Capital Markets Update – January 2019

Business Meeting 10 Print publication


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 developments within the equity capital markets and looking ahead to future developments.

December’s news

QCA publishes corporate governance behaviour review 2018

On 3 December 2018, the Quoted Companies Alliance announced that it had published its Corporate Governance Behaviour Review 2018. The review analyses the corporate governance disclosures of 50 AIM companies to examine the impact of the recent changes to AIM Rule 26 which require all AIM companies to comply or explain against a recognised corporate governance code.

ISS publishes benchmark policy recommendations

On 6 December 2018, Institutional Shareholder Services (ISS) published its UK and Ireland Proxy Voting Guidelines which form the basis of the ISS benchmark vote recommendations for companies listed in the UK and Ireland.

LSE publishes AIM disciplinary notice

On 7 December 2018, the London Stock Exchange published a disciplinary notice against a company for breaches of Rules 11 (General disclosure of price sensitive information) and 31 (AIM company and directors’ responsibility for compliance) of the AIM Rules for Companies.

Proposed changes to Rule 29 of the Takeover Code

On 7 December 2018, the Law Society together with the City of London Law Society published their joint response to the Takeover Panel’s proposed amendments to Rule 29 of the Takeover Code relating to asset valuations. Amongst other things, the response notes that it would be helpful for the Takeover Panel to issue a short practice statement in relation to those asset classes considered to be affected by the regime.

GC100 publishes guidance on directors’ remuneration reporting

Also on 7 December 2018, the GC100 and Investor Group published an updated version of its Directors’ Remuneration Reporting Guidance to reflect the Companies (Miscellaneous Reporting) Regulations 2018 which apply to financial years beginning on or after 1 January 2019.

FCA updates guidance on insider dealing and market manipulation

On 13 December 2018, the Financial Conduct Authority published an updated Financial Crime Guide for Firms which includes new material on insider dealing and market manipulation. The guide outlines the FCA’s observations of good and bad market practice around the requirement to detect, report and counter the risk of financial crime, as it relates to insider dealing and market manipulation.

New rules adopted by the EC to promote SME Growth Markets

On 13 December 2018, the European Commission issued a press release announcing that it has adopted a new Commission Delegated Regulation intended to further improve and diversify funding sources for small and medium-sized enterprises.

FRC announces major project examining corporate reporting

On 17 December 2018, the FRC issued a press release announcing that it has formed an advisory group which will embark on a major project on the ‘Future of Corporate Reporting’.

FRC to be replaced by the Audit, Reporting and Governance Authority

On 18 December 2018, the Government announced that the Financial Reporting Council is to be replaced with a new independent statutory regulator, which is accountable to Parliament, and which has clear statutory powers and objectives. The new regulator will be called the Audit, Reporting and Governance Authority.

Government launches review into UK audit standards

Also on 18 December 2018, the Government announced the launch of an independent review into what the standards and requirements should be for the UK audit profession. Donald Brydon, the outgoing chairman of the LSE, will lead the review into what more can be done to ensure audits meet public, shareholder and investor expectations.

NEX Exchange Growth Market designation

On 20 December 2018, NEX Exchange published a Market Notice announcing that the NEX Exchange Growth Market had been designated as an ‘SME Growth Market’.

Looking ahead to January 2019

New corporate governance code takes effect

The new UK Corporate Governance Code applies to all premium listed companies for accounting periods starting on or after 1 January 2019.

Corporate reporting

On 1 January 2019 the Companies (Miscellaneous Reporting) Regulations 2018 come into effect introducing new company reporting requirements.

Ethnicity pay reporting

The consultation into ethnicity pay reporting ends on 11 January 2019.

New Prospectus Regulation

The deadline for the European Commission to adopt delegated legislation under the new Prospectus Regulation runs out on 21 January 2019.

Stewardship Code consultation

The consultation on a new Stewardship Code is due to end on 30 January 2019.