4th July 2023
Welcome to the current edition of Capital Markets Update, the monthly briefing from the Corporate Group at Walker Morris rounding up the previous month’s regulatory developments within the equity capital markets and looking ahead to future developments.
On 7 June 2023, the Financial Services and Markets Act 2000 (Financial Promotion)(Amendment) Order 2023 (SI 2023/612) was published with an explanatory memorandum. The Order came into force on 8 June 2023 and 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.
On 19 June 2023, the Financial Reporting Council (FRC) published a research report discussing audit committee chairs’ views on, and approach to, ESG activities and reporting.
On 22 June 2023, the International Capital Market Association (ICMA) published a press release announcing that it has issued revised editions of its Climate Transition Handbook, Sustainability-Linked Bond Principles and Social Bond Principles. Additional materials updated or published include additional Q&As for green, social and sustainability bond securitisation, a handbook on impact reporting, suggested impact reporting metrics for renewable energy and a high-level mapping to sustainable development goals.
On 26 June 2023, the International Sustainability Standards Board (ISSB) issued its inaugural sustainability disclosure standards, IFRS S1 and IFRS S2. IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate with investors about the sustainability-related risks and opportunities that they face, while IFRS S2 provides specific climate-related disclosures.
On 28 June 2023, the Pensions and Lifetime Association (PLSA) published a response to the Financial Conduct Authority (FCA) consultation on primary markets effectiveness. The FCA consultation proposes replacing the standard and premium listing share categories with a single category in response to a 40% drop in the number of UK listed companies since 2008. The PLSA believes such a measure would have broadly negative consequences.
On 29 June 2023, the Investment Association published new guidance providing institutional investors with an overview of the key steps required to effectively file a shareholder resolution with a UK company. It outlines key barriers (including in relation to inside information under UK MAR, acting in concert provisions under the Takeover Code and DTR 5 disclosures), as well as guidance on mitigating barriers.
On 29 June 2023, FRC Lab published an updated report on the policy and practice of dividend disclosure. The insight report notes that Government confirmed its proposals to introduce new reporting requirements in relation to dividends, requiring public interest entities (i.e. entities with transferrable securities listed on a UK regulated market, credit institutions and insurance undertakings, together with (if Government’s current plans take effect) private companies and AIM-listed companies with at least 750 employees and £750 million annual turnover) to disclose their distributable reserves and explain the board’s long-term approach to the amount and timing of shareholder returns.
21 July – closing date for responses to the Takeover Panel’s public consultation paper on proposed amendments to Rule 21 (restrictions on frustrating action) of the Takeover Code.
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Corporate and Head of Food & Drink
Corporate and Head of International