards. See also the counterpart requirements of Listing Rule 2.2.3R with regard to admission to listing. Companies seeking a quotation of their shares on AIM must have at least 25% of their shares in public hands after the IPO and have at least a 3 year trading record.True or false? True False There is no minimum percentage requirement for shares in public hands or a minimum trading period required in order for a company to join AIM. Which two or more of the following are exempt under the Prospectus Regulation from the general requirement to publish a prospectus in connection with offers of securities to the public? A.Offers to qualified investors only. B.Offers made to fewer than 150 persons, other than qualified investors, per EEA state. C.Offers of securities made in connection with a takeover provided a document containing information describing the transaction and its impact on the issuer is made available to the public.

D.Shares allotted to existing or former directors or employees provided a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer or allotment. They are all exempt under provisions of the Prospectus Regulation. The relevant authorities are:  A - Art. 1 (4) (a) Prospectus Regulation. See Art. 2 (e) Prospectus Regulation for the meaning of 'qualified investors'.  B - Art. 1 (4) (b) Prospectus Regulation.  C - Art. 1 (4) (f). The minimum information required to be included in such a document is prescribed by Level 2 regulations made under Art. 1 (7).  D - Art. 1 (4) (i) Prospectus Regulation. Supernova plc's shares are quoted on AIM. Which of the following rules will apply to Supernova while it is on AIM? A. Nomad Rules B. Prospectus Regulation Rules C. Listing Rules D. DTR 5 (Disclosure and Transparency Rule 5) E. AIM Rules A, Nomad Rules, only apply to the Nomad and not the quoted company. C, Listing Rules, only apply to companies admitted to the Official List. B, PRRs, will only apply if Supernova is required to publish a prospectus. Indicate whether the following statement is true or false: The subject matter in each row of the left hand column below is correctly identified as being derived from the primary source material in the opposite row of the right hand column. True or false? A. Grants power to the Financial Conduct Authority to make 'Part 6 Rules' - The Financial Services and Markets Act 2000. B. Contains detailed contents requirements for prospectuses - PR Regulation and Prospectus Regulation Rules. C. Specifies the circumstances applicable throughout the EU in which a prospectus must be published - Prospectus Regulation D. Contains the detailed eligibility criteria for admission of securities to listing - The Listing Rules. E. Contains exemptions from the requirement to produce a prospectus - Prospectus Regulation F. Contains the admissions procedure for admission of securities to trading on the London Stock Exchange's Main Market - The Admission and Disclosure Standards. True False

See in particular:  A (Section 73A FSMA).  B (PR Regulation and Prospectus Regulation Rules (PRR App 2)).  C (Article 3, Prospectus Regulation).  D (Chapters 2 and 6 Listing Rules).  E (Article 1, Prospectus Regulation).  F (Admissions and Disclosure Standards, particularly Section 2 and 3). Indicate whether the following statement is true or false. If an offer of securities to the public is exempt from the requirement to produce a prospectus, there is no need to publish a prospectus in connection with an application for those securities to be admitted to trading on a regulated market such as the London Stock Exchange's Main Market. True False The obligation to publish a prospectus is set out in Article 3 of the Prospectus Regulation. If there is an offer to the public made to persons in the UK and/or an application for shares to be admitted to trading on a regulated market in the UK it will also be covered by s85 Financial Services and Markets Act 2000 ("FSMA 2000"). Art. 3 (1) deals with offers to the public; Art. 3 (3) deals with applications for admission to trading. The equivalent provisions under FSMA 2000 are s85 (1) and s85 (2). They are separate and independent. Exemption from one will not automatically confer exemption from the other, although there are some common grounds of exemption under Article 1 of the Prospectus Regulation. An offer to the public for example, may be exempt on the ground that it is made to 'qualified investors' only (Art. 1 (4) (a)) but this will not exempt it from the requirement to produce a prospectus if the securities are to be admitted to trading on a regulated market unless there is a separate exemption available in respect of that application. Which of the following combinations of Annexes to Commission Delegated Regulation (EU) 2019/980 contains the minimum information that should be included in a prospectus for equity shares issued in connection with an IPO and assuming the prospectus included pro-forma information? A.Annexes 3 and 12 B.Annexes 7 and 11 C.Annexes 1, 11 and 20. D.Annexes 1 and 14 Annex 1 contains the minimum disclosure requirements for the Registration Document for equity securities, Annex 11 contains the minimum disclosure requirements for the Securities Note and Annex 20 sets out the requirements for Pro Forma Information. (Chapter 17.5.1.1) A prospectus may be drawn up as a single document or as separate documents comprising : the Summary; the Registration Document and the Securities Note. The Summary can often be the only part of a Prospectus that many investors read. Which one of the following statements about a Summary is INCORRECT?

A.A person is not subject to civil liability solely on the basis of information contained in a prospectus unless the summary, when read with the prospectus taken as a whole is misleading, inaccurate or inconsistent or does not provide key information such as the risks associated with the investment. B.The summary can cross refer to other parts of the prospectus and may incorporate information by reference. C.The summary cannot normally exceed seven sides of A4 sized paper when printed. D.The summary must include a warning that any decision to invest should be based on a consideration of the prospectus as a whole. The content and format of the summary are governed by Article 7 of the Prospectus Regulation. Article 7 (11) provides that the summary shall not contain cross-references to other parts of the prospectus or incorporate information by reference. Note however that it is permissible to incorporate information by reference in other parts of the prospectus (see Article 19 Prospectus Regulation).This rule is designed to protect investors. As the Summary is often the only part of the Prospectus that investors (particularly retail investors) will read, it is important that it is a selfcontained document.  Option A is correct - see Article 11 (2) Prospectus Regulation and s90 (12) FSMA 2000.  Option C is correct - see Article 7 (3) Prospectus Regulation.  Option D is also correct - see Article 7 (5) Prospectus Regulation. Indicate whether the following statement is true or false. 'The only information required to be included in a prospectus is that prescribed by the Commission Delegated Regulation (EU) 2019/980 ("PR Regulaton") and the Prospectus Regulation Rules ("PRRs"). True False The PR Regulation sets out the minimum content requirement for prospectuses, but is subject to the overriding provisions of Article 6 of the Prospectus Regulation which provides that the prospectus shall contain the "necessary information". Where the UK is the home Member State s87A FSMA cross refers to Article 6 for the purpose of prospectuses to be approved by the Financial Conduct Authority. The PRRs mainly provide cross references or signposts to relevant provisions of the PR Regulation but also include some UK specific rules in respect of matters delegated to Competent Authorities of Member States under the Prospectus Regulation. Indicate whether the following statement is true or false. Under the Prospectus Regulation Rules ("PRRs") if the order of disclosure of items in the prospectus submitted for approval to the Financial Conduct Authority ("FCA") does not coincide with the order set out in the Annexes to Commission Delegated Regulation (EU) 2019/980 ("PR Regulation") a cross reference list must be provided to the FCA showing where such items can be found. True False This is provided by Art. 24 (5) of the Prospectus Regulation and PRR 3.1.3R to make it easier for the Competent Authorities of Member States (the FCA in the UK) to check compliance with the rules. In practice this is a task usually given to trainees.

A prospectus may either take the form of a single document or be drawn up in three separate parts, referred to in the Prospectus Regulation as a summary, registration document and a securities note. Indicate whether the following statement is true or false. A prospectus relating to equity securitities drawn up as a single document need not contain a summary. True False The three part format was designed to give greater flexibility. But even if the document is drawn as a single document (which remains the most popular method) it must still include a summary (See Art. 7 (1) Prospectus Regulation). Indicate 'yes' if you agree or 'no' if you disagree with the following statement. A prospectus approved by the Financial Conduct Authority for the purpose of making an offer of transferable securities to the public in the UK can generally be used to make a public offering of shares in any other jurisdiction including the United States. Yes No The mutual recognition or "passporting" provisions of the Prospectus Regulation only apply among member states of the EEA (see Art. 24 and 25 Prospectus Regulation). Cross border capital raising outside these areas usually involves separate registration and filing requirements unless there are exemptions available .In the US for example, a registration document may need to be approved by and filed with the Securities and Exchange Commission. When seeking a quotation on AIM for the first time a company will have to prepare an Admission Document in accordance with the London Stock Exchange's AIM Rules. In addition a Prospectus may also be required and the Admission Document will therefore have to comply with the FCA's Prospectus Regulation Rules as well. True or false? True False An Admission Document is required for a company seeking an AIM quotation by AIM Rule 3. The need for a Prospectus is determined by the Prospectus Regulation and section 85 FSMA 2000. If the offer of shares by the AIM company is a public offer in the UK, a Prospectus complying with s85 FSMA 2000 and Prospectus Regulation Rules will be required as well. In practice both will be contained in one document. The Phoneshop Plc has just published a prospectus in connection with an IPO of its shares and admission to trading on the Main Market of the London Stock Exchange in which it states that over 50% of its profits are derived from key contracts with two mobile phone operators. Prior to the commencement of dealings in shares it receives notice that the two mobile phone operators are terminating these contracts. Which one of the following is the company obliged to do in these circumstances? A. Withdraw the offer.

B. Reduce the price at which the shares are offered. C. Tell the London Stock Exchange that it does not propose to apply for the shares to be admitted to trading. D. Publish a supplementary prospectus. Although A and C are potentially also possible consequences, the company will be obliged to publish a supplementary prospectus. Under Article 23 of the Prospectus Regulation every "significant new factor, material mistake or inaccuracy" a relating to the information included in a prospectus which may affect the assessment of the securities and which arises or is noted between the time the prospectus is approved and closing of the offer period or the time trading on the regulated market begins, whichever is the later, must be included in a supplementary prospectus without undue delay. A supplementary prospectus containing details of the new factor, mistake or inaccuracy has to be approved by the competent authority (FCA in this case) within five working days and published in the same way as a prospectus. On publication of the supplementary prospectus investors who have already agreed to buy shares have a right of withdrawal under Art. 23 (2) Prospectus Regulation. Which one of the following statements about the process of verification is true: A. The verification process is usually conducted by the issuer's lawyers and reviewed by the investment bank's lawyers. B. Verification is the process of checking the statements in a prospectus done primarily for the protection of the lawyers who drafted it. C. Verification is commenced as early as possible in the IPO process, often before the prospectus itself has been produced. D. Verification should always involve a line by line analysis of the prospectus by all of the directors of an issuer with full verification notes. B is incorrect because the process of verification is largely for the benefit of an issuer and its directors who will assume responsibility for the prospectus. C is incorrect because verification cannot begin until the prospectus has been produced and will not usually begin until it is at a relatively advanced stage. With regard to D, verification may involve a line by line analysis by all of the directors but this will not always be the case. It is not always practicable to involve each director in every aspect of the verification process. It is for an issuer and its advisers to together decide on a suitable model - at the extreme it may involve only a simple Q&A presentation. Under the Prospectus Regulation Rules ("PRRs"), documents required in connection with any prospectus that has to be approved by the FCA must be submitted for approval within minimum time limits prio...