Post-price Stabilisation Disclosure
To be adequately disclosed in a Prospectus, the information should appear under its own separate heading in the first few pages of the Prospectus.
MKT 6.2.10 Specific price conditions(1) In the case of an Offer of Shares or other Securities equivalent to Shares, Stabilisation of the Relevant Securities shall not in any circumstances be executed above the offering price.(2) In the case of an Offer of securitised debt convertible or exchangeable into Instruments as referred to in paragraph (1), Stabilisation of those Instruments shall not in any circumstances be executed above the market price of those Instruments at the time of the public disclosure of the final terms of the new Offer.
MKT 6.2.11 Permitted Price Stabilisation(1) A Stabilisation Manager and, if applicable, his Stabilisation Agents may in respect of Relevant Securities:(a) purchase, or agree to purchase, such Relevant Securities; or(b) offer or attempt to do anything in (i) with a view to stabilising the market price of such Relevant Securities.(2) A Stabilisation Manager and his Stabilisation Agents may, in respect of Relevant Securities:(a) make allotments of a greater number of the Relevant Securities than were offered (‘over-allotment’);(b) sell or agree to sell the Relevant Securities in order to establish a short position in them;(c) buy or agree to buy the Relevant Securities in order to close out or liquidate any position that has been established by Price Stabilisation under (a) or (b);(d) sell or agree to sell the Relevant Securities in order to close out or liquidate any position that has been established by Price Stabilisation under (a) or (b); or(e) offer or attempt to do anything permitted by (a), (b), (c) or (d).(3) The Stabilisation Manager must not conduct, nor allow his Stabilisation Agent to conduct, Price Stabilisation in any case where:(a) the market price of the Relevant Securities is falsely higher than the price which would otherwise prevail; and(b) the Stabilisation Manage knows or ought reasonably to have known that the falsity in the market price was attributable in whole or in part to any conduct by a Person who was in breach of the Market Abuse provisions; or(c) any requirements of a Recognised Investment Exchange or any other exchange have not been complied with.
MKT 6.2.11 MKT 6.2.11 Conditions for Ancillary Stabilisation
In order to benefit from the exemption provided for in the FSMR, Ancillary Stabilisation must be undertaken in accordance with Rule 6.2.8 of this Regulation and with the following:(1) Relevant Securities may be over allotted only during the subscription period and at the Offer price;(2) a position resulting from the exercise of an Overallotment Facility by a Reporting Entity which is not covered by the Greenshoe Option may not exceed 5% of the original Offer;(3) the Greenshoe Option may be exercised by the beneficiaries of such an option only where Relevant Securities have been over allotted;(4) the Greenshoe Option may not amount to more than 15% of the original Offer;(5) the exercise period of the Greenshoe Option must be the same as the Stabilisation period required under Rule 6.2.8; and(6) the exercise of the Greenshoe Option must be disclosed to the public promptly, together with all appropriate details, including in particular the date of exercise and the number and nature of Relevant Securities involved.
The Stabilisation Manager may often be the lead manager in respect of an Offer, and can therefore over-allot Relevant Securities in the initial allocation and then facilitate the stabilisation by purchasing Relevant Securities during the Stabilisation Window. A Stabilisation Manager and his Stabilisation Agents may also sell short on the market to facilitate Price Stabilisation or in order to close out or liquidate positions established by Price Stabilisation.
MKT 6.2.13 Appointment of Stabilisation Manager and Stabilisation Agents(1) An Issuer/Reporting Entity who intends to carry out Price Stabilisation of its Relevant Securities/ must:(a) appoint in writing a Stabilisation Manager;(b) notify the FSRA of the appointment, including the name and business address of the Stabilisation Manager, the date of commencement of the appointment and an address for service in the ADGM of the Stabilisation Manager; and(c) prior to the appointment of the Stabilisation Manager, take reasonable steps to ensure that the Stabilisation Manager has the required skills, resources and experience to conduct the functions of a Stabilisation Manager.
(2) An Issuer/Reporting Entity must notify the FSRA immediately if the appointment of the Stabilisation Manager is to be terminated, or on the resignation of its Stabilisation Manager, giving the reasons for the cessation of the appointment.
(3) An Issuer/Reporting Entity must appoint a Stabilisation Manager to fill any vacancy in relation to the occurrence of an event specified in (2) and ensure that the replacement Stabilisation Manager can serve as such at the time the vacancy arises or as soon as reasonably practicable.
(4) Where a Stabilisation Manager appointed by an Issuer/Reporting Entity is not suitable in the opinion of the FSRA, or where a Stabilisation Manager has not been appointed, the FSRA may direct the Issuer/Reporting Entity to replace or appoint a Stabilisation Manager in accordance with the requirements in MKT 6.2.
MKT 6.2.14 Terms of Appointment for a Stabilisation Manager and Stabilisation Agents(1) The terms of appointment of a Stabilisation Manager must include at least the following information:(a) the period of the Stabilisation Window;(b) the Offer Price;(c) whether the Stabilisation Manager has discretion to commence Price Stabilisation at the Offer Price;(d) whether the Stabilisation Manager is permitted to appoint Stabilisation Agents;(e) a term whereby the Stabilisation Manager agrees unconditionally to submit to the jurisdiction of the FSRA and the ADGM Courts in relation to the activities of the Stabilisation Manager and his Stabilisation Agents in carrying out Price Stabilisation; and(f) any other information that the Stabilisation Manager believes it will reasonably need to conduct Price Stabilisation effectively.
(2) The Stabilisation Manager may appoint in writing one or more Stabilisation Agents to assist him in conducting Price Stabilisation.
(3) The terms of appointment of a Stabilisation Agent must not create a legal relationship other than that of principal and agent whereby the Stabilisation Manager as principal is responsible and liable for any acts carried out by his Stabilisation Agent.
(4) The Stabilisation Manager must establish a Price Stabilisation register and take reasonable steps to satisfy himself that the mechanisms required to update the register are in place.
MKT 6.2.15 MKT 6.2.15 Restrictions on transactions with Stabilisation Agents
(1) A Stabilisation Manager must not during the Stabilisation Window enter into a transaction as principal with any of his Stabilisation Agents in the Relevant Securities which are the subject of Price Stabilisation(2) The requirement in (1) does not apply:(a) if at the time of the transaction, neither the Stabilisation Manager nor his Stabilisation Agent knew or could reasonably have known the identity of his counterparty; or(b) where the transaction between the Stabilisation Manager and his Stabilisation Agent is undertaken solely for the purpose of reallocating the risk of positions that were taken by the Stabilisation Manager and his Stabilisation Agent in the course of Price Stabilisation and the transaction is priced accordingly.
Some participants in the Price Stabilisation may have accrued positions during stabilisation and Rule 6.2.15 permits transactions to ‘square-off’ the positions between participants. The terms on which these transactions may be carried may often be agreed in the terms of engagement between the Stabilisation Manager and his Stabilisation Agents. The FSRA may when inspecting records kept relating to stabilisation seek the rationale for any of these transactions and the price at which they were conducted.
MKT 6.2.16 MKT 6.2.16 Price Stabilisation Register(1) The Stabilisation Manager must, before carrying out any Price Stabilisation:(a) create a register to record the details relating to the Price Stabilisation as required by Rule 6.2.7 to 6.2.16; and(b) establish and implement systems and controls to keep the register updated.(2) The Stabilisation Manager must ensure that the register contains either on a real-time or daily updated basis the following information:(a) the names and contact details of all Stabilisation Agents appointed by him;(b) details of the appointment of each Stabilisation Agent, including the date of the appointment;(c) the general terms and instructions (including details of the price floor and Stabilisation Window) determined by the Stabilisation Manager for his Stabilisation Agents and the date and time of the communication, variation or revocation of that information and instructions;(d) details of all correspondence passing between the Stabilisation Manager and his Stabilisation Agents relating to the Price Stabilisation, including all instructions and variations or revocations of appointments;(e) each and every transaction undertaken by the Stabilisation Manager and Stabilisation Agents in the course of the Price Stabilisation, including but not limited to the following transaction details:(i) the type of Relevant Securities;(ii) the price;(iii) the size;(iv) whether the transactions were undertaken on or off the central order book of the relevant Recognised Investment Exchange;(v) the date and time;(vi) details of the counterparty (if known); and(vii) details of the allotment of the Relevant Securities.
GuidanceRule 6.2.16(e)(vi) recognises that some market infrastructures, for example, anonymous order books or anonymous indications of interest, allow for the identity of counterparties to sometimes be unknown prior to the effecting of transactionsRule 6.2.16 also accepts that some participants in the Price Stabilisation may have accrued uneconomic positions during Price Stabilisation and therefore permits a single transaction, probably at the end-of-day, to ‘square-off’ the positions between participants. The terms on which these transactions can be carried may often be agreed in the terms of engagement between the Stabilisation Manager and the Stabilisation Agents. The Regulator may when inspecting records kept relating to Price Stabilisation seek the rationale for any of these transactions and the price at which they were conducted.(3) The Stabilisation Manager must keep the register in the English language and keep it in a location that would allow for it, or a certified copy, to be available within three business days to any person permitted by Rules 6.2.16(4) and 6.2.16(5) to inspect it.(4) The following persons are permitted to inspect the register upon written request:(a) the Regulator;(b) the Recognised Investment Exchange upon which the Relevant Securities are admitted to trading; and(c) any other person the Regulator considers appropriate.(5) During the Stabilisation Window and within three months from the end of the Stabilisation Window, the Stabilisation Manager must, on any business day, permit the Issuer of the Relevant Securities to which the Price Stabilisation Rules apply to inspect the part of the register kept in accordance with Rule 6.2.16(2)(e).(6) The Stabilisation Manager must keep the register for a period of six years from the end of the Stabilisation Window.
MKT 6.2.17 MKT 6.2.17 Price Stabilisation and Dual-listings(1) Rule 6.2.17 applies to a Person who carries out Price Stabilisation of dual-listed Relevant Securities.(2) For the purposes of (1), ‘dual-listed Relevant Securities’ are Relevant Securities which are listed concurrently on a Recognised Investment Exchange (not being a Remote Investment Exchange) and on either a Remote Investment Exchange or an exchange in a jurisdiction other than the ADGM.
Guidance‘Dual-listed Relevant Securities’ in (2) would, in relation to one Listed Security, include Certificates (e.g., global depository receipts) and Warrants over the other Listed Security.