MKT 5.1 MKT 5.1 Sponsors
This section applies to:(a) a Sponsor appointed pursuant to Rule 5.1.2; and(b) any Reporting Entity that is required by the Regulator to appoint a Sponsor.
Appointment of Sponsors
MKT 5.1.2 MKT 5.1.2(1) Pursuant to section 83 of the FSMR, the Regulator may, where it considers it appropriate to do so, require a Person who makes or intends to make a Prospectus Offer to:(a) appoint a Sponsor in respect of the Prospectus Offer; or(b) provide third party certification in respect of any specific matters relating to the Prospectus Offer.(2) Where the Regulator requires a Sponsor to be appointed pursuant to (1)(a), the Regulator must:(a) do so in sufficient time to enable the Sponsor to comply with the requirements in this Chapter and(b) require such appointment to be effective for the Offer Period or such other period as the Regulator determines as appropriate.
Guidance1. The Regulator may require the appointment of a Sponsor or a compliance adviser as appropriate to the circumstances of an issuance as assessed by the Regulator in its sole discretion. Circumstances which are likely to require the appointment of a Sponsor include an issuance where there is a large retail element. Conversely, a compliance adviser is likely to be required to be appointed where there is a large wholesale element to an issuance.2. The Regulator may require the appointment of a Sponsor, or third party certification in respect of any matters relating to an Issuer, in appropriate cases. An example of circumstances in which the Regulator may require the appointment of a Sponsor, or third party signoff, would be where an Issuer does not have a proven track record, such as a start-up.3. Generally, the matters in relation to which the Regulator may require third party sign-off pursuant to Rule 5.1.2(1)(b) include matters relating to the adequacy of working capital and systems and controls in place for financial reporting by the Issuer. Such certification should be provided by a third party acceptable to the Regulator. To be acceptable to the Regulator, the third-party should be independent of the Issuer and have relevant expertise relating to the matters on which certification of compliance is to be provided.4. In most cases the Person making a Prospectus Offer will be the Issuer of the Securities to which the Prospectus relates. However there may be situations where the Person making a Prospectus Offer, that is the Offeror, is not the Issuer of the Relevant Securities.5. In any event, the Sponsor must make certain inquiries and assume certain obligations under these Rules. A Sponsor should therefore be a Person familiar with the requirements of the FSMR and Rules and who has the necessary knowledge, experience, qualifications and resources to assist the Person making the Prospectus Offer to comply with the various requirements.
Procedures relating to appointment of Sponsors
MKT 5.1.3(1) A Person required to appoint a Sponsor must, prior to appointing a Sponsor:(a) take reasonable steps to ensure that the proposed Sponsor has the required knowledge, experience, qualifications and resources to carry out its obligations under these Rules; and(b) notify the Regulator of the proposed Sponsor's name, its business address and an address in the Regulator for the service of documents.(2) If requested by the Regulator, a Person appointing a Sponsor must provide the Regulator with information about the knowledge, experience, qualifications and resources of the appointed or proposed Sponsor.
MKT 5.1.4(1) A Person must take reasonable steps to ensure that the relevant Sponsor and Employees of the Sponsor are independent and have appropriately managed any conflict of interest that may arise.(2) A Person must notify the Regulator if it becomes aware, or has reason to believe, that the Sponsor or relevant Employees of the Sponsor are no longer independent or have a conflict of interest which has not been appropriately managed.
MKT 5.1.5(1) Where, in the opinion of the Regulator, a Sponsor appointed by a Person is not suitable, or where a Sponsor has not been appointed or has resigned, the Regulator may direct the Person to replace or appoint a Sponsor.(2) The Regulator must give both the Person and, if in the Regulator's opinion a Sponsor is not suitable, the Sponsor an opportunity to make representations under the procedures in that Schedule.
Obligations of a Sponsor
A Sponsor appointed pursuant to Rule 5.1.2 must:(1) satisfy itself to the best of its knowledge and belief, having made due and careful enquiry that the Person who makes or intends to make a Prospectus Offer has satisfied all applicable conditions for offering Securities and other relevant requirements under the FSMR and these Rules;(2) provide to the Regulator any information or explanation known to it in such form and within such time limit as the Regulator may reasonably require for the purpose of verifying whether the Person making the Prospectus Offer complies or has complied, with the applicable requirements in the FSMR and these Rules; and(3) take other steps required in writing by the Regulator.
Where a Sponsor becomes aware of a failure by the Person making the Prospectus Offer to comply with its obligations under the FSMR and these Rules, the Sponsor must without undue delay:(1) notify the Person making the Prospectus Offer of the failure and take reasonable steps to ensure it rectifies the failure within a reasonable time; and(2) if the Person making the Prospectus Offer does not or is unable to rectify the failure as soon as practicable notify the Regulator of that fact.
Duty of care of Sponsors
A Sponsor has a duty of care to the Person which has made its appointment.
Co-operation with Sponsors
A Person who is required to appoint a Sponsor in respect of a Prospectus Offer must take reasonable steps to ensure that it and its Employees:(1) provide such assistance as the Sponsor reasonably requires to discharge its duties;(2) give the Sponsor right of access at all reasonable times to relevant records and information;(3) do not interfere with the Sponsor's ability to discharge its duties;(4) do not provide false, misleading, or deceptive information to the Sponsor; and(5) report to the Sponsor any matter which may significantly affect the financial position of the Person issuing the Securities or the price or value of the Securities.
A Sponsor must notify the Regulator of any non-cooperation by the Person making the Prospectus Offer or the Employees of that Person.
Termination of appointment
Where a Person who is required to appoint a Sponsor dismisses the Sponsor, the Person must advise the Regulator in writing without delay of the dismissal, giving details of any relevant facts and circumstances.
Where a Sponsor resigns, it must advise the Regulator in writing without delay of the resignation, giving details of any relevant facts and circumstances.