Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, whether he has asked the Financial Conduct Authority to review its processes to ensure that companies seeking listings on the London Stock Exchange which are subject to (a) US and (b) EU sanctions are investigated on national security grounds; and if will he make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Sanctions of third countries do not affect whether companies should be allowed to float on the London Stock Exchange. We impose sanctions, either unilaterally or through the EU, when we have sufficient evidence to prove that sanctions on a person or company satisfy the purposes of the regime in question. Any company that is subject to relevant EU sanctions will not be allowed to list, and these sanctions additionally prevent designated persons from being the beneficiaries of the proceeds of a listing. This is also true for persons that are listed under a UK autonomous sanctions regime.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, pursuant to the Answer of 20 March 2018 to Question 132483 on En+ Group and with reference to recent information released by the US Treasury, what checks he has made to ensure that major shareholders pass the test of fit and proper persons on national security grounds; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
There is no such test of fit and proper persons on national security grounds under applicable legislation. The Financial Services and Markets Act 2000 (FSMA) requires that the appropriate regulator be notified before the acquisition of or increase in control over a UK authorised person. The regulator then assesses whether to approve or object to the acquisition by reference to specified criteria in the Act. There is no role for HM Treasury to consider or supplement the regulator’s assessment.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will make an assessment of whether the listing of EN+ Group on the London Stock Exchange received appropriate security checks; and if will he make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury is not directly involved in the process for companies seeking to list on the London Stock Exchange and therefore does not undertake checks as part of this process. Companies seeking to admit securities to the Official List must apply to the Financial Conduct Authority (FCA), in its role as the UK Listing Authority (UKLA). For listed companies, the UKLA monitors and enforces compliance with the Listing Rules. The FCA is an independent regulator.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what checks were made by his Department before the listing of EN+ Group on the London Stock Exchange; and if will he make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury is not directly involved in the process for companies seeking to list on the London Stock Exchange and therefore does not undertake checks as part of this process. Companies seeking to admit securities to the Official List must apply to the Financial Conduct Authority (FCA), in its role as the UK Listing Authority (UKLA). For listed companies, the UKLA monitors and enforces compliance with the Listing Rules. The FCA is an independent regulator.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he takes to ensure that funds raised by companies through initial public offerings in London do not finance companies under US and EU sanctions; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I refer the honourable member to the reply I gave on 16 March 2018 to his previous question, no. 132256.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask the Mr Chancellor of the Exchequer, what steps she is taking to ensure that funds raised by foreign companies through initial public offerings in London do not finance companies under US and EU sanctions; and if she will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Financial Conduct Authority (FCA) is the competent authority responsible for the UK initial public offering (IPO) process. Companies seeking to admit securities to the Official List must apply to the UK Listing Authority (UKLA), a division of the Financial Conduct Authority.
The UKLA is responsible for assessing the eligibility of any potential issuer and approving the prospectus of any company that wishes to list its securities on the London Stock Exchange. The UKLA can request advice from the Office of Financial Sanctions (OFSI), which is part of HM Treasury, in relation to UN, UK or EU sanctions but responsibility for the admission of companies to the Official List lies with the UKLA.
OFSI assesses all reported suspected breaches of UN, EU or UK financial sanctions to determine whether a breach has occurred and if so, the extent of any breach before taking action. OFSI refers the most serious cases to the National Crime Agency ("NCA") for criminal investigation.
The Office of Foreign Assets Control (OFAC) of the US Treasury Department enforces US economic and trade sanctions. OFSI regularly engages with OFAC on financial sanctions but OFSI has no role in ensuring compliance with or enforcement with US sanctions.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, if he will make an assessment of whether the listing of EN+ Group on the London Stock Exchange adheres to his Department's guidelines on such listings; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury does not provide guidelines for companies seeking to list on the London Stock Exchange (LSE). Companies seeking to admit securities to the Official List must apply to the Financial Conduct Authority, in its role as the UK Listing Authority (UKLA). For listed companies, the UKLA monitors and enforces compliance with the Listing Rules.
Asked by: Mike Penning (Conservative - Hemel Hempstead)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to ensure that funds raised by foreign companies through initial public offerings in London do not finance companies under US and EU sanctions; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Her Majesty’s Government (HMG) is committed to ensuring financial sanctions are effectively implemented and enforced throughout the UK. HMG also works closely with authorities around the world to help ensure compliance with international sanctions.
In its role as the UK Listing Authority (UKLA), The Financial Conduct Authority (FCA) is the competent authority for regulating listed companies and enforcing compliance with the UK listing regime. The FCA is responsible for assessing the eligibility of any potential issuer and approving the prospectuses published by issuers and offerors in advance of initial public offerings in London. Regulators, businesses and individuals can request advice from the Office of Financial Sanctions Implementation (OFSI), which is part of HM Treasury, in relation to UN, UK or EU sanctions but the decision as to whether a listing applicant and its business is suitable for listing on the London Stock Exchange is ultimately a matter for the FCA.
OFSI assess all reported suspected breaches of UN, EU or UK financial sanctions and takes robust action where appropriate.