Capital Markets Update: September 2023 – August’s news

DBT publishes framework for UK adoption of IFRS Sustainability Disclosure Standards

On 2 August 2023, the Department for Business and Trade (DBT) published guidance on Government’s framework for creating UK Sustainability Disclosure Standards (UK SDS). UK SDS will be based on IFRS Sustainability Disclosure Standards and set out corporate disclosures on the sustainability related risks and opportunities that companies face. The standards will form the basis of future legislative or regulatory requirements for corporate sustainability reporting.

Consultation on proposed international standard on sustainability assurance

On 2 August 2023, the International Auditing and Assurance Standards Board published an exposure draft of proposed International Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements. The proposed standard is aimed at enhancing the trust and confidence investors, regulators and other stakeholders have in sustainability information. Comments are requested by 1 December 2023.

FCA consults on new securitisation rules

On 7 August 2023, the Financial Conduct Authority (FCA) published a consultation paper on proposed new rules to replace the firm-facing provisions from the UK Securitisation Regulation which are being transferred into the FCA Handbook as part of the repeal and replacement of retained EU law. The consultation paper includes a proposed legal instrument and all related technical standards and their annexes. The FCA plans to publish the new rules in the first half of 2024 and comments are invited on the consultation until 30 October 2023.

FCA publishes Primary Market Bulletin 45

On 10 August 2023, the FCA published Primary Market Bulletin 45 which, amongst other things, covers the implementation of International Sustainability Standards Board standards (IFRS S1 and S2) for listed companies.

Financial Services and Markets Act 2023 commencement regulations published

On 24 August 2023, the Financial Services and Markets Act 2023 (Commencement No. 2 and Transitional Provisions) Regulations 2023 were published. The regulations set commencement dates for key provisions in the Financial Services and Markets Act 2023 not already in force. For example, from 6 September 2023, the FCA will be able to give directions, give guidance and to make rules in relation to the new financial promotions legislation.

Response published to review of non-financial reporting framework

On 25 August 2023, the City of London Law Society published a response prepared by a joint working party of the Company Law Committees of the CLLS and the Law Society of England and Wales to Government’s call for evidence seeking views on the non-financial information UK companies are required to include in their annual reports.

FCA revokes transitional direction for share trading obligation

On 29 August 2023, the FCA published a direction on the revocation of its transitional direction for the share trading obligation under the UK Markets in Financial Instruments Regulation (600/2014) (UK MiFIR), together with a background note on the revocation. The transitional direction modified Article 23(1) of UK MiFIR so that an investment firm did not breach the share trading obligation if a trade took place on an EU trading venue or systematic internaliser. The direction specifies that the transitional direction is revoked with effect from 29 August 2023.

FCA updates operation of MiFIR transparency regime

On 29 August 2023, the FCA published an updated version of its statements of policy on the operation of the MiFIR transparency regime. The FCA has removed the statement of policy on its power to suspend the use of pre-trade transparency waivers for a trading venue under the double volume cap mechanism. The updated document reflects amendments made to UK MiFIR by the Financial Services and Markets Act 2023 (FSMA 2023). Among other things, FSMA 2023 deleted Article 5 of the UK MiFIR, which contains provisions on the double volume cap mechanism.

QCA publishes report on corporate governance

On 30 August 2023, the Quoted Companies Alliance (QCA) published a report analysing the adoption and compliance by companies of corporate governance codes, with a particular focus on the QCA Corporate Governance Code. The report concentrates on companies listed on AIM, AQSE and the standard listing segment of the Main Market.

Looking ahead to September 2023

11 September – closing date for responses to the FCA’s Guidance consultation GC23/2, Financial promotions on social media.

13 September – closing date for responses to the FRC’s consultation on proposed revisions to the UK Corporate Governance Code.

25 September – feedback on the Digitisation Taskforce’s interim report should be received by this date.

29 September – closing date for responses to the six FCA engagement papers discussing the new public offers and admissions to trading regime.

Capital markets update: September 2023 – how we can support you

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