Companies Act 2014 section 1031

Dispensation from section 1028 — certain securities or money-market instruments constituting consideration for allotment

Section 1031 provides an exemption from the requirement for a PLC to obtain an independent expert's valuation report when shares are allotted in exchange for transferable securities or money-market instruments, provided certain conditions regarding market pricing are met.

• When a PLC allots shares in exchange for transferable securities or money-market instruments (or both), it may be exempt from obtaining an independent expert's valuation report under section 1028, provided the assets can be reliably valued using recent market prices.
• The securities or instruments must be valued at their weighted average trading price on a regulated market over the five consecutive trading days immediately before the allotment date, and no exceptional circumstances (such as an illiquid market) must have distorted that price.
• If exceptional circumstances have affected the market price, the exemption falls away and the PLC must obtain a full expert's valuation report in accordance with sections 1028 to 1030.
• Where the PLC relies on this exemption, it must file a notice with the Registrar by the allotment date describing the non-cash consideration, its value and valuation source, and confirming that the value covers at least the nominal value and any premium on the shares, and that no exceptional circumstances arose.