Irish Stock Exchange Listing Rules: Sponsor Regime

Transcription

1 Irish Stock Exchange Listing Rules: Sponsor Regime Irish Stock Exchange Daryl Byrne, Aisling McArdle & Orla O Gorman Mason Hayes & Curran Justin McKenna & Ciaran Healy 21 September 2016

2 FCA Listing Rules & ISE Listing Rules

3 Recent Market Activity Key Entrants to Irish Equity Markets - Permanent TSB Group Holdings plc (2015 MSM) - Irish Residential Properties plc (2014 MSM) - Green REIT plc (2013 MSM) - Hibernia REIT plc (2013 MSM) - Applegreen plc (2015 MSM) - Hostelworld Group plc (2015 MSM) - Dalata Hotel Group plc (2014 ESM, now MSM) - Malin Corporation plc (2015 ESM) Notable Departures from Irish Equity Markets - Dragon Oil plc (2015 MSM) - Aer Lingus Group plc (2015 MSM) - Elan Corporation plc (2013 MSM) - ICON plc (2013 MSM) - Petroceltic International plc (2016 ESM)

4 Recent Market Activity 3500 Funds Raised on Irish Equity Markets ( m) Funds Raised on Irish Equity Markets

5 Irish PLCs The Irish PLCs that are relevant to UK firms for equity capital markets purposes are those listed on: i. London Official List and the Irish Main Securities Market ii. iii. iv. London Official List only AIM and the Irish ESM AIM only

6 Irish Companies with Dual Listing on UK Official List and Irish MSM Market Capitalisation as of September 2016 UK Official List and Irish MSM Aminex plc 80m Bank of Ireland Group 6.2bn C&C Group plc 1.2bn CRH plc 25.2bn Dalata Hotel Group plc 818m Datalex plc 259m FBD Holdings plc 243m Glanbia plc 5.1bn Green REIT plc 986m Hibernia REIT plc 951m IFG Group plc 207m Independent News & Media plc 187m Irish Continental Group plc 913m Kenmare Resources plc 346m Kerry Group plc 13.6bn Kingspan Group plc 4.5bn Paddy Power Betfair plc 9.1bn Permanent TSB Group Holdings plc 941m Ryanair Holdings plc 16.4bn Smurfit Kappa plc 5.5bn

7 Irish Companies with Single Listing on UK Official List and Irish MSM Market Capitalisation as of September 2016 UK Official List Only Cairn Homes plc 511.2m DCC plc 6.1bn Irish MSM Only Irish Residential Properties REIT plc 492m Grafton Group plc 1.2bn Greencore Group plc 1.5bn UDG Healthcare plc 1.6bn

8 Irish Companies with Dual Quotations on UK AIM and Irish ESM Market Capitalisation as of September 2016 UK AIM and Irish ESM Abbey plc 278m Allied Irish Banks plc 16.3bn Amryt Pharma plc 48m Applegreen plc 385m Conroy Gold and Natural Resources plc 5m CPL Resources plc 170m Donegal Investment Group plc 55m Fyffes plc 478m Great Western Mining Corporation plc 2m Karelian Diamond Resources plc 4m Mainstay Medical International plc 96m Merrion Pharmaceuticals plc 4m Mincon Group plc 152m Origin Enterprises plc 731m Ormonde Mining plc 14m Ovoca Gold plc 11m Petroneft Resources plc 17m Providence Resources plc 72m Total Produce plc 521m Zamano plc 13m

9 Irish Companies with Single Quotations on UK AIM and Irish ESM Market Capitalisation as of September 2016 UK AIM Only Irish ESM Only Circle Oil plc 3.5m Connemara Mining Company plc 1.5m Escher Group Holdings plc 31.2m Kibo Mining plc 22.9m Minco plc 5.7m Norish plc 11.1m Petrel Resources plc 6.1m REACT Energy plc 2.8m San Leon Energy plc 29.4m Malin Corporation plc 549m

10 Divergences between FCA and ISE Sponsor Regimes Relevant Area Appointment of a Sponsor FCA LISTING RULES Prescriptive list application for admission which requires the production of a prospectus, on each occasion it produces a Class 1 circular and other occasions such as reverse takeovers and related party transactions LR 8.2.1R and 8.2.3R ISE LISTING RULES Initial application and duration of listing LR Role of a Sponsor come to a reasonable opinion, after having made due and careful enquiry, that the applicant has satisfied all [requirements for listing] LR 8.4.2R satisfy itself, to the best of its knowledge and belief, having made due and careful enquiry of the issuer and its advisers, that the issuer has satisfied all [requirements for listing] LR Principles for Sponsors act with due care and skill and at all times deal with the FCA in an open and cooperative way and deal promptly with any enquiries it makes LR 8.3.3R and 8.3.5R act with due care and skill and ensure the issuer is properly guided and advised LR Duty to Directors the Sponsor must take reasonable steps to satisfy itself that the [directors] of the listed company understand their responsibilities and obligations LR 8.3.4R Sponsor must be satisfied that the directors of the issuer have had explained to them by the Sponsor or other appropriate professional adviser the nature of their responsibilities and obligations as directors LR 2.2.3

11 Divergences between FCA and ISE Sponsor Regimes Relevant Area FCA LISTING RULES ISE LISTING RULES Joint Sponsors Duty to cooperate and share information LR R and R Duty to establish which Sponsor has primary responsibility and notify ISE LR and Appointment of an Agent Prohibited LR R May appoint an agent at its discretion if agent has sufficient experience and notified to ISE LR and Disciplinary Action Public censure Cancellation Suspend/restrict Sponsor for 12 months Unlimited financial penalties Private or public censure Cancellation LR R / Financial Services and Markets Act 2000 (s.88) LR and 2.5.7

12 Divergences between FCA and ISE Sponsor Regimes Relevant Area FCA LISTING RULES ISE LISTING RULES Financial Position and Prospects Sponsor has come to a reasonable opinion, after having made due and careful enquiry, that the directors of the [issuer] have established procedures which provide a reasonable basis for them to make proper judgments on an ongoing basis as to the financial position and prospects of the applicant and its group LR 8.4.2R(4) Sponsor must obtain written confirmation from the issuer that the directors have established procedures which provide a reasonable basis for them to make proper judgements as to the financial position and prospects of the issuer and its group and be satisfied that this confirmation has been given after due and careful enquiry by the issuer LR Working Capital Sponsor has come to a reasonable opinion, after having made due and careful enquiry, that the directors of the [issuer] have a reasonable basis on which to make the working capital statement i.e. that it and its subsidiaries (if any) have sufficient working capital available for the group's requirements for at least the next 12 months LR 8.4.2R(5) (LR R) Sponsor must report to the ISE that it has obtained written confirmation from the issuer that the working capital available to the group is sufficient for its present requirements, that is for at least the next 12 months and it is satisfied that this confirmation has been given after due and careful enquiry by the issuer LR

13 Sponsor Comfort Letters Irish Market Practice Company Comfort Letter to Sponsor(s) Issue General Irish Market Practice Knowledge qualification? Yes. Generally based on a standard of to the best of the Company s knowledge and belief having made due and careful enquiry and sometimes on the basis of advice provided to us by [our lawyers], yourselves and the Company s other advisers. Director understanding (i) (ii) (iii) has received a copy of the memorandum; has had an opportunity to discuss any matters with the relevant law firm; and each director has confirmed through the responsibility statement that he has read and understood the memorandum. No Significant Change Yes. Not required under the ISE LR but general market practice is confirmation of no significant change in the financial or trading position of the Group since the last audited balance sheet (in accordance with statement in the Prospectus). Proper Extraction Yes. Not required under the ISE LR but general market practice is confirmation of financial information contained in the Prospectus which relates to the Group has been properly extracted from the Group s accounting records.

14 Sponsor Comfort Letters Irish Market Practice Lawyers Comfort Letter to Sponsor(s) Issue General Irish Market Practice Knowledge qualification? Confirmation General qualifications Exclusion of Liability No (usually). (i) (ii) nothing has come to [our] attention which is not disclosed in the Prospectus and which [we] consider is required to be drawn to your attention; [we] have supplied each director with a copy of the memo; and (iii) [we] have explained to the directors their responsibilities, obligations and potential liabilities and made ourselves available to discuss the memo and responded to any such queries. (i) (ii) have not made any specific enquiries of the Company, its directors, employees or other representatives; scope of the letter is limited to matters which are customarily the responsibility of the Company s Irish legal advisers in that context; (iii) the letter contains no opinion as to the suitability for listing of the shares; and (iv) the letter is given in [our] capacity as Irish legal advisers only. Yes. Inclusion of reference that the letter is given by way of comfort only and that [we] accept no liability in relation to the contents of the letter.

15 Key Takeaways Irish equity markets have been reinvigorated in recent years Irish market practice guided by and to a large extent follows UK market practice but there are important differences There are no technical guidance notes for Sponsors so a lot of knowledge resides with existing Sponsors and other advisers Placing/Underwriting Agreements are generally governed by English law

16 Mason Hayes & Curran Contacts Justin McKenna Partner d e jmckenna@mhc.ie Ciaran Healy Partner d e chealy@mhc.ie

17 Sponsoring Transactions on the ISE 21 September 2016

18 ISE Overview

19 ISE: Markets MAIN SECURITIES MARKET MSM ENTERPRISE SECURITIES MARKET ESM GLOBAL EXCHANGE MARKET GEM ATLANTIC SECURITIES MARKET ASM

20 ISE: Equity Issuers International Profiles 67% 89% 81% 86% INTERNATIONAL SHAREHOLDER BASE DUAL LISTED INTERNATIONAL EMPLOYMENT INTERNATIONAL REVENUE

21 ISE Sponsor Regime

22 Securities Regulation in Ireland Irish Stock Exchange Central Bank of Ireland Competent Authority for Listing Listing Rules Sponsor regime Prospectus Transparency Market abuse

23 Role of an ISE Registered Sponsor 1. Conditions for listing 2. Document submission 3. On-going advice 4. Liaise with ISE

24 ISE & FCA Sponsor Regimes Sponsor requirements Irish Stock Exchange Financial Conduct Authority Scope Listing Rules Listing Rules Which issuers? All Premium listed only When required? Throughout listing Specified occasions Eligibility requirements On-going requirements Supervision Transaction experience Eligibility and disclosure ISE monitoring Competence & systems and controls Eligibility and disclosure Monitoring / supervisory visits

25 Becoming a Sponsor - Criteria Firm Executive Eligibility

26 Becoming a Sponsor - Process Application ISE reviews ISE approval Admission

27 On-going Requirements Eligibility Disclosure Annual Confirmation

28 Sponsoring Transactions on the ISE

29 Sponsor Responsibilities IPO 1. Ensure independence 2. Advise on the application of the LRs 3. Liaise between the ISE and the company 4. Confirm eligibility of the company 5. Report on working capital 6. Ensure the applicant has appropriate financial reporting procedures 7. Provide confirmation that the LR have been complied with

30 Sponsor Responsibilities Transactions 1. Ensure independence from the transaction 2. Advise the company on the application of the LRs 3. Liaise between the ISE and the company 4. Report on working capital

31 Future Developments

32 Future Developments Update of ISE sponsor regime Consideration of fast-track route for FCA approved sponsors Consultation on proposals (Q4, 2016 / Q1, 2017)

33 ISE Delivering Issuer Choice

34 Dual Listing Ireland / UK Streamlined documentation / Listing Rules Reporting and governance Euro quotation (or sterling if preferred ) Fungible and efficient trading Internationally connected A seamless, complementary ISE/European quotation with the following benefits for issuers: Access to European fund managers with mandates to invest in companies quoted on a European exchange Increased sales, research and trading support from European sell-side Increased market visibility, branding and profile

35 BREXIT WHAT WILL THE IMPACT BE? Awaiting clarity Questions over EU securities legislation and ability to passport securities in Europe How can issuers insure / mitigate against this risk?

36 BREXIT OUR ISSUERS VIEW We have a dual listing on the Irish and London Stock Exchanges. This together with our focused operating model helps to provide a degree of balance to the risks associated with the UK s decision to leave the EU. C&C Trading Statement 7 th July 2016

37 QUESTIONS NOW OR IN THE FUTURE Orla O Gorman Head of Equity orla.ogorman@ise.ie Daryl Byrne Head of Regulation daryl.byrne@ise.ie Aisling Mc Ardle Regulation Manager aisling.mcardle@ise.ie