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Capital Markets Update – May 2021

Business Meeting 10 Print publication

05/05/2021

April’s news

ESMA publishes report on growth markets regime under MiFID II

On 7 April 2021, the European Securities and Markets Authority (ESMA) published its final report on the functioning of the SME growth markets regime under MiFID II. The report contains proposals which ESMA thinks should be considered for possible legislative changes. You can read the report here.

FRC publishes Strategy, Plan and Budget 2021/22

On 8 April 2021, the Financial Reporting Council (FRC) published its Strategy, Plan and Budget 2021/22.

AFME publishes ESG report

On 14 April 2021, the Association for Financial Markets in Europe (AFME) published a report into environmental, social and governance (ESG) disclosures for capital markets in Europe. The report sets out key elements of the European regulatory landscape for ESG disclosures and serves as a practical guide for financial institutions to understand the scope of existing ESG disclosure requirements and offers ideas for best practices in compliance.

IBE publishes briefing on board diversity

On 14 April 2021, the Institute of Business Ethics (IBE) published a board briefing on the Ethics of Diversity. The briefing presents a summary of the key conclusions and recommendations from the IBE’s recent report on ethics and the diversity of boards.

Takeover Code amendments published

On 15 April 2021, the Takeover Panel and the Code Committee of the Panel published Instrument 2021/2 which makes amendments to the Takeover Code to replace gender specific terms with gender neutral terms. The amendments will take effect on 5 July 2021.

Government responds to UK listing review

On 19 April 2021, the Chancellor issued a written ministerial statement setting out how Government intends to take forward certain recommendations made by Lord Hill in his independent review of the UK’s listing regime. The statement responds to the six recommendations that were directed towards HM Treasury.

Commission adopts proposal for Corporate Sustainability Reporting Directive

On 21 April 2021, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive. The Commission’s goal is to address deficiencies under the Non-Financial Reporting Directive and at the same time to expand its scope. Under the proposed Directive, affected companies would have to report information on a full range of environmental, social and governance (ESG) issues relevant to their businesses.

Government responds to the Kalifa review of UK Fintech

On 26 April 2021, the Chancellor issued a written ministerial statement summarising the actions that Government and regulators are taking in response to the recommendations of the Kalifa review of UK Fintech.

ICSA rebrands as The Chartered Governance Institute

On 27 April 2021, ICSA announced that it has completed its rebranding and will now be known as ‘The Chartered Governance Institute UK & Ireland’. The rebranding exercise began in 2018 when members of the global institute voted to change the name of the global body to The Chartered Governance Institute.

Glass Lewis publishes approach to ‘Say on Climate’ votes

On 27 April 2021, Glass Lewis published its approach to companies’ adoption of an annual shareholder vote on their climate strategies. Glass Lewis states that it has seen two main varieties of management proposals: those that establish a policy that would create the framework for the adoption of an annual vote on climate disclosure or strategy at future AGMs; and those that request shareholder approval of a company’s climate transition plan.

FCA consults on conduct and organisational requirements under MiFID

On 28 April 2021, the FCA published Consultation Paper 21/9 on changes to UK MiFID’s conduct and organisational requirements for research and best execution. The proposals in the consultation are an initial set of changes within the wider context of capital markets reforms being considered by the FCA and HM Treasury and responses are requested by 23 June 2021.

FCA proposes changes to financial promotion rules

On 29 April 2021, the FCA published a discussion paper seeking views on proposals to amend its financial promotion rules. Among other things, the FCA is considering whether, in relation to a firm’s obligation to withdraw a section 21 approval if it becomes aware that the promotion no longer meets the FCA’s financial promotion rules, it should include more prescriptive requirements in the Handbook for a section 21 approver to actively monitor a financial promotion after approval.

FCA announces consultation on SPACs

On 30 April 2021, the FCA published a consultation seeking views on proposed changes to the Listing Rules for certain special purpose acquisition companies (SPAC). The FCA proposes to remove the presumption that it will suspend the listing of a SPAC when the SPAC identifies a potential acquisition target, where the SPAC meets certain criteria. Comments should be received by 28 May 2021.

FCA publishes Handbook Notice 87

On 30 April 2021, the FCA published Handbook Notice 87 which covers amendments to the FCA Handbook and other materials made on 25 March and 29 April 2021.

Looking ahead to May 2021

5 May – responses to Government consultation on mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs are requested by this date.

28 May – closing date for comments on the FCA’s proposed changes to the Listing Rules for certain special purpose acquisition companies.

31 May – EU Taxonomy Climate Delegated Regulation to be formally adopted by the end of May.

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