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Flashcards in Module 5 Deck (27)
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1
Q

Advantages of Joining and exchange?

A
Raising finance
Enhanced status 
Higher profile 
Employee benefits 
Exit route
2
Q

Disadvantages of joining an exchange

A

Cost
Public scrutiny
Dilution
Ongoing responsibilities

3
Q

Trading of top stocks in form by

A

A fully electric order book known as stock exchange electric trading service

4
Q

LSE regulates trading on the secondary markets for both

A

Main market

AIM

5
Q

LSE regulated by what three bodies?

A

FPC Financial policy committee
PRA prudential regulation authority
FCA financial conduct authority

6
Q

Criteria for admission to the main market premium listing

A

Min market cap 700000
Min shares in public 25%
Audited financial information 3 years
Appoint sponsor Yea

7
Q

Criteria for admissions to standard listing of main market

A

Min market cap 700000
Min shares in public 25%
Audited financial info N/A
Appoint sponsor no

8
Q

Advisers

A

Sponsor
Broker
Lawyers
Accountants

9
Q

Admission to Aim

A

Legally established
Publish annual and interim accounts
Issuer must appoint and retain a nominated adviser

10
Q

What are primary market transactions?

A

Raise finance by selling either equity securities or debt securities

Finance raised in a primary market by either selling shares through an exchange or by raising private equity

11
Q

What are sales in the secondary market?

A

When first buyer wishes to sell the security

Provides cash for the security holder not the organisation that originally issued: secondary market

12
Q

If a company wishes to trade on the LSE it must be?

A

Approved by the UK listing authority UKLA to be added to list of UK securities and then the LSE to be allowed to trade

13
Q

The role of exchange is two fold:

A

Providing trading and information services, and regulation

14
Q

Trading of top stocks is done by?

A

A fully electronic order book trading mechanism, the Stock exchange Electronic Trading Service SETS

15
Q

The electronic order book automatically matches orders for the?

A

FTSE-100
FTSE-250
FTSE Small Cap
Index constituents and other liquid stocks

Displays willingness to buy or sell quantities of shares at specific prices or to execute against orders

Executions occur automatically in accordance with strict price and time priority

16
Q

What is order driven price?

A

When there is frequent buying and selling of a particular share

Based on real world transactions

17
Q

What is quote driven?

A
Trading of less liquid UK equities largely  quote driven and supported by market markets;
through SETSqx (quotes and crosses) or SEAQ Stock Exchange Automated Quotation systems
18
Q

Role of market makers?

A

Providing buying and selling prices in the securities in which they are registered

Have to be member firms of the exchange

19
Q

How do market makers make income?

A

From the difference between the buying and selling prices they offer

20
Q

LSE regulated by three bodies established under what?

A

Financial services act 1 April 2013

21
Q

Companies issuing securities on the main market are generally

A

Large companies with strong trading records

22
Q

The main market is for

A

All sectors and all counties

31/01/18 1260 companies with £4.5 trillion combined market cap

23
Q

Who are requirements for entry into main market set out by and in?

A

In ‘The Listing Rules’ issued by the UKLA, a division of the FCA

24
Q

What is the two stage process for companies that wish to list in London?

A

Application to list from the UKLA
Admission to trade from the LSE

Once admitted by UKLA, an official list notice will be issued and once an admission to trading notice is also issued by LSE ready to buy and sell securities

25
Q

Criteria for admission to main market?

A
Premium 
700000 market cap
25% public hands
3 years audited
Sponsor

Standard
700000 market cap
25% in public hands

26
Q

What is a prospectus?

A

Directors that wish to list securities must prepare a detailed document called a prospectus to give to potential investors

27
Q

Content of prospectus?

A

Content prescribed by UKLA

three years of audited accounts for premium

Details of working capital and indebtedness, major contacts and shareholders for both premium and standard