Past version: Effective from 27 Sep 2013 to 22 Aug 2018
(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.
(i) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must ensure that it has access to appropriate technical expertise relevant to the business and products of the listing applicant or enlarged group to enable it to properly discharge its obligations as a sponsor. Such expertise can be from a third-party expert or an internal resource of equivalent standards within the full sponsor; and
(j) where the listing applicant or enlarged group is a mineral, oil and gas company, the full sponsor must:
(i) submit a confirmation to the Exchange that after conducting due diligence, the Sponsor is not aware of any matter that has caused it to believe that the listing applicant:
(a) has not obtained all material licences, permits or certificates necessary to conduct its operations from the relevant government bodies in the jurisdictions where the Group operates;
(b) is not in compliance with all the relevant laws, rules and regulations in all jurisdictions in which the Group operates, including but not limited to, the proper incorporation and good standing of any incorporated subsidiary or interest, except where such non-compliance is not material to the Group's business operations; and
(c) does not possess title to or validity and enforceability of the rights to any assets (including licences and agreements) as is appropriate to the listing applicant or the Group, except where such lack of, or defect in, such title or rights is not material to the Group's business operations.
The Sponsor should consider and advise on the suitability of the legal adviser involved in providing the legal opinion. In relying on the opinion from a legal adviser in providing the confirmation to the Exchange, the Sponsor should make due enquiries including:
(a) assessing the suitability of the legal adviser having regard to whether the legal adviser has the relevant experience and is authorized to practice and advise in the relevant jurisdiction; and
(b) reviewing the terms and scope of engagement.
(ii) be satisfied that the qualified person producing the qualified person's report required under Rule 441 has the relevant and appropriate qualifications, experience and technical knowledge to professionally and independently appraise the assets and liabilities being reported upon;
(iii) be satisfied that the scope of the qualified person's report required under Rule 441 is appropriate with regards to the listing applicant's or enlarged group's assets and liabilities; and
(iv) be satisfied that the work performed by the qualified person is in accordance with the relevant Standard
(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.
Amended on 1 February 20111 February 2011 and 27 September 201327 September 2013.