225
Past version: Effective up to 31 Jan 2011
(1) A full sponsor, in preparing a listing applicant for admission or advising an issuer in a very substantial acquisition or reverse takeover, must be satisfied that, having made reasonable due diligence enquiries and having considered all relevant matters, the listing applicant, or in the case of a very substantial acquisition or reverse takeover, the enlarged group, is suitable to be listed. This includes doing each of the following, having regard to the guidance in Practice Notes 2B and 4A:
(a) achieve a thorough understanding of the listing applicant or enlarged group and its business, including recent major developments relating to it, and gain an understanding of the industry it operates in;
(b) investigate and consider the suitability of each executive officer, director and the board as a whole in relation to the listing applicant's or enlarged group's needs;
(c) conduct the due diligence process for the offer document or shareholders' circular, including at a minimum, complying with the SIBA Due Diligence Guidelines where applicable or such other satisfactory and no less strict due diligence guidelines or processes;
(d) oversee, and be actively involved in, the preparation of the offer document or shareholders' circular and ensure compliance with any rule requirements or legal requirements;
(e) satisfy itself that the listing applicant or enlarged group has sufficient systems, procedures, controls and resources to comply with the Rules and that its directors understand and intend to fulfil their obligations at all times for as long as the securities of the issuer remain listed on Catalist;
(f) consider and advise on the suitability and competence of other professionals and consultants involved in the admission, very substantial acquisition or reverse takeover process;
(g) undertake independent verification directly or by a reputable agent, of the listing applicant or enlarged group, its management and controlling shareholders, including:
(i) key persons' personal and business backgrounds and integrity, role in the listing applicant's or enlarged group's business, interests in other companies, and any criminal or other records or links to money laundering or organized crime; and
(ii) the listing applicant's or enlarged group's history, structure, accounts, business reputation and development, its related companies, its other businesses, and the influence of key persons; and
(h) ensure that its declaration regarding the listing applicant or the enlarged group (Appendix 4B) is submitted to the Exchange.
(2) When asked by the Exchange, demonstrate that it has complied with Practice Note 2B or how it has met the objectives in that Practice Note in another way.
(3) A full sponsor conducting introducing activities for an issuer must act as the continuing sponsor for the issuer for at least 3 years after admission of the issuer or the enlarged group. If the sponsor intends to end the sponsorship within 3 years of the issuer's listing, it must obtain the Exchange's approval. The Exchange may, in exceptional circumstances, give such approval.