Capital Markets Update June 2022

8th June 2022

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.

May’s news

Glass Lewis updates report on gender diversity

On 2 May 2022, Glass Lewis published an update to its review of gender diversity in the FTSE 350 which looks at gender diversity statistics from FTSE 350 companies which held annual general meetings between 1 January to 31 December in each of 2019, 2020 and 2021.

Takeover Panel publishes amendments to the Takeover Code

On 5 May 2022, the Takeover Panel published Panel Statement 2022/9 announcing the publication by the Code Committee of a number of miscellaneous amendments to the Takeover Code. The amendments will take effect on 13 June 2022.

Takeover Panel removes restrictions on order book dealings

On 5 May 2022, the Takeover Panel published Panel Statement 2022/9 announcing the publication by the Code Committee of amendments to the Takeover Code to remove the restriction on anonymous order book dealings. The amendments will take effect on 13 June 2022.

LSE consults on rules for new Voluntary Carbon Market

On 11 May 2022, the London Stock Exchange (LSE) launched a consultation seeking views on amendments to its Admission and Disclosure Standards to create and administer its new Voluntary Carbon Market for publicly traded carbon funds. Responses to the consultation are requested by 11 July 2022 and the LSE expects to confirm the final rules in September 2022.

Government publishes call for evidence on Green Finance Strategy

On 12 May 2022, the Department for Business, Energy and Industrial Strategy (BEIS) published a Call for Evidence seeking evidence and views to support a proposed update to the Green Finance Strategy launched in 2019. Responses are requested by 22 June 2022 and BEIS plans to publish the updated Strategy in late 2022.

Implication of war in Ukraine on half-yearly reports

On 13 May 2022, the European Securities and Markets Authority (ESMA) issued a public statement addressing the preparation of interim financial statements under IFRS and the interim management reports for the 2022 half-yearly reporting periods in the context of the events in Ukraine.

FRC confirms no amendments to FRS 101

On 19 May 2022, the Financial Reporting Council (FRC) issued a press release confirming that no amendments will be made to the FRS 101 Reduced Disclosure Framework following the conclusion of its annual review.

30% Club publishes guidance on diversity reporting

On 24 May 2022, the 30% Club UK Investor Group published guidance for companies reporting on diversity. The guidance includes examples which are intended to highlight useful or innovative approaches by companies.

FCA planning reform of the listing regime to boost growth and competitiveness

On 26 May 2022, the Financial Conduct Authority (FCA) issued a press release setting out potential reform to the way companies list in the UK the aim of which is to attract more high quality, growth companies and give investors greater opportunities.

Takeover Panel announces proposed changes to the definition of ‘acting in concert’

On 26 May 2022, the Takeover Panel issued Panel Statement 2022/11 announcing the publication of a public consultation paper which sets out a number of proposed amendments to the presumptions of the definition of ‘acting in concert’ in the Takeover Code.

FCA publishes Primary Market Bulletin 40

On 27 May 2022, the FCA published the 40^th edition of the Primary Market Bulletin which highlights changes being made to the FCA’s Knowledge Base relating to the prospectus regime.

Dormant Assets regulations published

On 27 May 2022, the Dormant Assets Act 2022 (Commencement) Regulations 2022 were published which bring the proceeds and distributions from dormant shares in public limited companies traded on a UK regulated market or UK multilateral trading facility within the scope of the dormant assets scheme.

FCA Handbook Notice 99

On 27 May 2022, the FCA published Handbook Notice No 99, setting out, among other things, its response to feedback received to its proposals to make various amendments to the Prospectus Regulation Rules and Listing Rules consequential to the changes to the Knowledge Base proposed in its 34th Primary Markets Bulletin.

Government publishes response to consultation on audit reform

On 31 May 2022, Government published its response to the March 2021 consultation paper on restoring trust in audit and corporate governance. The response outlines reforms in relation to public interest entities, directors’ accountability, new corporate reporting requirements, supervision of corporate reporting, enforcement against company directors and clawback and malus in directors’ remuneration and the establishment and responsibilities of the new regulator, the Audit, Reporting and Governance Authority.

Looking ahead to June 2022

13 June – amendments to the Takeover Code take effect.

13 June – restrictions on anonymous order book dealings removed from this date.

22 June – closing date for responses to call for evidence on Government’s Green Finance Strategy.

28 June – end date for various temporary measures introduced by the FCA in response to COVID-19.

28 June – end date for the LSE temporary COVID-19 measures for AIM companies.