Public Companies

Well done. The obligation to notify the FCA is under LR 9.2.23R, but to answer this correctly you need to refer back to LR 6.14.3R which expressly covers directors, persons connected with directors and persons entitled to nominate directors (Options A, B and C). "Major" shareholdings are also excluded. The threshold for this purpose however is set at 5% (LR 6.14.3 R (1) (e)) rather than the 3% threshold in DTR 5.1.2R

To be listed securities must have any necessary statutory consents (LR
2.2.2R). The FCA will not list on a conditional basis. Therefore PALs
cannot be posted and trading in the nil paid rights commence until the
shares have been authorised. The earliest date is therefore C.
Wrong answers: A, B and D – see correct answer.

The correct answer is A. Under the IA Share Capital
Management Guidelines, authority to allot up two thirds of issued share capital will be
regarded as routine provided any amount in excess of one third is used for fully preemptive rights issues only

A sufficient number of the company's shares must, by the time of admission, be distributed to the public.

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.

The three offences described in A,C and D are set out in s52(1) and (2) CJA.
Note that, unlike market abuse, these offences can only be committed by an
individual, although a company may be guilty of aiding and abetting an offence.

Correct. The Code is not mandatory but contains recommendations. Under Listing Rule LR 9.8.6R (5) and (6) however, the company must "comply or explain"; that is it must comply with the Code (and explain how it has done so) or explain where it has not complied and why. Failure to give such an explanation would itself be a breach of the Listing Rules. Note also the requirement under DTR 7.2 to include a corporate governance statement in the directors' report.

AIM is an "MTF" or "Multilateral Trading Facility".The LSE's Main Market is a "regulated market".

The answer is 10 business days (LR 9.5.6R). Note the definition of
"business days" in the Glossary.
Note that the statutory period under s562 (5) CA 2006 is 14 days. This is therefore
usually the same as the Listing Rules requirement.

A "related party transaction" means a transaction between a listed company and a
related party (LR 11.1.5R).
A "related party" includes a "substantial shareholder" and an "associate" of a
substantial shareholder.
A "substantial shareholder" is defined as one able to control 10% or more of the voting
rights. Graham owns 12.5% of the voting shares of Brakes. He is therefore
a "substantial shareholder".
An "associate" is defined for this purpose as including a body corporate of which a
director owns 30% or more of the equity share capital (see LR Appendix 1.1). Graham
owns the whole of the issued share capital of Firestone and it is therefore an associate
of his, although in this case the related party transaction is between the listed company
(Brakes) and the related party (Graham).

Yes - that is correct. The statement is true - see Treasury Regulation: Articles 7 and 8 of Commission Delegated Regulation EU 2016/522, implemented in UK law pursuant to Article 19 (13) MAR for details of what such a request should include.

Both companies are within the scope of UK MAR, Article 17. The
takeover discussions are clearly “inside information” (they satisfy the
criteria in Article 7 UK Market Abuse Regulation). Delaying the public
disclosure of inside information is possible provided all the conditions in
Article 17 (4) are met (Option D).
Wrong answers: A, B and C – see correct answer.

Subject to the resolutions being duly passed at the General Meeting , the PALs will
be posted to shareholders immediately afterwards.
Admission and commencement of dealings in the nil paid rights will take place the
following day.
If no General Meeting is required then the whole process will be shortened by the
length of time required to convene the meeting, and PALs can be posted at the same
time the prospectus is sent out.

C is incorrect advice. A is correct advice since UK MAR, Article 19 (11) only applies to PDMRs and not those closely associated with them - contrast disclosure obligations under Article 19 (1). B correctly states the standard commercial practice/contractual provisions for PDMRs. C is incorrect since not all senior executives will be classed as PDMRs - see Article 3 (1) (25) UK MAR for the further requirements needed - and because s91 FSMA 2000 does not apply to breaches of UK MAR. D is correct - see Article 19 (1) UK MAR.

The correct answer is B.
The Listing Rules do not apply to AIM companies. They do not have to follow the UK
Corporate Governance Code but must state which "recognised code of corporate
governance" they intend to apply.

The Listing Rules definition of 'rights issue' can be found in LR
App 1.1.

See s560 CA 2006.

The definitions section of UK MAR (Article 3) doesn't contain a definition of
the generic term "market abuse". However Recital (7) and Article 1 UK MAR make it
clear that for the purpose of the regulation the term should be understood as referring
to insider dealing (Article 8), the unlawful disclosure of inside information (Article 10)
and market manipulation (Article 12).

AIM is a UK MAR regulated trading venue. AIM Rule 21 includes a
requirement for a code of dealing but compliance with this does not affect
the obligations under UK MAR, Article 19 (see Guidance Notes to AIM
Rules).
Wrong answers: A, B and C.

The rule in LR 9.5.6R only applies to premiumlisted companies. Standard listed companies are subject to the time limits in the
Companies Act 2006 ("CA 2006"). Given that the offer will be made on a pre-emptive
basis s562(5) CA 2006 applies and the offer must remain open for at least 14 days.
Note that s360 CA 2006 does not apply to this provision and so it is simply 14 days and
not 14 clear days.

Correct, as set out in Article 18, UK MAR

That's right. See the Guidance Note to Condition 2.1 of the Admission and Disclosure Standards. See also the counterpart requirements of Listing Rule 2.2.3Rwith regard to admission to listing.

Well done - option B is incorrect. 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 self-contained 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.

Where directors are generally authorised to allot shares the pre-emption rights may be
disapplied by special resolution under s570 CA 2006 (Option A).
In order to raise £75 million at 37.5p per share the company would need to issue 200
million new ordinary shares. It only has authority to allot up to 165 million shares of 20p
each. It will therefore need to increase that authority by ordinary resolution to cover the
requisite number of shares (Option D).
Although s570 CA 2006 does permit directors to disapply pre-emption rights where
they have been generally authorised to allot shares through a provision under the
articles (Option C), this would require a special resolution to alter the articles; in
practice this approach is seldom taken by public companies because of institutional
pressure to renew such powers annually at the AGM (see the Investment Association
Guidelines on Share Capital Management).
It is impractical to seek a waiver of s561 from all the shareholders of a quoted
company (Option B).

Listing and Premium Listing Principles (LR 7.2.1R and 7.2.1AR) both
apply to premium listed companies. Option A is not a requirement of
either.
Wrong answers: B: see Listing Principle 1; C: see Premium Listing
Principle 5; D: see Premium Listing Principle 6.

A, B and C are correct. It should be clear that
opting for the Gazette Route/ignoring the fractions and rounding down entitlements
saves time since there is no need for a general meeting to deal with fractions or
excluded overseas shareholders. However, the company may decide to aggregate the
fractions and sell them in the market place as Nil Paid Rights for the company’s
benefit, thus raising more money for the company. This option is not pre-emptive, so
pre-emption rights will need to be disapplied at a general meeting, which will make the
process longer.

That is correct. The correct answer is B, D and E. 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.

The relevant requirements are set out in Article 18, UK MAR.
With regard to statement C, this is not an explicit requirement of Article 18 UK MAR,
but in view of the responsibility placed on the company, it is probably good practice.
In respect of statement D, note that Article 18 (2) UK MAR explicitly places
responsibility firmly on the issuer for the maintenance of insider lists and not its
agents or advisers.

The test is whether the information is of a kind which a reasonable investor would be
likely to use as part of the basis for his investment decision (Article 7 (4) UK MAR).
See also the guidance in the Disclosure Guidance and Transparency Rules at DTR
2.2.4G - 2.2.6G on the interpretation of the "reasonable investor" test.

Well done - 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.

Well done.
Feedback: 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', on the other hand, 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) and the restrictions on private companies offering their shares to the public (s755 CA 2006).

That's right, the statement is 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) UK Prospectus Regulation).

Applying the class tests, if any of the percentage ratios are 25% or more, the
transaction will be classified as a Class 1 transaction (LR10.2.2R (3)).
Applying the profits test produces a percentage ratio of 40.9%. The consideration
test produces a ratio of 23.8%.
Note that when applying the class tests it is the size of the transaction relative to that
of the listed company (not the other way round) that is used to measure the ratio.
There is no evidence that the transaction involves a "related party" (option B) for
either company.

That is correct. There is no minimum percentage requirement for shares in public hands or minimum trading period required in order for a company to join AIM.

D is the rght answer.
This is a transaction for Naivasha plc. The profits test produces a percentage of 4%
(£1m/£25m x 100). The consideration test produces a percentage of 13.3% (£60m/
£450m x 100 (450m = 90m shares x £5)). As a result of only the consideration test
being over 10% this is a substantial transaction for Naivasha plc under AIM Rule 12
and it must issue a notification of the transaction. The AIM Rules do not require an
ordinary resolution of the shareholders. It is not an RPT as the sale is not to the
directors.

You have correctly applied the definition of 'reverse takeover' in the
Listing Rules (LR 5.6).

Insiders are defined in UK MAR, Article 8 (4).
There is no suggestion on the facts that Lucas is a director of Innov8 or otherwise
involved with the company, or that he is engaged in criminal activity.
He could, however, reasonably be expected to know that information about the slump
in profits was "inside information" - after all, his friend is the company's finance
director (final paragraph of Article 8 (4)).
See also Recital (26) UK MAR: "In this respect, the competent authorities should
consider what a normal and reasonable person knows or should have known in the
circumstances"

Here George has not dealt in the shares himself but is probably guilty of recommending
or inducing his friend Lucas to engage in insider dealing (Article 14 (b)) as well as
unlawful disclosure of inside information (Article 14 (c)) - assuming in either case that
the information meets the criteria of "inside information". However, it is perhaps
questionable whether the regulator, the FCA, would pick up on George's behaviour,
unless it was 'tipped off'.

The right answer is B. Assuming that all conditions have been met, section
307A(1)(a) of the Companies Act 2006 provides that the notice period for shareholders
of a listed company to vote on special resolutions at a General Meeting (not an AGM)
is at least 14 days. Note also that section 360 of the Companies Act 2006 requires that
the GM notice period is in clear days.

See Article 7 (11) UK Prospectus Regulation.
Wrong answers: A – not more than 7 sides; C – requirement of the
Registration Document and Securities Note (Item 1.1, Annex 1 and Item
1.1. Annex 11 PR Regulation); D – risk warnings are also required under
each of the headings referred to Article 7 (4) (b) (c) and (d).

Correct - 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.

That is correct. C is the correct answer. See AIM Rule 21. The restrictions on dealings by persons discharging managerial responsibility ("PDMRs") during "closed periods" (as defined in UK MAR, Article 19 (11)) must be complied with in any event. AIM Rule 21 is a separate and independent requirement for AIM quoted companies to have in place a dealing policy for directors and "applicable employees" (defined by reference to the definition of PDMRs in UK MAR) setting out the processes and procedures to be followed when dealing in their company's AIM securities.

That is correct. Both AIM Rule 11 and Article 17 UK MAR apply to an AIM company. Note that although there is some common ground between the two, compliance by an AIM company with Rule 11 will not necessarily mean that it has met its obligations under Article 17 UK MAR and vice versa. The remainder apply only to listed companies

Well done, all your answers are correct. You have correctly spotted the relevant provisions in the UK Corporate Governance Code, namely: A Chairman and Chief Executive: Section 2 (Division of Responsibilities), Provision 9. C Board Committees: Remuneration: Section 5 (Remuneration), Provision 32; Audit: Section 4 (Audit, Risk and Internal Control, Provision 24; Nominations: Section 3 (Comp osition, Succession and Evaluation), Provision 17. E Appointment of senior independent director: Section 2 (Division of Responsibilities), Provision 12. For quoted companies the requirement to publish directors' remuneration (B) derives principally from s420 CA 2006; the restrictions on PDMR's dealing in their own company's shares (D) are derived principally from Article 19 of the UK Market Abuse Regulation although companies may also have their own code of dealing.

The IA guidelines were amended following the report of the Rights Issue Review Group
in the wake of the 2008 financial crash when companies had to raise large amounts of
new capital to repair their balance sheets, so as to permit companies to issue a further
one third of their issued share capital (previously restricted to one third) in connection
with a rights issue made on a fully pre-emptive basis.

Well done. Row A is incorrect - the correct answer should be six months. The correct matches and relevant authorities can be found in the Disclosure Guidance and Transparency Rules and the Companies Act 2006 as follows:

A - DTR 4.1.3R

B - s442 (2) (a) CA 2006

C - DTR 4.2.2R (2)

D - s442 (2) (b) CA 2006

The UK Market Abuse Regulation applies to "financial instruments" admitted to
trading on one of the trading venues prescribed by UK MAR irrespective of
whether the dealing takes place on or 'off market'. This is expressly provided
by Article 2 (3) of UK MAR.
In practice, of course, market abuse is most likely to be discovered if the
dealing takes place on one of the trading venues prescribed by UK MAR.

The shares will be issued at a 40% discount to the market price: 160p
x 40% = 64p discount
160p less 64p discount = 96p issue price
To Raise £765m £765,000,000 = 796,875,000 new shares needed
£0.96 issue price

The correct answer is C. The obligation to notify dealings under Article 19
(1) UK MAR operates independently of the restriction on dealings imposed by Article
19 (11). Therefore, PDMRs and their close assoicates must notify dealings in the
shares of the listed company regardless of the position under Article 19 (11). A PDMR
might forget to ask for clearance but this would not affect the PDMR’s obligation to then
notify the company of a dealing in its shares.

That's right - C is correct. 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.

See Article 24 (5) PR Regulation and PRR 3.1.3 R.
Wrong answers: A – see correct answer; C – approval of the prospectus is
by the Financial Conduct Authority; D – see correct answer.

'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.

That's right. The statement is false. The relevant rule is Article 19 (11) of the UK Market Abuse Regulation. This prohibits dealings by PDMRs in their company's shares or debt instruments during a "closed period" which refers to the period of 30 days prior to the announcement of an interim or year end financial report. The PDMR may of course be in possession of "inside information" and therefore liable to commit the civil offence of insider dealing if he/she buys or sells shares during such period.

The statement is false.
Both types of secondary issue are made to existing holders in proportion to their
existing holdings.
The main difference is that a rights issue is made using a renounceable letter, which is
a negotiable instrument that can be traded 'nil paid' for a period before payment for the
shares or other securities is due; an open offer is made using an application form that
cannot be dealt with in this way.

Yes, you are right. You have correctly applied LR 9.6. Option E is not a requirement of the Listing Rules, but under s856 CA 2006 a list of shareholders must be included in a company's annual return which has to be filed with the Registrar of Companies.

They all apply.
A is a restriction imposed by Article 19 (11) of the Market Abuse Regulation
("MAR")
B is required by Article 17 MAR
C is required by Chapter 10 Listing Rules for a premium listed company and AIM
Rule 12 for an AIM company
D is required by Chapter 8 Listing Rules for a premium listed company (sponsor)
and AIM Rule 1 for an AIM company (Nomad)

Yes, that's right. "RIS" stands for regulated information service RNS is the name of the RIS provided by the London Stock Exchange, but there are a number of other approved RISs including Business Wire and First Sight. You will find a list of them on the FCA website. SIPs (or secondary information providers) take information from an RIS and repackage it. They are not approved by the FCA but include a number of well known organisations such as Bloomberg and Reuters. An RIS does not need to be FCA-approved. If can be approved by another EEA Member State or if not approved it must comply with DTR 6.3.3BR

Under Article 18 (6) UK MAR, companies with shares admitted to an "SME growth market" are exempt from the requirement to draw up insider list. AIM was registered as a SME growth market on 3 January 2018 (see Introduction to the AIM Rules). The exemption however is subject to the conditions mentioned in Article 18 (6) (a) and (b). Article 18 (6) (b) provides that the issuer must be able to provide the competent authority (FCA in the UK) upon request with an insider list. Option A - Article 18 (2) clearly states that where another person acting on behalf of the issuer takes responsibility for drawing up and updating the insider list, the issuer remains fully responsible for complying with the Article. Query, what is the position of the person acting on its behalf if there is a failure to comply? Option B - see Article 18 (5). Option C - see Article 18 (2) first paragraph

The answer is false. The notification has to be made in the form prescribed by FCA Technical Standard: Commission Implementing Regulation (EU) 2016/523 made pursuant to Article 19 (15) UK MAR. You can find copies of these forms on the FCA website

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. They are separate and independent requirements. 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. The equivalent provisions under FSMA 2000 are s85 (1) and s85 (2).

The authority is contained in s562(3) CA 2006.

That is correct. See Listing Rule 2.2.3R and the definitions of "admission to trading" and "RIE".

The correct answer is A. The shareholder can renounce their entitlement
and trade the shares as Nil Paid Rights. Only at the end of the offer period will
payment for the shares become due, when the person ultimately holding title to the
PAL will have to pay up to the company: hence fully paid rights.

That's right - well done. The term "person closely associated" is defined in Article 3 (1) (26) UK MAR. This refers to a spouse or a partner considered to be equivalent to a spouse in accordance with national law; Civil partners (option A) are included by virtue of s131AC (1) Financial Services and Markets Act 2000; similarly, the meaning of "dependent child" (option D) in Article 3 (1) (26) (b) UK MAR is to be determined in accordance with national law and under s131AC (2) FSMA 2000. This means a child under the age of 18 who is unmarried and does not have a civil partner. Option B would be a person closely associated with Martin by virtue of it being a company controlled by Martin (Article 3 (1) (26) (d) UK MAR).

Correct - the statement is 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". Section 87A 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 in clude some FCA specific rules in respect of matters delegated to the FCA under the Prospectus Regulation

An ex-director may still be a "related party", as may an "associate" of an ex-director - see Listing Rules 11.1.4R (2) and (5).

D is a Chapter 6 LR requirement (LR 6.4.1R) applicable only to
companies seeking a premium listing of equity shares.
Wrong answers: A, B and C are all Chapter 2 LR requirements applicable
to all applicants (LR 2.2.3R, 2.2.7R and 2.2.9R).

The Statement of Principles permits an additional 5%
disapplication for an acquisition or specified capital investment. See Part 2A, paras
1-4 for further detail.

LR 10 Annex 10G allows the Financial Conduct Authority to substitute other tests
where appropriate.

Under Article 8 UK MAR, the offence of insider dealing is committed where a person
possesses inside information and uses that information for the purpose of buying or
selling financial instruments to which that information relates. It would of course first be
necessary to establish that the information about the first half profits meets the test of
"inside information" (Article 7).
Option B: Articles 10 and 14 (c) establish the offence of unlawful disclosure of inside
information - no indication on the facts that George has disclosed inside information to
another person.
Option C: Article 14 (b) prohibits recommending or inducing another person to engage
in insider dealing.
Option D: Articles 12 and 15 deal with the offence of market manipulation, which does
not seem to be relevant on the facts.

The “comply or explain” provisions of LR 9.8.6R (5) and (6) which apply to
UK premium listed companies are extended by LR 9.8.7R to overseas
companies with a premium listing.
Wrong answers: A: see LR 9.8.6R (5) and (6); B: See LR 9.8.7R; D: the
UK CGC applies to all premium listed companies although there are some
modified provisions for “smaller companies” below the FTSE 350 level.

A, C and D will all necessitate a general meeting in order that
shareholder approval can be obtained for: A - new authority to allot; C - the class one
transaction; D - the related party transaction. B - making the offer via the Gazette
Route - would avoid the need for a general meeting to disapply pre-emption rights in
relation to overseas shareholders and enable it to round down fractional entitlements to
the nearest whole number.

For A, see Listing Rule 13.3 and
13.6;

For C see Listing Rule 13.6.1R(5);

For D, see Listing Rule
13.6.1R(4).

That's right. 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.

The statement is false. Under LR 9.3.11R, holders of "equity shares" in
a premium-listed company only are entitled to be offered "equity securities" on an issue
of "equity securities". Under the statutory pre-emption right (s561 CA 2006) holders of
"ordinary shares" are entitled to be offered "equity securities" on a pre-emptive basis.
The Listing Rules definition of "equity securities" however is narrower than the s560 CA
2006 definition of "equity securities" in that it doesn't include rights to subscribe for
ordinary shares.

That's right - the correct answer is C.
Market price 380p x 35% = 133p discount
380p less discount of 133p = issue price of 247p
Funds required £988,000,000 = 400,000,000 new shares required
£2.47 issue price

Well done. This is provided by Art. 24 (5) of the PR Regulation and PRR 3.1.3R to make it easier for the FCA to check compliance with the rules. In practice this is a task usually given to trainees.

Both regimes use the same terms but they are defined differently althought there are
similarities. Compare ss56 and 57 CJA with Article 7 and Article 8 (4) UK MAR.
An "insider" for the purpose of the CJA for example, must know that the information is
inside information; this is not always the case for the purpose of an "insider" in
relation to market abuse.

Listing Rule 10.5.1R sets out the relevant requirements.

Refer to Listing Rule 11.1.4R (5) and the definition of "associate" in
Listing Rules Appendix 1.1

The factory development (D) would normally be a matter for the
board to decide.

AIM is classified as an “SME growth market” (see Introduction to the AIM
Rules). The company is therefore entitled to the exemption in Article 18
(6) UK MAR but must be able to produce an insider list on request by the

FCA.
Wrong answers A, C and D

That is correct. D is the best statement of advice. AIM Rule 17 (option A) requires disclosure of relevant changes in the holdings of significant shareholders. Article 19 UK MAR (and UK MAR generally) applies to multilateral trading facilities (or "MTFs") which includes AIM quoted companies. The obligation under UK MAR, Article 19 (1) only applies once transactions totalling more than EUR 5000 in value have been reached in a calendar year (Art. 19 (8)).

That's correct. The definition is in Article 7 UK MAR.

Both the offer to the public and the application for admission to trading are
exempt from the obligation to publish a prospectus. Offer to the public (Art
3 (1) UK Prospectus Regulation) exempt under Art. 1 (4) (a) (“Qualified
investors only”) and Art. 1 (4) (b) (fewer than 150 persons in the UK, other
than qualified investors). Admission to trading (Art 3 (3) exempt under Art.
1 (5) (a) UK Prospectus Regulation (securities amount to less than 20% of
securities already admitted to trading over the last 12 months)
Wrong answers: B – exempt from admission to trading - see above.; C –
an “offer of securities to the public” as defined in Art. 2 (d) UK Prospectus
Regulation may include a placing but that is not the reason for the
exemptions – see above; D – the offer to the public is exempt on the basis
of Art. 1 (4) (a) and 1 (4) (b) – see above. Exemptions may be combined
(Art. 1 (6) UK Prospectus Regulation).

They are all characteristic features of the PAL
except C.

That's right. The mutual recognition or "passporting" provisions of the EU version of the Prospectus Regulation only apply among Member States of the European Union (see Art. 24 and 25 EU Prospectus Regulation). Since the UK left the EU on December 2020 these provisions no longer apply to UK prospectuses approved by the FCA (see the UK version of the Prospectus Regulation). Cross border capital raising outside the UK 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

The statement is false. The FCA considered instating such a rule but decided against doing so on the basis it might create a two tier system with the requirements under MAR Article 19. Contrast the position under the AIM Rules (see previous question). There is of course nothing to prevent a listed company from putting in place its own dealing code, subject to compatiblity with MAR. In practice that is what they do.

See in particular:
A (Section 73A FSMA 2000).
B (PR Regulation and Prospectus Regulation Rules (PRR App 2)).
C (Article 3, UK Prospectus Regulation and s85 FSMA 2000).
D (Chapters 2 and 6 Listing Rules).
E (Article 1, UK Prospectus Regulation).
F (Admissions and Disclosure Standards, particularly Section 2 and 3).

That's right. 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.

That is correct. 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 UK 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.