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Capital Markets update – January 2022

Business Meeting 10 Print publication

04/01/2022

Happy New Year and 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.

December’s news

FRC publishes review of reporting against UK Stewardship Code 2020

On 1 December 2021, the Financial Reporting Council (FRC) published a review into effective stewardship reporting which analyses how signatories to the UK Stewardship Code 2020 have reported against it during the year.

QCA publishes AIM Good Governance Review 2021/22

On 1 December 2021, the Quoted Companies Alliance (QCA) and UHY Hacker Young published their annual AIM Good Governance Review 2021/22, which outlines the key trends during the year in the corporate governance performance of small and mid-sized AIM companies.

FCA implements reforms to improve the effectiveness of UK primary markets

On 2 December 2021, the Financial Conduct Authority (FCA) published the results of its review into the effectiveness of UK primary markets. The policy statement sets out feedback and final changes to the Listing Rules which came into force on 3 December 2021.

Takeover Panel announces consultation on amendments to the Takeover Code

On 2 December 2021, the Takeover Panel announced the publication of Public Consultation Paper 2021/1 which proposes amendments to various provisions of the Takeover Code. In addition, the Takeover Panel has also announced that, with immediate effect, the Panel Executive will only accept bid documentation in electronic form.

Glass Lewis updates its approach to executive remuneration

On 2 December 2021, Glass Lewis published an updated version of its approach to executive remuneration in the context of the COVID-19 pandemic. The guidance has been amended to remove specific references to fiscal years, and to clarify that it will apply throughout the course of the COVID-19 pandemic.

AQSE publishes response to consultation on SPACs

On 7 December 2021, Aquis Stock Exchange (AQSE) published its Response to the October 2021 consultation on proposed changes to the rules governing the eligibility criteria and ongoing obligations applicable to special purpose acquisition companies (SPACs) on the Access segment of the AQSE Growth Market.

FRC consults on annual review of FRS 101

On 7 December 2021, the FRC issued FRED 79 which proposes no amendments to FRS 101 as a result of its latest annual review. FRS 101 requires a company to apply EU-adopted IFRS subject to specified disclosure exemptions. Comments on FRED 79 are requested by 1 March 2022.

ISS publishes update to its 2022 Proxy Voting Guidelines

On 7 December 2021, Institutional Shareholder Services (ISS) published updates to its UK proxy voting guidelines for 2022. The updates will be effective for meetings held on or after 1 February 2022.

FCA publishes Primary Market Bulletin 37

On 9 December 2021, the FCA published Primary Market Bulletin 37, its newsletter for primary market participants.

FRC publishes report on corporate culture

On 9 December 2021, the FRC published Report: Creating Positive Culture which aims to promote good practice and positive working culture in companies.

HM Treasury publishes response on power to block listings on national security grounds

On 10 December 2021, HM Treasury published its response to a consultation launched in June 2021 which requested views on the scope of Government’s proposed new power to block an issuer’s listing, if that listing presents a risk to national security.

2021 UK Spencer Stuart Board Index published

On 13 December 2021, Spencer Stuart published the 26th edition of its UK Board Index which provides a comprehensive review of board composition and governance practice in the FTSE 150.

HM Treasury consults on reforms to Financial Promotion Order 2005

On 15 December 2021, HM Treasury launched a consultation which sets out proposals to reform exemptions in the Financial Promotion Order 2005 relating to high net worth individuals and sophisticated investors. The consultation closes on 9 March 2022.

Government publishes response to prospectus consultation

On 16 December 2021, Government published its response to the consultation launched in July 2021 requesting views on proposals to reform the UK’s prospectus regime.

FCA publishes final rules on climate-related disclosures

On 17 December 2021, the FCA published its final rules on climate-related financial disclosures for standard listed companies and certain regulated firms.

Looking ahead to January 2022

1 January – changes to the Listing Rules that require a new annual statement on board diversity take effect for accounting periods beginning on or after this date.

1 January – proposed changes to the Listing Rules requiring standard listed companies to make climate-related disclosures take effect for accounting periods beginning on or after this date.

7 January – responses to FCA consultation on new sustainability disclosure requirements for asset managers and a new classification and labelling system for sustainable investment products, are requested by this date.

10 January – minor changes to the Listing Rules, Prospectus Regulation Rules, Disclosure Guidance and Transparency Rules and the FCA Glossary to simplify the FCA’s rulebooks and to reflect changes in technology and market practice, come into force on this date.

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