November’s news

ICMA updates its Guidance Handbook

On 4 November 2024, the International Capital Market Association (ICMA) announced that it has published a revised version of its Guidance Handbook, replacing the November 2023 version. The Guidance Handbook provides Q&As on the interpretation of the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, Sustainability-Linked Bond Principles and the Climate Transition Finance Handbook.

FCA sets out improvements to the bond and derivatives market

On 5 November 2024, the Financial Conduct Authority (FCA) published its policy statement on improving transparency for bond and derivatives markets. The policy statement sets out a post-trade transparency regime based on fewer deferrals for bonds and certain OTC derivatives. Changes to the transparency regime are set out in the Markets in Financial Instruments (Non-Equity Transparency Rules) Instrument 2024, which comes into force on 1 December 2025.

Government publishes guidance new ‘failure to prevent fraud’ offence

On 6 November 2024, Government published guidance on the corporate ‘failure to prevent fraud’ criminal offence which was created by the Economic Crime and Corporate Transparency Act 2023. Alongside an impact assessment, the guidance includes an overview of the offence, recommends reasonable prevention procedures and addresses overlaps with existing legislation and regulatory regimes. The failure to prevent fraud offence is scheduled to come into force on 1 September 2025.

Takeover Panel publishes new jurisdictional framework for the Takeover Code

On 6 November 2024, the Takeover Panel published Response Statement 2024/1 which sets out a revised jurisdictional framework for the Takeover Code that will narrow the scope of the companies to which it applies. The code will apply to a company if it has its registered office in the UK, the Channel Islands or the Isle of Man (referred to as UK registered) and any of the company’s securities are admitted to trading on a UK regulated market, a UK multi-trading facility such as AIM or a stock exchange in the Channel Islands or the Isle of Man (referred to as UK quoted). The code will also apply to a UK registered company that was UK quoted at any time in the two years before the date on which an announcement is made of an offer or possible offer for the company or on which another significant event under the code occurs. The changes to the code will take effect on 3 February 2025.

FRC launches Stewardship Code consultation

On 11 November 2024, the Financial Reporting Council (FRC) launched a consultation on proposed revisions to the UK Stewardship Code 2020. The FRC proposes to streamline reporting requirements and reduce burdens for signatories, ensuring a clearer focus on the purpose of stewardship and the outcomes that it delivers. The FRC has also uploaded a Podcast discussing the launch of the consultation.

Regulations relating to designated activities regime published

On 11 November 2024, the draft Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2024 were laid before Parliament, together with a draft Explanatory Memorandum. The regulations will extend the FCA’s existing supervision and enforcement powers in relation to authorised persons under FSMA 2000 to designated activities carried on under the regulatory framework created by section 8 of the Financial Services and Markets Act 2023.

Progress report on corporate climate-related disclosures

On 12 November 2024, the IFRS Foundation issued a report on progress on corporate climate-related disclosures. The report records companies’ progress in making climate-related disclosures by monitoring early take-up of the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board in 2023.

FAQs published on sustainability reporting

On 13 November 2024, the European Commission published a set of frequently asked questions (FAQs) to provide guidance and clarification on sustainability reporting requirements introduced by the Corporate Sustainability Reporting Directive (CSRD). Of relevance to UK companies, the FAQs include guidance for third-country undertakings on sustainability reporting requirements introduced by the CSRD.

Chancellor announces plans for the financial services sector

On 14 November 2024, the Chancellor announced a package of reforms that are intended to drive growth and competitiveness in the financial services sector. Included in the announcement are reforms to the pensions system to boost investment in business, infrastructure and clean energy, and proposals to reform the current approach to financial services regulation by making it less risk averse, more dynamic and the sector more competitive.

Glass Lewis publishes benchmark policy guidelines

On 14 November 2024, Glass Lewis published updated UK Proxy Voting Policy Guidelines, setting out its approach to topics including board composition, executive remuneration and share capital management ahead of the 2025 AGM season. Glass Lewis has also revised its global Shareholder Proposals & ESG-Related Issues Guidelines, which discuss the proxy advisor’s approach to shareholder proposals and other initiatives, including shareholder resolutions and wider engagement between companies and investors. The updated guidelines will apply for meetings held from 1 January 2025.

Private Intermittent Securities and Capital Exchange Systems

On 14 November 2024, HM Treasury published its response to its consultation paper on the regulatory framework for the proposed new Private Intermittent Securities and Capital Exchange System (PISCES). The response summarises feedback to the consultation and sets out how Government intends to design the regulatory framework for PISCES based on the views received. Government intends to introduce the PISCES legislation by May 2025. The FCA will also publish a consultation on its proposed rules for PISCES in due course and, once the rules are finalised, the PISCES sandbox will open for applications.

Proposed regulatory regime for ESG rating providers

On 14 November 2024, HM Treasury published a formal response to its consultation on a future regulatory regime for ESG rating providers under the Financial Services and Markets Act 2000 (FSMA). In the response, HM Treasury confirms that it will proceed with its proposal to bring the provision of ESG ratings within the scope of FSMA, covering ratings produced in the UK and ratings produced overseas made available to UK users by way of a business relationship. The deadline for comments is 14 January 2025.

Call for evidence on financial services growth and competitiveness strategy

On 14 November 2024, HM Treasury published a call for evidence on its financial services growth and competitiveness strategy. HM Treasury is currently developing the strategy, which is intended to serve as the central guiding framework through which Government will achieve sustainable, inclusive growth for the financial services sector and secure the UK’s competitiveness as an international financial centre. The deadline for responses to the call for evidence is 12 December 2024. HM Treasury intends to publish the strategy in spring 2025.

HM Treasury consults on UK green taxonomy

On 14 November 2024, HM Treasury published a consultation on the UK green taxonomy. The primary purpose of the consultation is to establish whether a UK green taxonomy would be additional and complementary to existing policies in meeting the objectives of mitigating greenwashing and channelling capital in support of Government’s sustainability objectives. A taxonomy is a classification tool that provides its users with a common framework to define which economic activities support climate, environmental or wider sustainability objectives. The consultation closes on 6 February 2025.

FCA publishes Primary Market Bulletin 52

On 15 November 2024, the FCA published Primary Market Bulletin 52. The bulletin includes steps that issuers can take to ensure they are well prepared to correctly identify inside information, considers the dissemination of information during shareholder calls and meetings and provides actions for issuers to consider in the event of future interruptions to Primary Information Provider services.

ISS announces 2025 benchmark voting consultation

On 18 November 2024, Institutional Shareholder Services (ISS) launched Request for Comments: Proposed benchmark policy changes 2025, which requests feedback on proposed changes to its international voting policies in 2025. ISS expects to announce the final 2025 benchmark voting policy changes in December 2024 and the updated policies will be effective for shareholder meetings held on or after 1 February 2025.

PEG reports on adoption of its revised statement of principles

On 22 November 2024, the Pre-Emption Group (PEG) published a report monitoring the use of its statement of principles in disapplying shareholder pre-emption rights, the second to be published since the principles were revised in 2022. In its second report, PEG indicates ‘growing confidence’ in the updated Statement of Principles.

FCA issues fines for publishing misleading and incomplete information

On 25 November 2024, the FCA published final notices fining Barclays plc and Barclays Bank plc for breaches of the Listing Rules. The final notices follow Barclays’ decision to withdraw its referral of the FCA’s planned actions to the Upper Tribunal (Tax and Chancery Chamber). In the final notices, the FCA imposes fines on Barclays of £40 million in total for its failure to disclose certain arrangements with Qatari entities as part of its 2008 capital raisings, in breach of LR 1.3.3R (misleading information must not be published), LR 13.3.1R(3) (circulars must contain all information necessary to make properly informed decision) and Listing Principle 3 (acting with integrity towards holders and potential holders of listed shares). The financial penalties must be paid in full to the FCA no later than 9 December 2024.

FRC publishes annual review of corporate governance reporting

On 26 November 2024, the FRC published its annual review of corporate governance reporting against the Corporate Governance Code. The review highlights examples of good reporting and identifies areas for improvement to help companies navigate the transition to the revised UKCG Code 2024, which will largely apply to financial years beginning on or after 1 January 2025. Alongside the review, the FRC has published a series of Podcasts to support implementation of the UKCG Code 2024.

FCA fines a PDMR for breaches of MAR

On 27 November 2024, the FCA announced that it had fined the former senior manager at Wizz Air Holdings plc £123,500 for trading in the listed company’s shares during closed periods before the announcement of financial results in breach of Article 19(11) Market Abuse Regulation (MAR) and failing to notify personal trades in breach of Article 19(1). It is the first time the FCA has fined a person discharging managerial responsibilities (PDMR) for breaching Article 19(11) and only the second time a PDMR has been fined for failing to disclose personal trades under Article 19(1).

Commencement regulations made for the DMCCA 2024

On 28 November 2024, the Digital Markets, Competition and Consumers Act 2024 (Commencement No. 1 and Savings and Transitional Provisions) Regulations 2024 were published. The regulations bring into force certain provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024) on 1 January 2025. The DMCCA 2024 creates a digital markets regime regulated by the Competition & Markets Authority to address the high concentration of market power in a small number of digital businesses and contains wide-ranging reforms to strengthen UK competition.

FCA seeks further views on enforcement investigations

On 28 November 2024, the FCA published a consultation paper seeking further input on the prorposed greater transparency of its enforcement investigations. The consultation closes on 17 February 2025.

Orders sought by Takeover Panel

On 28 November 2024, the High Court granted orders sought by the Takeover Panel under section 955 of the Companies Act 2006, to secure compliance with rulings made by the Hearings Committee requiring the payment of compensation by three former members of the management of MWB Group Holdings plc for breaches of Rule 9 of the Code. This is only the second time a court has considered section 955 of the Companies Act 2006.

Government responds on turnover and control regulations under the DMCCA 2024

On 29 November 2024, the Department for Business and Trade published its response to the earlier consultation on draft legislation to be made under powers provided for by the DMCCA 2024. The consultation sought views on three sets of draft regulations that set out how turnover should be estimated or calculated. The regulations will come into force on 1 January 2025, along with certain other provisions of the DMCCA 2024.

FCA publishes consultation on regulatory fees for 2025/26

On 29 November 2024, the FCA published a consultation which seeks views on proposed policy changes to the way the FCA raises fees from 2025/26. Responses to the consultation are requested by 24 January 2025.

Looking ahead to December 2024

2 December – closing date for comments on ISS’ proposed benchmark policy updates for 2025.

3 December – Government response to consultation on draft turnover and control regulations under the Digital Markets, Competition and Consumers Act 2024 expected to be published by this date.

12 December – closing date for responses to Government’s call for evidence to inform its Financial Services Growth and Competitiveness Strategy which will be published in Spring 2025.

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