Capital Markets Update: April 2023

March’s news

HM Treasury launches Investment Research Review

On 9 March 2023, HM Treasury published some terms of reference setting out the scope and objectives of an independent review of investment research and its contribution to the competitiveness of UK capital markets. The review started on 13 March 2023 and is mandated to report within three months.

Update report published on ethnic diversity on boards

On 13 March 2023, the Parker Review Committee published an update report which includes the results of its latest survey on the ethnic diversity of FTSE 350 companies’ boards. The report also includes new recommended targets to improve ethnic diversity within FTSE 350 senior management teams and large UK private companies.

FCA publishes PMB 44

On 20 March 2023, the Financial Conduct Authority (FCA) published Primary Market Bulletin 44, its newsletter for primary market participants. The newsletter addresses disclosure requirements relating to diversity and inclusion on boards and executive management, not proceeding with a technical note on prospectuses and regulatory announcements with multimedia content.

HM Treasury and FCA complete review of criminal market abuse regime

On 24 March 2023, HM Treasury and the FCA published a joint statement on the review of the criminal market abuse regime, which sets out criminal sanctions for insider dealing. The review has identified a number of areas where Government believes it would be appropriate to update the criminal regime. The changes will be considered alongside reforms to the retained version of the Market Abuse Regulation which Government intends to repeal. A timetable for reform of UK MAR and the criminal regime will be published in due course.

Cryptoassets to be included within financial promotion restrictions

On 27 March 2023, a draft version of the Financial Services and Markets Act 2000 (Financial Promotion) Amendment) Order 2023 was published on legislation.gov.uk, together with a draft explanatory memorandum. The draft Order expands the scope of the financial promotion restriction in section 21 of the Financial Services and Markets Act 2000 by amending the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) to include financial promotions in respect of certain cryptoassets.

FRC publishes plan for 2023 to 2026

On 27 March 2023, the Financial Reporting Council (FRC) published its Three Year Plan: 2023 to 2026, setting out its priorities and intended expenditure for 2023 to 2026. The FRC now assumes that ARGA will be formally created during 2024 (rather than 2023) and has re-prioritised its work accordingly.

PLSA Stewardship and Voting Guidelines 2023

On 30 March 2023, the Pensions and Lifetime Savings Association (PLSA) published its 2023 stewardship and voting guidelines. Changes to the 2022 version include amendments relating to virtual AGMs, board composition and diversity, remuneration, climate change and Chair appointments.

Review of the Senior Managers and Certification Regime launched

On 30 March 2023, HM Treasury launched a call for evidence in relation to the performance, effectiveness and scope of the Senior Managers and Certification Regime (SM&CR). The call for evidence has been launched alongside a joint FCA and Prudential Regulation Authority discussion paper focusing on operational aspects of the SM&CR. Responses to the discussion paper should be received by 1 June 2023.

ESMA updates MiFID II Q&As

On 31 March 2023, the European Markets and Securities Authority (ESMA) published an updated version of its Q&As on transparency topics under the MiFID II Directive (2014/65/EU) and the Markets in Financial Instruments Regulation (600/2014).

Looking ahead to April 2023

28 April – closing date for responses to the Department of Business and Trade (formerly BEIS) consultation on proposed amendments to the Reporting on Payment Practices and Performance Regulations 2017.

30 April – closing date for responses to HM Treasury’s consultation on the future regulatory regime for cryptoassets.