Equity securities Definition

GLOSSARY

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What does Equity securities mean?

The term is most commonly used in relation to ordinary shares in a company (or the rights to subscribe for, or to convert securities into, ordinary shares in the company) under CA 2006, s 560. In the context of the Listing Rules or the Prospectus Regulation Rules the term has a particular definition under the FCA Handbook which should be referred to as required. See also equity share capital.

View the related checklists about Equity securities

Listing requirements and continuing obligations—premium listing and standard listing—prior to 29 July 2024

Listing requirements and continuing obligations—premium listing and standard listing—prior to 29 July 2024 A significant restructuring of the UK listing regime came into effect on 29 July 2024 which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. The UK Listing Rules sourcebook came into force to implement the changes and the Listing Rules sourcebook was revoked. For further information see Practice Note: Reform of the UK listing regime—fundamentals. This checklist reflects the listing regime prior to 29 July 2024 and has been retained for reference purposes. This checklist compares the listing requirements and key continuing obligations that previously applied to a commercial company with a listing of equity securities on the premium and standard listing segments prior to 29 July 2024. Requirements for listing—prior to 29 July 2024...

Allotment of shares and disapplication of pre-emption rights—listed company—checklist

Allotment of shares and disapplication of pre-emption rights—listed company—checklist STOP PRESS: A significant restructuring of the UK listing regime came into effect on 29 July 2024, which included the removal of the premium and standard listing segments and the creation of a single listing category for equity shares in commercial companies. The commercial companies category is heavily disclosure-based and sits alongside other listing categories such as the shell companies, secondary listing and closed ended investment fund categories. A new UK Listing Rules sourcebook came into force to implement the changes and the previous Listing Rules sourcebook was revoked. For further information see Practice Note: Reform of the UK listing regime—fundamentals. This Checklist reflects the listing regime as it was prior to 29 July 2024. The allotment and issue of shares is governed by statutory rules, which differ according to the type of company which is proposing the allotment (private or public, listed or unlisted) and whether that company has a single or multiple classes of shares. This checklist sets out...

Open offers

Open offers This Practice Note focuses on the key aspects of open offers and the matters that require consideration when an open offer is being carried out by a company either: • admitted to listing on the official list (Official List) of the Financial Conduct Authority (FCA) and to trading on the main market for listed securities of the London Stock Exchange (LSE) (Main Market) (listed company), or • admitted to trading on AIM, a market operated by the LSE (AIM company) (both a listed company and an AIM company being a company). It does not cover placings or rights issues. For information on these transactions see Practice Notes: Placings, A guide to cash box placings, Rights issues—key considerations and Rights issue—procedure for a listed company. What is an open offer? An open offer is: • an offer made by a company to existing shareholders • to subscribe for or purchase new shares (or other securities) for cash • in proportion to their holdings, ie a...

The Prospectus Directive and the debt capital markets—introduction [Archived]

The Prospectus Directive and the debt capital markets—introduction [Archived] BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions [Archived]—Brexit planning and impact—key issues for debt capital markets transactions. ARCHIVED: This archived Practice Note is not maintained and...

Discover our 170 Practice Notes on Equity securities

Regulation D-Rule 506(d)-bad actor disqualification questionnaire (US IPO)

Regulation D-Rule 506(d)-bad actor disqualification questionnaire (US IPO) This Questionnaire is being furnished to you in connection with an offering (the Offering) of securities by [insert company name] (the Company), under the Securities Act 1933, Rule 506 (the Securities Act). Important Note: Please answer every question. If your answer to a question is ‘Yes’, please provide details in the explanation. Unless otherwise stated, your answers should be given as of the date you sign the Questionnaire. Some questions reference the 'date of the sale' of the securities, which is currently expected to be on or about [insert date]. If your answers to these questions change after the date you return the Questionnaire, you must notify the Company immediately. Please note that certain questions are necessarily broad in scope, so if you have doubts regarding whether something should be included in your response please err on the side of over-inclusion. The Company may have additional follow-up questions for you in connection with the Offering. Once you have...

List of documents—initial admission to and placing on AIM

List of documents—initial admission to and placing on AIM References to ‘AIM Rules’ are to the AIM rules for Companies, to ‘PRR’ are to the Prospectus Regulation Rules, to ‘DTR’ are to the Disclosure Guidance and Transparency Rules, to the ‘PR Regulation’ are to Retained Regulation (EU) 2019/980, to the ‘LSE’ are to the London Stock Exchange plc and to the ‘nomad’ are to company’s nominated adviser. Preliminary documents Document Responsibility Status List of parties Nomad Timetable Nomad List of documents Nomad Engagement letters Document Responsibility Status Nomad’s engagement letter Nomad Broker’s engagement letter Broker Reporting accountants’ engagement letter Reporting accountants Company’s solicitors’ engagement letter Company's solicitors Nomad’s solicitors’ engagement letter Nomad’s solicitors Printer’s engagement letter Printer Registrar’s engagement letter Registrar Public relations firm engagement letter Public relations firm [Competent person's engagement letter] [Competent person(s)] Key documents Document Responsibility Status Pathfinder admission document [and prospectus] All parties Final admission document [and...

Dive into our 35 Precedents related to Equity securities

Can a private company limited by shares carry out a rights issue?

Can a private company limited by shares carry out a rights issue? A rights issue is an offer of shares to existing shareholders of a company, which gives them the right to subscribe for additional shares in proportion to their existing shareholding in the shares of the company, eg, a right for each shareholder to subscribe for one new share for every five shares that they hold. The shares are usually offered to the existing shareholders by means of renounceable letters or other negotiable instruments. If a company wants to raise new capital through an issue of its ordinary shares for cash, it is prima facie obliged by section 561 of the Companies Act 2006 (CA 2006) to do so by means of a rights issue in favour of its existing shareholders. CA 2006, s 561 sets out statutory pre-emption rights and states that a company must not allot equity securities to a person on any terms unless: • it has made an offer to each holder of...

In the context of a listing, are equity securities required to be held in certificated or uncertificated form?

In the context of a listing, are equity securities required to be held in certificated or uncertificated form? Shares in a company can be issued as certificated shares or uncertificated shares. Generally, shares issued by private companies and unlisted public companies are usually held in certificated form while shares in listed companies and AIM companies are usually held in uncertificated form. Shares in a company are held in certificated form if: • the company has issued a physical share certificate for the shares, and • the owner of the shares has their name entered in the company's register of members Every company is required by the Companies Act 2006 (CA 2006) to keep a register of members recording the name and address of each member, the number of shares held, and the amount paid up on the shares. A company must issue a share certificate (that meets the requirements of CA 2006) to a person on their becoming a member through an allotment or transfer of shares within two...

See the 13 Q&As about Equity securities

FCA publishes updated checklists and forms following implementation of UK listing regime reforms

The Financial Conduct Authority (FCA) has updated its website with certain new information and published updated forms and checklists following the new UK listing regime coming into force on 29 July 2024. The forms and checklists now include reference to the UK Listing Rules and references to the Listing Rules (which have now been revoked) have been deleted.

Sustainable finance and ESG weekly round–up—5 October 2023

This week's edition of the Sustainable finance and ESG weekly round-up from the Finance Group includes: (1) NGFS publishes conceptual note on short-term climate scenarios, (2) ESMA publishes article and webinar on the rise of ESG-related language in EU funds, and (3) European Parliament publishes webpage which discusses green bonds.

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GLOSSARY