Capital Markets Update – March 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 regulatory developments within the equity capital markets and looking ahead to future developments.

February’s news

FCA publishes Primary Market Bulletin 20

On 7 February 2019, the Financial Conduct Authority (FCA) published Primary Market Bulletin 20 which includes an update on the phasing out of the name ‘UK Listing Authority’; a discussion on how to apply the Listing Rules if an issuer has previously had insufficient distributable reserves to pay dividends; and the latest changes the FCA has made, and is proposing to make, to the guidance in its Knowledge Base.

Threshold for an EU Prospectus

On 8 February 2019 the European Securities and Markets Authority published a list of thresholds in each EU member state below which an offer to the public of securities does not need a prospectus under the Prospectus Regulation.

Investment Association publishes analysis of voting trends during 2018

On 18 February 2019, the Investment Association published new analysis of voting trends during the 2018 AGM season. The analysis focuses on data from the Investment Association’s public register of shareholder votes which tracks significant shareholder dissent and includes FTSE All-Share companies which have received votes of 20% or more against any resolution or who withdrew a resolution prior to their AGM. The analysis shows that shareholder rebellions rose by over 25 per cent. in 2018 landing 120 companies on the public register.

Investment Association sets out guidelines relating to irredeemable preference shares

On 19 February 2019, the Investment Association published guidelines relating to the redemption or cancellation of irredeemable preference shares. The guidelines are to be read as of general application to listed companies and follow the central principle that issuers must follow a fair process and have regard to fair market practice, when seeking to redeem or cancel irredeemable preference shares.

Investment Association publishes statement on gender diversity and executive pensions

On 21 February 2019, the Investment Association announced that, during the 2019 AGM season, it will use its Institutional Voting Information Service to highlight companies that are not meeting certain targets on diversity or that pay pension contributions to executive directors at rates above the majority of the workforce.

FCA issues first competition infringement decision

On 21 February 2019, the FCA issued its first formal decision using its competition enforcement powers since it became a concurrent competition regulator in 2015. The decision found that three asset management firms had breached competition law by sharing strategic information during an initial public offering and a placing shortly before the share prices were set.

FCA publishes Primary Market Bulletin 21

On 22 February 2019, the Financial Conduct Authority published Primary Market Bulletin 21 which focuses on new regulatory obligations that issuers will need to implement for the Short Selling Regulation and the Market Abuse Regulation (MAR), if the UK leaves the EU on 29 March 2019 without an implementation period. For issuers with financial instruments admitted to trading or traded on a UK trading venue which are based in an EU Member State, the bulletin highlights key changes under MAR which will apply if the UK leaves the EU in a ‘no deal’ scenario.

New address for the Takeover Panel

On 27 February 2019 the Takeover Panel issued a statement notifying the markets that as of 11 March 2019 its address will be The Takeover Panel, One Angel Court, London EC2R 7HJ.

FCA issues policy statement on Brexit

On 28 February 2019 the FCA published a policy statement setting out responses to feedback received on its proposed changes to the FCA Handbook if the UK leaves the EU in a no deal scenario.

Looking ahead to March 2019

1 March 2019 – Closing date for Investment Association consultation into sustainability and responsible investment.

3 March 2019 – effective date for changes to FCA Handbook relating to the implementation of MiFID II.

27 March 2019 – closing date for FCA consultation on implementation of the revised Shareholder Rights Directive in the UK.

28 March 2019 – closing date for the FCA consultation on aligning the FCA Handbook with the new Prospectus Regulation.

28 March 2019 – notification window closes for the temporary permissions regime which will apply to EEA firms and investment funds that market in the UK in the event of a ‘no deal’ Brexit.

29 March 2019 – closing date for the Financial Reporting Council consultation on the draft 2019 Stewardship Code.

31 March 2019 – ESMA due to deliver technical advice to the EC on risk factors relating to the new Prospectus Regulation.