[Last updated: 1 August 2024, unless otherwise noted]

ESCC category

There are no jurisdictions of incorporation or industries that would not be acceptable for a listed company. There is no difference in financial requirements between a foreign company and a domestic company.

The expected aggregate market value of all securities of an issuer proposed to be listed must be at least £30 million (approximately US$38.20 million) for shares to be eligible for listing and £200,000 (approximately US$254,640) for debt securities to be eligible for listing. The new UKLR do not require a company to confirm it has at least 12 months’ working capital, although working capital disclosures are still required in the prospectus. In addition, a company applying for listing must satisfy the FCA that it is not managed by a person outside that company's group and be able to demonstrate independence from any controlling shareholder(s).

A company with a dual class share structure is also eligible for an ESCC listing and is subject to less stringent conditions under the new UKLR than was previously the case. Weighted voting rights shares may now be issued, with no time-related sunset requirement, to a person who, at the time of admission to the ECCS category, was: a) a director; b) a natural person who was an investor in, or shareholder of, the issuer; c) an employee of the issuer; or d) a person established for the sole benefit of, or solely owned or controlled by, a person in a), b) or c). In addition, institutional investors who, at the time of admission to the ECCS category, were an investor in, or shareholder of, the issuer, are also permitted to hold enhanced voting rights, to ensure that they are not disincentivized from providing pre-IPO funding. However, for institutional investors and shareholders, there will be a 10-year sunset period attributed to their weighted voting rights shares. Where the issuer is a sovereign controlled company, weighted voting rights shares can also be issued to the sovereign controlling shareholder. Such holdings are not subject to any sunset period.

Enhanced voting rights are not exercisable in relation to votes to approve matters that could adversely impact holders of listed shares, such as:

• Employee share schemes, Long-Term Incentive Plans or discounted option arrangements.
• Share offerings and placings at a discount in excess of 10%.
• Share buy backs of 15% or more of the shares other than via a tender offer.
• A cancellation of listing or transfer to a different category of listing.

There are no specified ongoing financial maintenance requirements that a company (foreign or domestic) must meet after the initial listing. However, all companies must have a minimum of 10% of the class of shares to be listed distributed to the public. This is known as the minimum free float requirement. Shares are not considered to be in public hands if they are held directly or indirectly by a person with an interest in 5% or more of the shares, or by directors, persons connected with directors, trustees of any employees' share scheme or pension fund established to benefit the directors or employees or certain other categories of related persons or are subject to a lock-up period of more than 180 days.

Companies applying for an ESCC listing, regardless of where they are incorporated, must comply with the UK Corporate Governance Code, or if they choose not to comply with one or more provisions of the Code, explain and justify why they do not comply in their annual report and accounts. Listed companies must also offer pre-emption rights to existing shareholders (however these can be, and commonly are, disapplied with shareholder approval), as described below. Please also see section 5 below.

All companies applying for an ESCC listing must appoint a sponsor that has been approved by the FCA. The FCA maintains a list of these sponsors at https://marketsecurities.fca.org.uk/sponsorlist. The sponsor provides financial advice and is responsible for liaising with the FCA on the applicant company's behalf.

There is no requirement for an applicant company to conduct interviews with the LSE as part of the listing process. There is no requirement for listed companies to have or maintain a minimum number of security holders, although the FCA may cancel a company's listing should less than 10% (or any lower percentage agreed by the FCA) of the class of securities listed be in public hands according to the criteria described above. There is no requirement for listed foreign companies to have or maintain a minimum trading price for their securities, or for any shares to be placed into escrow (or otherwise be restrained from being traded, such as through lock-in or lock-up arrangements) in connection with the listing. However, on initial listing underwriters will typically require that the directors and major shareholders agree to a lock-up arrangement. There are no restrictions on the currency denomination of securities, or for securities to be settled within a particular clearing system or registered with a particular share transfer agent. However, all shares listed must be capable of electronic settlement under their terms and the company's constitution, and London listed shares are normally settled through CREST, the electronic settlement system operated by Euroclear UK & Ireland for UK securities. Please see section 9 below for more details.

Further listing requirements are as follows:

• An applicant company must be duly incorporated or otherwise validly established according to the relevant laws of its place of incorporation or establishment.
• An applicant company must be operating in conformity with its constitution.
• The securities to be listed must:
  • Conform with the law of the applicant company's place of incorporation.
  • Be duly authorized according to the requirements of the applicant company's constitution.
  • Have any necessary statutory or other consents.
• The securities to be listed must be freely transferable.
• Any shares to be listed must be fully paid.
• An application for listing of securities must, if no securities of that class are already listed, relate to all securities of that class. If securities of that class are already listed, the application must relate to all further securities of that class, issued or proposed to be issued.
• A prospectus will be required.

The requirements described in this section 2 do not vary from what would be expected of a domestic company, except that if the law of incorporation of a foreign company seeking an ESCC listing does not confer pre-emption rights on shareholders, then the company's constitution must do so, and the company must be satisfied that this is not incompatible with the laws in its country of incorporation.

The pre-emption rights concerned are as follows: a listed company proposing to issue equity shares for cash or to sell treasury shares that are equity shares for cash must first offer those equity shares in proportion to their existing holdings to:

• Existing holders of that class of equity shares (other than the listed company itself by virtue of it holding treasury shares).
• Holders of other equity shares of the listed company who are entitled to be offered them.

International Secondary Listing requirements

This category is aimed at non-UK companies with a recognized overseas listing, that wish to maintain a secondary listing in the UK without being subjected to the full (albeit much reduced) requirements of the new ESCC category. 

Non-UK companies with a former secondary listing on the standard segment were moved automatically to this category on 29 July 2024.

Though this new category largely replicates the former standard listing requirements, there are a number of additional eligibility requirements which apply to companies seeking a listing on this category:

• The applicant must be an overseas company, that is to say, a non-UK incorporated company, with 10% of its shares (excluding treasury shares) in public hands.
• New applicants must situate their place of central management and control either in its country of incorporation or in the country of its qualifying home listing (subject to any dispensation or modification to this requirement agreed to by the FCA). It is worth noting that the FCA intends to disapply indefinitely, this requirement for those companies transferred to this category from the former standard listing segment.
• The applicant must have a qualifying home listing where it is capable of being traded, and the application must relate to the same class of shares.

The FCA now also has the power to require confirmations from applicants regarding these requirements and may require the board to confirm that it is compliant and has at all times been compliant with the rules of the market of the qualifying home listing. The FCA may also, if an applicant's qualifying home listing is not in its country of incorporation, require an explanation of the reasons for establishing that listing elsewhere.

It has been confirmed by FTSE Russell that companies with shares admitted to the International Secondary Listing category will not be eligible for inclusion in the FTSE UK Index series. However, if a company with a secondary listing in London transfers from the International Secondary Listing category to the ESCC category, it will then become eligible for FTSE inclusion.