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Capital Markets Update – February 2020

Business Meeting 10 Print publication

05/02/2020

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.

January’s news

FRC publishes Annual Review of the UK Corporate Governance Code

On 9 January 2020, the Financial Reporting Council (FRC) published its Annual Review of the UK Corporate Governance Code which assesses reporting against the 2016 UK Corporate Governance Code as well as early adoption of the 2018 UK Corporate Governance Code.

ESMA publishes Strategic Orientation 2020-2022

On 9 January 2020, the European Securities and Markets Authority (ESMA) issued a Press Release stating that it had published its Strategic Orientation 2020-2022 which outlines its objectives for this period following the expansion of its responsibilities and powers to include enhanced supervisory convergence tools and more direct supervision responsibilities.

Fifth Anti-Money Laundering Directive in force

On 10 January 2020, Companies House published guidance on reporting a discrepancy about a beneficial owner on the PSC register, reflecting the Fifth Money Laundering Directive. Obliged entities must report to Companies House discrepancies between the information that they hold on a beneficial owner of a company, limited liability partnership, or Scottish limited or qualifying partnership and the information on the PSC register.

ESMA announces publication of Q&A

On 10 January 2020, ESMA issued a Press Release announcing that it will publish a list of questions received through its Q&A process in a spreadsheet available on the Q&A Webpage. The spreadsheet will be updated every Friday afternoon.

Financial Reporting Lab publishes report on workforce-related reporting

On 20 January 2020, the FRC’s Financial Reporting Lab published a Report providing practical guidance and examples on how companies can provide improved information on workforce matters to investors.

PLSA publishes 2019 AGM Voting Review

On 21 January 2020, the Pensions and Lifetime Savings Association (PLSA) issued a Press Release stating that it had published its 2019 AGM Voting Review which analyses the results and key themes of the 2019 voting season.

Equal Pay Act 2020

On 28 January 2020, the Equal Pay Bill had its first reading in the House of Lords Equal Pay Bill [HL] 2019-20. The Bill amends the Equality Act 2010 with regard to gender pay gap reporting.

FRC issue definition of ‘Other Entity of Public Interest’

On 30 January 2020, the FRC issued a revised Glossary which now includes a definition for an ‘Other Entity of Public Interest’. The publication of this amended glossary follows the announcement of revisions to the FRC’s Ethical Standard and revised Auditing Standards in December 2019.

Non-financial reporting regime consultation

On 30 January 2020, the European Commission published a consultation concerning a possible initiative to revise the non-financial reporting regime, potentially involving changes to the directive amending the Accounting Directive as regards disclosure of non-financial and diversity information by certain large companies and groups.

FCA publishes Handbook Notice 73

On 31 January 2020, the FCA published Handbook Notice 73 which includes an update for Brexit and covers changes to the FCA Handbook and other material made on 12 December 2019, 10 January 2020 and 30 January 2020.

Companies House publishes cross-border merger guidance

On 31 January 2020, Companies House published updated Guidance on cross-border merger filing requirements. Applications to implement cross-border mergers involving a UK company will continue to be capable of being made during the implementation period. Any such cross-border mergers will need to be completed and registered before 11pm on 31 December 2020.

ESMA publishes technical advice on the Prospectus Regulation

On 31 January 2020, ESMA published a Letter to the European Commission setting out its technical advice on general equivalence criteria for prospectuses drawn up under the laws of third countries under Article 29(3) Prospectus Regulation.

Changes to Companies House forms

On 31 January 2020, Companies House published Guidance setting out changes to various Companies House forms which will take effect following the end of the implementation period.

Looking ahead to February 2020

1 February 2020 – updated ISS benchmark policies should be applied for shareholder meetings taking place on or after 1 February 2020.

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