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Capital Markets Update – January 2021

Business Meeting 10 Print publication

06/01/2021

This month’s news

QCA publishes AIM Good Governance Review 2020/21

On 2 December 2020, the Quoted Companies Alliance (QCA) published its AIM Good Governance Review 2020/21. The review analyses the governance disclosures of 50 small and mid-sized quoted companies and focuses on how they have responded to COVID-19; how investors examine corporate culture; and what investors want to see in 2021 from companies in relation to environmental, social and governance, remuneration, and general governance disclosures.

European Commission’s new CMU Action Plan

On 2 December 2020, the European Council approved a set of conclusions on the European Commission’s CMU Action Plan, which was published on 24 September 2020. The conclusions set out the Council’s priorities amongst the outlined measures to provide the Commission with guidance when preparing future legislation and non-legislative initiatives.

FCA publishes Primary Market Bulletin 32

On 3 December 2020, the Financial Conduct Authority (FCA) published Primary Market Bulletin 32, in which it reminds issuers, investors and other market participants of certain changes that will take effect when onshored legislation enters into force at the end of the Brexit transition period. In particular, it summarises the key changes to the market abuse regime that will take effect at the end of the transition period.

FRC publishes updated guidance on corporate reporting

On 4 December 2020, the Financial Reporting Council (FRC) published updated guidance for companies on corporate governance and reporting during the COVID-19 pandemic. The guidance updates the versions previously published in March and May 2020.

FCA issues quarterly consultation paper

On 4 December 2020, the FCA published its quarterly consultation paper which consults on various proposed minor amendments to the FCA Handbook.

BEIS updates policy paper on ESEF Regulation

On 9 December 2020, the Department for Business, Energy and Industrial Strategy (BEIS) published an updated policy paper on Government’s position on the effects of the European Single Electronic Format (ESEF) requirements for annual financial reporting. The policy paper sets out Government’s position on the directors’ sign-off of accounts of those companies that are subject to the requirements of the Disclosure Guidance and Transparency Rules and the ESEF Regulation.

QCA publishes remuneration committee guide

On 9 December 2020, the QCA published a new edition of its remuneration committee guide aimed at the remuneration committees of smaller and mid-cap quoted companies. The guide, which can be ordered from the QCA website, seeks to confirm the QCA’s recommendations for best practice, while also providing an outline of the main roles and responsibilities of the remuneration committee.

Proposed ban on corporate directors

On 9 December 2020, BEIS published a consultation on implementing a prohibition on corporate directors. It is proposed that, alongside commencement of the prohibition, regulations be brought forward to provide for a principles-based exception to the prohibition. The consultation closes on 3 February 2021.

Consultation on improving financial information on the companies register

On 9 December 2020, BEIS published a consultation on improving the quality and value of financial information on the UK companies register. The consultation closes on 3 February 2021.

Consultation on powers of the Registrar of Companies

On 9 December 2020, BEIS published a consultation on proposals to reform the powers of the Registrar of Companies. The consultation closes on 3 February 2021.

LSE publishes amended Primary Market Rulebooks

On 10 December 2020, the London Stock Exchange (LSE) published Market Notice N20/20, which confirms proposed changes to its Primary Market Rulebooks and AIM Rules for Companies that will apply following the end of the Brexit transition period on 31 December 2020.

FCA publishes Handbook Notice 83

On 11 December 2020, the FCA published Handbook Notice 83, which covers amendments to the FCA Handbook and other materials made on 7 and 10 December 2020.

Guidance on gender pay gap reporting

On 14 December 2020, the Equalities Office published a collection of guidance for employers on gender pay gap reporting.

Final version of delegated regulation published

On 16 December 2020, the European Commission published the final version of its delegated regulation supplementing the Prospectus Regulation as regards the minimum information content of the document to be published for a prospectus exemption in connection with a takeover by means of an exchange offer, a merger or a division.

Briefing paper on corporate crime liability published

On 18 December 2020, the House of Commons Library published Briefing Paper (Number 9027): Corporate Criminal Liability, which discusses the circumstances in which corporates can commit crimes in England and Wales.

FRC publishes amendments to accounting standards

On 21 December 2020 the FRC published amendments to update UK accounting standards, including FRS 100, FRS 101, FRS 102, FRS 104 and FRS 105, for changes in legislation that come into effect following the end of the transition period.

FCA publishes final position in relation to climate-related financial disclosures

On 21 December 2020, the FCA published Policy Statement 20/17, which summarises feedback it received on its policy proposals in relation to climate-related disclosures by commercial companies with a UK premium listing.

FRC publishes guidance on preparing IAS accounts

On 23 December 2020, the FRC published guidance for companies preparing IAS accounts for accounting periods straddling the end of the transition period (11pm on 31 December 2020).

Looking ahead to January 2021

1 January 2021 – issuers must prepare their annual financial report in a machine-readable electronic reporting format for financial years beginning on or after 1 January 2021.

1 January 2021 – new rule LR 9.8.6R(8) of the Listing Rules (climate-related financial disclosures) applies in relation to financial years beginning on or after 1 January 2021.

5 January 2021 – HM Treasury’s call for evidence in relation to a review of the listing regime closed.

6 January 2021 – Government’s consultation on proposed draft definitions of 17 sensitive sectors in which it will be mandatory to notify and gain approval for certain types of transactions under the draft National Security and Investment Bill closed.

8 January 2021 – the Competition and Markets Authority’s consultation period inviting comments on the revised version of its merger assessment guidelines closes.

8 January 2021 – the House of Commons Treasury Committee’s call for evidence in relation to its inquiry into the future of financial services in the UK after the Brexit transition period closes.

15 January 2021 – the Code Committee of the Takeover Panel’s consultation on proposed changes to the Takeover Code relating to conditions to offers and the offer timetable closes.

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