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Unpacking the Free Float Requirement

10/10/2017

At a glance

We often encounter companies listed on exchanges such as TSX, ASX and JSE wishing to list on the Main Market, as they recognise it provides an excellent opportunity for issuers looking for a secondary listing to access enhanced liquidity and an investor pool that would not otherwise be accessible to them on their ‘home’ market.

free float requirement article

However, many companies seeking a dual listing in London find their plans hampered by their absence of the requisite percentage of EEA State shareholders. For companies listed on non-EEA stock exchanges, we may have your solution.

In order to list on the Main Market, the Listing Rules require that 25% of the company’s share capital is in ‘public’ hands in one or more EEA State.

However, the Listing Rules also provide that when satisfying this requirement, account may be taken of shareholders in non-EEA States if the company’s shares are listed in the same state or states. In practice, what this means is that issuers listed on, for example, TSX, ASX or JSE, will almost always fulfil the UK free float requirement.

Memery Crystal is a specialist international law firm based in London with a well-established history of acting for companies listing on the Main Market. Clients include Rainbow Rare Earths, Petra Diamonds, Tharisa, Green Dragon Gas and Gulf Keystone Petroleum. To see if your business is eligible for the Main Market, read our guide here.

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