Rangers investors look like receiving a cast-iron imprimatur that the Financial Services Authority has declared the club ‘fit to go on the stock market’.
This will come, according to Rangers CEO Charles Green, when the FSA approves the upcoming share flotation prospectus.
Rangers’ Top Man gave the commitment on air while being questioned on STV regarding the re-emergence of former Ibrox owner Craig Whyte claiming he introduced the gritty Yorkshireman to D&P the administrators who sold all of the oldco Rangers’ assets to Sevco for £5.5 million. Amazingly Charlie, with a glint in his eye, revealed that the Ibrox property assets alone had just been revalued at £80 million.
He gave a number of assurances on controversial issues raised by the interviewer and said: ‘And all of the things that you are raising have got to be cleared.
‘So that when the Financial Services Authority approve Rangers as being fit to go on the stock market none of these questions lie unanswered’.
So this very comforting FSA ‘guarantee’ looks like another lead into gold bonanza as far as Rangers and the proposed AIM flotation is concerned, or is it?
In 2000 the FSA took responsibility for the Listing Regime which focuses on the eligibility of securities for admission to the ‘Official List’ and uses the name UK Listing Authority (UKLA) when carrying out this function.
In this role, the FSA is a securities regulator, focused on the companies which issue the securities traded in our financial markets. However, the FSA website states: ‘The UKLA does not have the power to make subjective qualitative judgements about a company’s suitability for listing’.
OK so I get that bit but what about a share flotation on the AIM Market?
Let’s go to old friend wikipedia which states: ‘The Official List is the list maintained by the FSA (UKLA) in accordance with Section 74(1) of the Financial Services and Markets Act 2000 (the Act) for the purposes of Part VI of the Act.
‘The Official List is a list of securities issued by companies for the purpose of those securities being traded on a UK regulated market. An example of a UK regulated market is the London Stock Exchange’s Main Market.’
Right that’s the Main Market dealt with – What about the junior AIM Market, is that a regulated market?
Well the London Stock Exchange (LSE) created AIM with the objective of offering smaller companies the opportunity to raise capital on a market with a pragmatic approach to regulation.
LSE further states that AIM: ‘Under the directives that form the EU’s Financial Services Action Plan, AIM is not a Regulated Market but instead falls within the classification of a Multilateral Trading Facility (MTF) as defined under the Markets in Financial Instruments Directive 2004 (MiFID)’.
Wait a minute, come again! So AIM isn’t a Regulated Market but are the prospectuses of companies applying to float approved by the FSA or UKLA or even LSE?
The first bit is quite easy to answer: ‘AIM companies and Nomads are regulated by a dedicated team at the London Stock Exchange – AIM Regulation – a team of professionals including lawyers, accountants and corporate financiers’. Well to my untrained eye that seems to rule out the FSA and UKLA.
But what about the LSE? This appears to be answered by the first page of a company’s AIM application document having to state prominently and in bold type:
“AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the official list of the UKLA.
“A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser.
“The London Stock Exchange has not itself examined or approved the contents of this document.”
Well it appears that the FSA, UKLA and LSE don’t actually vet AIM flotations and give a thumbs-up or down to the application. I know that will bring great sorrow to many of my fellow internet bampots 😦
But I cannot rest on my laurels as I may have missed vital evidence or misinterpreted what I have read and am well aware of how experienced Charlie is at floating companies.
So I think it best to have the FSA to actually confirm what the correct position is as it could have a direct bearing on whether football fans purchase shares or not. I doubt if it will affect the judgement of institutional investors who probably already know the answer to my question.
And if anyone out there does know then I will be happy to hear the answer which might set a lot of minds at rest and actually boost the amount raised for Charlie’s Rangers which I’m sure would please him.
Posted by Ecojon