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Capital Markets Update: March 2024

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.

Capital Markets Update April 2024

February’s news

Director fined for misleading financial promotions

On 13 February 2024, the Financial Conduct Authority (FCA) published the final notice it has issued to Floris Jakobus Huisamen, a former director of London Capital and Finance plc. The FCA has fined Mr Huisamen a substantial amount and banned him from performing any function relating to any regulated financial activity for his role in signing off misleading financial promotions concerning minibonds.

FCA publishes Market Watch 77

On 14 February 2024, the FCA published Market Watch 77, its newsletter on market conduct and transaction reporting issues. In this edition, the FCA focuses on the trading activities of organised crime groups (OCGs). A significant component of the suspicious trading observed by the FCA in equity markets relates to suspicious trading by members of OCGs in products whose underlying securities are UK and internationally listed equities. The newsletter highlights the measures that firms can take to guard against employees, particularly junior members of staff, being used by OCGs as sources of inside information. These include advising staff who work in M&A of the risks of including references to their job in social media profiles and considering whether it’s appropriate to refer to the names of junior employees engaged in M&A advisory in the firm’s own social media profiles.

PLSA publishes voting guidelines

On 15 February 2024, the Pensions and Lifetime Savings Association (PLSA) published its 2024 stewardship and voting guidelines. Amendments to the 2023 version are in relation to cybersecurity, artificial intelligence, climate change and sustainability, social factors and executive remuneration.

Investment Association updates guidance on executive remuneration

On 26 February 2024, the Investment Association (IA) published a letter sent to remuneration committee chairs giving an update on the IA principles of remuneration. The letter highlights the remuneration issues that may be important to IA members during the 2024 AGM season. In particular, as inflation is still relatively high, the IA expects companies to continue to consider salary increases for executives in the context of pay for all employees.

FRC launches review of Stewardship Code

On 27 February 2024, the Financial Reporting Council (FRC) launched a fundamental review of the UK Stewardship Code 2020 to ensure it supports economic growth and the UK’s competitiveness. The FRC is seeking views from all stakeholders on whether the code is being used by asset managers, asset owners and other signatories to the code in a way that drives better stewardship outcomes through effective engagement with investee companies.

FCA publishes consultation on publicising enforcement investigations

On 27 February 2023, the FCA published a consultation paper setting out the FCA’s proposals to increase transparency around enforcement investigations and proposed changes to its enforcement guide. The reforms aim to increase the deterrent impact of the FCA’s enforcement actions. Under the proposals, the FCA will publish information on enforcement investigations when they are opened, as well as appropriate updates, and will announce when cases have been closed with no enforcement outcome. The consultation closes on 16 April 2024.

FTSE Women Leaders Review report published

On 27 February 2024, the FTSE Women Leaders Review published a report on gender balance in FTSE leadership. The report shows, amongst other things, that as of 11 January 2024, women held 42.6% of FTSE 100 board positions (up from 40.5% in 2022).

Looking ahead to March 2024

4 March – companies filing paper documents at Companies House will need to send them to the Cardiff office from this date.
4 March – introduction of the first set of reforms brought in by the Economic Crime and Corporate Transparency Act 2023 at Companies House.
22 March – closing date for responses to detailed proposals to radically reform the existing listing regime for equity shares set out in FCA Consultation Paper 23/31.
22 March – closing date for responses to the Law Commission’s consultation on a draft Property (Digital Assets etc) Bill.

John
Hamer

Chair of the LLP, Partner

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Jackson

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Duke

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