Class 1 transactions—fundamentals

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Class 1 transactions—fundamentals
  • What is a class 1 transaction?
  • What are the class tests?
  • Which transactions should be classified under the class tests?
  • Do any transactions need to be aggregated?
  • What are the requirements for a class 1 transaction?
  • What should be included in a class 1 announcement?
  • What should be included in a class 1 circular?
  • Is FCA approval required for a class 1 circular?
  • Is shareholder approval required for a class 1 transaction?
  • More...

Class 1 transactions—fundamentals

This document provides accessible practical guidance and links to more comprehensive content in relation to class 1 transactions undertaken by UK companies with a premium listing. It focuses on the main company law and regulatory issues found in the Companies Act 2006 (CA 2006) and the FCA Handbook.

The Listing Rules in the FCA Handbook contain detailed rules on the action a premium listed company must take when it enters into a transaction which is deemed to be significant due to its size or impact on the listed company. These are aimed at ensuring that shareholders are kept fully informed and have the opportunity to vote on significant transactions which may affect their investment in the company. The rules relating to transactions by premium listed companies are set out in Chapter 10 of the Listing Rules and only apply to companies with a premium listing and not to those with a standard listing.

What is a class 1 transaction?

In summary, a class 1 transaction is a transaction (or a series of related transactions in a 12 month period) by a premium listed company or one of its subsidiary undertakings, the size of which accounts for 25% or more of the size of the listed company and which is outside the ordinary course of the listed company’s business. The size of the transaction is measured

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