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Capital Markets Update – April 2020

Business Meeting 10 Print publication

01/04/2020

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.

March’s news

Report published on climate-related disclosures

The European Corporate Reporting Lab has published a Report entitled “How To Improve Climate-Related Reporting – A Summary of Good Practices From Europe and Beyond”. The Report primarily focuses on European companies and highlights good reporting practices as well as providing an assessment of the level of implementation of climate-related disclosures from both a mandatory and a voluntary point of view.

European IPO Task Force report

On 2 March 2020, the European IPO Task Force published a Report containing policy recommendations designed to reverse the trend of the declining numbers of IPOs on European markets.

FCA issues statement on Coronavirus

On 4 March 2020, the Financial Conduct Authority (FCA) published a Statement on Coronavirus (COVID-19). The statement notes that the FCA expects all firms to have contingency plans in place to deal with a major event and to take all reasonable steps to meet their regulatory obligations.

IA publishes Good Stewardship Guide 2020

On 5 March 2020, the Investment Association (IA) issued a Press Release announcing the publication of its Good Stewardship Guide 2020. The guide sets out the IA’s expectations of companies during the 2020 AGM season in relation to issues including climate change, executive pay, audit quality and diversity, and highlights particular trends for 2020 in these areas.

FCA consultation on climate-related and other ESG disclosures

On 6 March 2020, the FCA published Consultation Paper 20/3 on its policy proposals to enhance climate-related disclosures by listed issuers and to clarify existing disclosure obligations. Responses are requested by 5 June 2020 and the new rules would apply in relation to accounting periods beginning on or after 1 January 2021.

FCA Handbook quarterly consultation paper

On 6 March 2020, the FCA issued a Press Release publishing its quarterly consultation paper which consults on various proposed minor amendments to the FCA Handbook. Responses are requested by 3 April 2020 and 1 May 2020.

ISS publishes proxy climate voting guidelines

On 9 March 2020, Institutional Shareholder Services (ISS) announced that it had launched new international Climate Proxy Voting Guidelines which are intended to provide guidance to investors when exercising their voting rights in relation to their portfolio companies’ climate disclosures and performance.

FCA consultation on changes to listing regime for OEICs

On 9 March 2020, the FCA published Consultation Paper 20/5 which sets out proposed changes to the Listing Rules to create a more proportionate listing regime for open-ended investment companies (OEICs). The consultation closes on 9 June 2020.

ESMA recommends action to counter threat from COVID-19

On 11 March 2020, the European Securities and Markets Authority (ESMA) published a Statement urging market participants to actively address the impact of the COVID-19 outbreak on financial markets.

Energy and carbon reporting

On 13 March 2020, the Government issued a Press Release announcing that businesses can now digitally report their energy and carbon data under the Streamlined Energy and Carbon Reporting legislation in the same way that they report their financial data.

FCA updates NSM webpage

On 16 March 2020, the FCA updated its designated National Storage Mechanism (NSM) Webpage ahead of the prospective launch on 30 March 2020 of the new NSM portal (but see later in this update).

New name for NEX Exchange

On 16 March 2020 the Aquis Stock Exchange (AQSE) reissued its Main Market Admission and Disclosure Standards and Growth Market Rules for Issuers, following the renaming of NEX Exchange as Aquis Stock Exchange. References to NEX Exchange have been replaced with references to AQSE throughout both sets of rules, and the Main Market Admission and Disclosure Standards have also been amended to replace references to NEX Exchange Main Board with references to AQSE Main Market.

Guidance on shareholder meetings

On 16 March 2020, ICSA, The Chartered Governance Institute and Slaughter and May produced joint Guidance (with the support of a number of other organisations) on planning AGMs in the light of the COVID-19 outbreak.

FCA publishes Primary Market Bulletin

On 17 March 2020, the FCA published Primary Market Bulletin 27 to provide key commentary for issuers and market participants in light of the Covid-19 pandemic.

FCA launches new webpage

On 17 March 2020, the FCA launched a new Webpage containing information for firms on COVID-19 response. The FCA will update this page over the coming weeks and expects to modify its guidance to firms as the situation unfolds.

EU Merger notifications

The European Commission has issued Practical Information regarding EU mergers, stating that companies should delay merger notifications until further notice where possible due to the COVID-19 outbreak.

Takeover Panel issues COVID-19 updates

On 17 March 2020, the Takeover Panel published Panel Statement 2020/2 regarding working arrangements in light of COVID-19. The Panel requests that parties wishing to contact the Panel during this period do so by email where possible.

Corporate environmental reporting

On 17 March 2020, the Company Transparency (Carbon in Supply Chains) Bill 2019-21 was introduced to Parliament. It is a private members’ bill requiring companies to prepare an annual statement on carbon in their supply chains, and for connected purposes. The second reading is scheduled for 15 May 2020.

PIRC publishes voting guidelines

Pensions & Investment Research Consultants Ltd (PIRC) has published its Annual Shareowner Voting Guidelines 2020. The guidelines set out PIRC’s views and recommendations on best practices in relation to board structure, remuneration policy and management of social and environmental issues.

Inside AIM reports on changes to AIM Rules

On 20 March 2020, AIM Regulation published an Inside AIM newsletter setting out temporary measures it proposes to implement during the coronavirus pandemic. Inside AIM: Coronavirus – Temporary Measures states that, until further notice, discretion will be applied to the application of certain AIM Rules for Companies and AIM Rules for Nominated Advisers.

BEIS requests help on delivering audit reform

On 20 March 2020, the Department for Business, Energy and Industrial Strategy (BEIS) Committee issued a Call for Evidence to develop a roadmap for implementing meaningful reform of the UK’s audit industry. This follows three independent reviews of the UK’s audit industry over the last couple of years

FCA requests delay in announcements of financial statements

On 21 March 2020, the FCA wrote a Letter to all listed companies (those whose shares are listed on the Official List) that were intending to publish preliminary financial statements within the next two weeks, requesting them to delay their planned publication.

Pay gap reporting suspended

On 24 March 2020, the Government Equalities Office and the Equality and Human Rights Commission confirmed that the enforcement of all gender pay gap reporting deadlines has been suspended for reporting year 2019–20 due to the coronavirus (COVID-19) pandemic, and employers do not need to provide their data.

Companies House announces accounts filing extension

On 25 March 2020, Companies House published a Press Release announcing that companies would have an additional 3 months to file accounts in the light of the COVID-19 outbreak.

LSE announces changes to dividend timetable

On 25 March 2020, the London Stock Exchange (LSE) published Market Notice N07/20 which provides issuers with guidance in relation to payment dates under the 2020 Dividend Procedure Timetable. This was in response to market conditions and enquiries from issuers and their advisers regarding deferral or cancellation of their dividend payments because of COVID-19.

New NSM portal will not be launched as planned

On 26 March 2020, the FCA updated its designated National Storage Mechanism (NSMWebpage to state that the new NSM portal will not be launched on 30 March 2020 as previously communicated.

Joint statement to the capital markets in relation to the pandemic

On 26 March 2020, the FCA, FRC and PRA issued a Joint Statement announcing a number of measures intended to ensure that information flows to investors and to support the UK’s capital markets during the COVID-19 pandemic.

LSE extends reporting deadlines

On 26 March 2020, the LSE published an edition of Inside AIM announcing that AIM companies can apply for a three-month extension to the reporting deadline for the publication of their annual audited accounts under Rule 19 AIM Rules.

ESMA issues guidance on financial reporting deadlines under the Transparency Directive

On 27 March 2020, ESMA issued a public statement (Public statement: Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive (ESMA31-67-742)) aimed at promoting coordinated action by National Competent Authorities regarding listed issuers’ obligations to publish periodic information under the Transparency Directive in the context of the COVID-19 pandemic.

ISCA publishes AGM guidance

On 27 March 2020, ICSA, The Chartered Governance Institute announced that it has published Supplementary Guidance on contingency planning for AGMs during the current COVID-19 epidemic.

FCA publishes Handbook Notice 75

On 27 March 2020, the FCA published Handbook Notice 75, which covers amendments to the FCA Handbook and other materials made on 26 March 2020.

ICGN publishes information on shareholder meetings

On 27 March 2020, the International Corporate Governance Network (ICGN) published its viewpoint on how different markets are approaching shareholder meetings during the COVID-19 pandemic.

BEIS announces measures in relation to shareholder meetings

On 28 March 2020, the Government issued a Press Release confirming further measures aimed at supporting businesses in light of COVID-19.  These include the introduction of legislation to enable companies to hold AGMs in a way which is consistent with the restrictions on movement and gatherings.

Looking ahead to April 2020

20 April 2020 – closing date for the European Commission consultation on how MiFID and MiFIR are functioning after two years of operation.

Contacts