Capital Markets Update – November 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.

October’s news

ESMA publishes Prospectus Regulation guidelines

On 1 October 2019, the European Securities and Markets Authority (ESMA) published its Guidelines on risk factors under the Prospectus Regulation. The guidelines will apply from 1 December 2019.

FCA publishes Primary Market Bulletin 24

On 3 October 2019, the Financial Conduct Authority (FCA) published Primary Market Bulletin 24 which includes, amongst other things, an update on the FCA’s Brexit preparations, a brief overview of the FCA’s proposals regarding the European single electronic format requirements and updates on the Prospectus Regulation.

ESMA consults on MAR review

On 3 October 2019, ESMA issued a Press Release stating that it had launched a consultation on the Market Abuse Regulation (MAR) following a request from the European Commission for technical advice.

ISS publishes 2020 benchmark policy consultation

On 7 October 2019, Institutional Shareholder Services (ISS) published its 2020 benchmark policy consultation seeking views on its proposed voting policies for 2020.

Takeover Panel Hearings Committee imposes cold shouldering

On 11 October 2019, the Takeover Panel Hearings Committee published Panel Statement 2019/16 imposing the cold-shouldering of David King for a period of four years from 2 October 2019 for various contraventions of the Takeover Code, including breach of the obligation to make a mandatory offer under Rule 9 of the Code.

LSE launches green economy mark and sustainable bond market

On 11 October 2019, the London Stock Exchange (LSE) announced the launch of two initiatives supporting sustainable finance on its markets. The Green Economy Mark recognises listed companies with 50% or more of revenues from environmental solutions and the Sustainable Bond Market incorporates new Sustainability, Social and Issuer-Level Segments.

FCA action on climate change and green finance

On 16 October 2019, the FCA published a Feedback Statement (FS19/6) setting out, amongst other things, its proposals to improve climate change disclosures by issuers. The feedback statement summarises the responses the FCA received from stakeholders to its discussion paper DP18/8 and sets out the FCA’s actions and next steps.

EU launches Sustainable Finance platform

On 18 October 2019, the European Commission announced that it had launched the International Platform on Sustainable Finance (IPSF), the main aim of which is to drive private capital towards environmentally sustainable investments.

Corporate reporting on climate change information

On 22 October 2019, the Financial Reporting Council’s Financial Reporting Lab published a Report providing practical guidance for companies on how they can improve their reporting of climate change information in order to meet investors’ expectations.

ESMA publishes enforcement priorities

On 22 October 2019, ESMA published its annual Public Statement on European common enforcement priorities for 2019 annual financial reports.

FRC publishes revised UK Stewardship Code

On 24 October 2019, the Financial Reporting Council (FRC) issued a Press Release stating that it had published its revised Stewardship Code. The UK Stewardship Code 2020 will take effect on 1 January 2020 and will replace the UK Stewardship Code 2012.

LSE publishes AIM Notice 57

On 29 October 2019, the LSE published AIM Notice 57 which updates AIM Notice 55 regarding the proposed changes to the AIM Rules for Companies and AIM Rules for Nomads in the event of a no-deal Brexit on 31 January 2020.

FRC publishes annual review

On 30 October 2019, the FRC issued a press release announcing it had published its Annual Review of Corporate Governance and Reporting 2017/18 together with an Open Letter to Audit Committee Chairs and Finance Directors calling for improvements in key areas of corporate reporting which reflect the findings of the Annual Review.

ESMA publishes report on EEA prospectus activity

On 31 October 2019, ESMA issued a Press Release announcing that it had published its annual report on prospectus activity in the European Economic Area (EEA) in 2018. The report covers general approval activity, structure and content of approved prospectuses and passporting activity in the EEA.

Looking ahead to November 2019

1 November 2019 – Closing date for parts of the FCA Quarterly Consultation Paper 25 (CP19/27) including those in relation to changes to domestic legislation.

5 November 2019 – Closing date for Law Commission Call for Evidence on the intermediated securities system.

13 November 2019 – Hampton-Alexander Report 2019 due to be published.

22 November 2019 – Closing date for ICGN consultation on Global Stewardship Principles.

29 November 2019 – Closing date for ESMA consultation on the MAR review.