October’s news

FCA begins criminal proceedings against two individuals for insider dealing

On 3 October 2024, the Financial Conduct Authority (FCA) announced that it has started a criminal prosecution against Matthew and Nikolas West for insider dealing. They are jointly charged with conspiracy to deal in four stocks while having inside information. The alleged offending took place between 2016 and 2020, and it is alleged that the men made a profit of around £110,000.

Draft Securitisation Regulations published

On 7 October 2024, HM Treasury published a draft of The Securitisation (Amendment) (No. 2) Regulations 2024 (the Regulations) together with an explanatory memorandum. The Securitisation Regulations 2024, adopted in January 2024, include a provision requiring any originator and sponsor involved in a transaction to be established in the UK for the transaction to qualify as a simple, transparent and standardised (STS) securitisation. However, to maintain an adequate pool of STS products for UK regulated investors, the Securitisation Regulations 2024 also include a temporary “grandfathering” regime allowing any EU securitisations notified to the European Securities and Markets Authority as meeting EU STS criteria before and up to 31 December 2024 to also qualify as UK STS securitisations for the life of the transaction. The Regulations extend the expiry date of the temporary arrangement from 31 December 2024 to 30 June 2026.

New reporting requirements on payment practices and performance

On 7 October 2024, a revised draft of the Reporting on Payment Practices and Performance (Amendment) (No 2) Regulations 2024 was published and laid before Parliament. The regulations amend the Reporting on Payment Practices and Performance Regulations 2017 to require qualifying companies to publish information about their payment practices and policies in relation to retention clauses in any construction contracts that they have with suppliers. The regulations will come into force on 1 January 2025 and the new reporting requirements apply in respect of financial years beginning on or after 1 April 2025.

ICMA publishes recommendations for a sustainable commercial paper market

On 8 October 2024, the International Capital Market Association (ICMA) published a paper entitled The role of commercial paper in the sustainable finance market. The publication discusses the feasibility of commercial paper as a sustainable financing instrument and proposes best practice recommendations, with initial observations for the sustainability-linked commercial paper market.

Investment Association publishes updated Principles of Remuneration

On 9 October 2024, the Investment Association published updated Principles of Remuneration, which outline its members’ views on the commonly accepted approach to executive remuneration for the majority of companies. The principles have been simplified and updated following a fundamental review of the pay guidelines to reflect evolving investor expectations.

Operational separation of audit practices completed

On 10 October 2024, the Financial Reporting Council (FRC) announced that, following a three-year transition period, the ‘big four’ accountancy firms have completed the operational separation of their audit practices from their wider businesses in line with the FRC’s deadline of 30 September 2024.

DBT responds on proposed changes to corporate reporting

On 14 October 2024, the Department for Business and Trade (DBT) published the response to its May 2024 consultation on proposals aimed at simplifying corporate reporting. Most respondents supported increasing the medium-sized threshold from 250 to 500 employees and exempting medium-sized companies from producing a strategic report. However, the DBT clarified that these proposals will not be implemented immediately but will be considered as part of Government’s broader review of non-financial reporting.

Recommendations made to improve modern slavery legislation

On 16 October 2024, the House of Lords Modern Slavery Act 2015 Committee published a report on the Modern Slavery Act 2015. The report makes several recommendations for improvement, including to strengthen company accountability for modern slavery in their supply chains. It recommends making the content of modern slavery statements (and their publication on a central registry) mandatory, as well as introducing proportionate sanctions for non-compliance.

QCA publishes report on the future of smaller company capital markets in the UK

On 17 October 2024, the Quoted Companies Alliance (QCA) published a report discussing the fall in the number of smaller listed companies over the past 20 years. The report argues that rebuilding a vibrant market for this sector is crucial to help drive long-term investment and growth in the UK’s capital markets.

IoD launches its new code of conduct

On 23 October 2024, the Institute of Directors (IoD) issued a press release announcing the launch of its Code of Conduct for Directors. The code, which is voluntary and has no enforcement mechanism, aims to be a practical tool to help directors make better decisions and navigate the complex trade-offs that they deal with every day.

Draft guidance published on nature transition planning

On 27 October 2024, the Taskforce on Nature-related Financial Disclosures (TNFD) published a discussion paper setting out draft guidance for companies and financial institutions on developing and disclosing a nature transition plan.

Looking ahead to November 2024

1 November – closing date for responses to FRC discussion paper on the future policy direction of the UK digital reporting framework.

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