Corporate Matters – February 2021


Reporting financial information – temporary reliefs are still in place
The Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC) have published a joint […]
The Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC) have published a joint statement reminding companies of certain continuing temporary reliefs for reporting published financial information.
The statement encourages stakeholders, particularly listed company boards, to re-familiarise themselves with the measures and use them to ensure the quality of reporting is not compromised during this busy period for preparing, auditing and publishing financial information. It is also intended to alert investors and other users of financial information, including lenders assessing covenant breaches, that reporting timetables for companies might be extended and view those changes in the context of current events.
A summary of the measures currently in place is as follows.
Corporate Reporting for listed companies
An additional 2 months to publish annual financial reports (ie within 6 rather than 4 months of the financial year end date) together with an additional month to publish half yearly financial reports (ie within 4 rather than 3 months of the financial half year end date).
Extended period for filing accounts at Companies House
Currently the deadline for filing any accounts with Companies House is extended by 3 months. While this automatic extension expires on 5 April 2021, it will be replaced with an application process to Companies House, with companies granted a discretionary 3-month extension where they cite coronavirus as a factor impacting the timely completion and/or audit of accounts.
Only one filing extension is permissible for an accounting period and the extension cannot take the filing date later than 12 months after the end of the accounting period.
Delaying or adapting Annual General Meetings
The temporary ability to postpone AGMs provided by the Corporate Insolvency and Governance Act 2020 expired on 30 September 2020. However, measures to provide flexibilities around the conduct of AGMs have been extended to 30 March but there is no scope to extend them beyond that date. The Department for Business, Energy and Industrial Strategy has stated that it is working with stakeholders and will produce further guidance.
Companies are also reminded of the FRC’s guidance for companies on corporate governance and reporting during the pandemic, and it is suggested that audit committees consider disclosing in their annual reports the measures taken to ensure high-quality reporting and audit for the period affected.
Finally, the joint statement also reminds companies of their continuing obligations under the UK Market Abuse Regulation concerning inside information. Companies must continue to assess carefully what information constitutes inside information, recognising that the global pandemic and policy responses to it may alter the nature of information that is material to a business’s prospects.
WM Comment
Companies are now in the busiest period of the year for preparing, auditing and publishing financial information which has coincided with the added restrictions of the national lockdown in the UK. The joint statement recognises the heightened challenges that companies face. If you need help navigating those challenges, please make contact with one of our team.

Reporting deadlines for AIM companies extended
On 27 January 2021 the London Stock Exchange (LSE) confirmed that the temporary measures that […]
On 27 January 2021 the London Stock Exchange (LSE) confirmed that the temporary measures that it announced in 2020 for reporting deadlines in relation to the publication of audited annual results and half-yearly reports remain available for AIM companies until further notice.
Following the original announcement, any company quoted on AIM is able to apply to AIM Regulation for a three-month extension to the reporting deadline for the publication of its annual audited accounts pursuant to AIM Rule 19. The request for the extension must be made by the company’s nominated adviser and submitted prior to the current AIM Rules reporting deadline.
In addition, temporary measures are in place in relation to an AIM company’s obligation to notify half-yearly reports in accordance with the AIM Rules. AIM companies that need extra time to prepare their half-yearly report are given one additional month in which to notify them. A company must notify its intention to use the extra one-month period via an RIS prior to its reporting deadline under AIM Rule 18. The company’s nominated adviser must separately inform AIM Regulation.
The LSE have said that it will keep these relaxations under constant review and will reinstate AIM Rules 18 and 19 at the appropriate time.
WM Comment
In addition to these temporary measures, AIM companies should continue to refer to guidance published by Companies House in respect of the temporary changes to UK filing requirements and any updated regulations published pursuant to the Corporate Insolvency and Governance Act 2020. At the moment the automatic three month extension for filing accounts ends for any filing deadlines that fall on 6 April 2021 or later. Thereafter, an application to extend a filing deadline will need to be made to Companies House.

Changes to the Market Abuse Regulation – AIM companies take note
What market abuse rules apply? Now that the United Kingdom has finally left the EU, […]
What market abuse rules apply?
Now that the United Kingdom has finally left the EU, it is worth taking stock as to how the departure has affected the rules surrounding market abuse and inside information. There are two parallel regimes with which AIM companies must comply in relation to the disclosure of inside information, the Market Abuse Regulation (which originated in the EU) and the AIM Rules.
The Market Abuse Regulation has been retained in UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018, as amended by the Market Abuse (Amendment)(EU Exit) Regulations 2019 and is now known as UK MAR. The original Market Abuse Regulation is now called EU MAR in UK legislation. UK MAR applies to all issuers with securities listed or traded on a UK market such as the London Stock Exchange’s Main Market, AIM and AQSE or which have applied for admission. EU MAR continues to apply where securities are listed or traded on a market in an EEA Member State. Companies which have listings on a European market as well as AIM, for example, will have to comply with both UK MAR and EU MAR.
The start of the 2021 has also seen some notable changes to the rules surrounding inside information. These changes were made to EU MAR by the SME Growth Market Regulation. Some have been adopted by UK MAR automatically and some are being introduced via the Financial Services Bill which is currently going through Parliament. Therefore companies trading on AIM (or the AQSE Growth Market) should be aware of the following modifications.
Insider Lists
Under the original market abuse regulation, companies were responsible both for drawing up their own insider list but also for ensuring that each of its advisers kept their own insider list as well. It was felt that this was confusing and so now under EU MAR and UK MAR once the Financial Services Bill has been enacted, it is an express obligation on any person acting for an issuer to keep their own insider list. In addition, a company can request another person to draw up the insider list for it but the company remains responsible for and must have a right of access to that list.
A second change that has been made is that a SME growth market issuer (therefore companies trading on AIM or AQSE) only need to keep a permanent insider list, rather than having to draw up a transaction insider list for every transaction. The permanent insider list should only list those who have access at all times to inside information.
PDMR Disclosures
The original market abuse regulation introduced provisions relating to share dealings by “persons discharging managerial responsibilities” or PDMRs. The concept of the PDMR covers directors and senior executives with regular access to inside information relating directly or indirectly to the company and with power to take managerial decisions affecting the future developments and business prospects of the company. The obligations regarding share dealings also extend beyond PDMRs to their “persons closely associated” or PCAs. PDMRs and their PCAs are required to notify the company and the Financial Conduct Authority (FCA) within three business days after the date of any notifiable transaction. That remains the case under UK MAR.
Prior to 1 January 2021, the company also had to make a regulatory announcement of the transaction within those same three business days. However under EU MAR this rule has been amended and now the issuer’s announcement must be made within two days after it has been informed of the transaction by the PDMR (or their PCA). This change will be introduced into UK MAR via the Financial Services Bill once passed. The only slight difference is that UK MAR will specify “working” days, which excludes Saturdays, Sundays, Christmas Day, Good Friday and bank holidays in England and Wales, for both PDMRs and issuers, whereas EU MAR continues to specify “business” days, although this difference is unlikely to have any meaningful impact.
Delayed Disclosure
Under the market abuse rules, an issuer is permitted to delay disclosure of inside information if three stringent conditions are satisfied. From 1 January 2021, AIM companies (and also issuers on the AQSE Growth Market) do not have to keep a written record of their reasoning as to why they have delayed the disclosure of inside information. The only caveat to this is that the issuer needs to be able to justify the decision to delay if requested by the FCA. Since it may be difficult to put together such a justification without a written record, we would recommend that companies continue to keep a written record of the reasons behind any delay even though not strictly necessary.
WM Comment
Now that the Market Abuse Regulation has been on-shored, it is likely that subtle changes such as those highlighted above will continue to be announced so it is important that companies quoted on AIM keep up to date with the changes.

Delays in strike off processes
Companies House has announced that it has temporarily paused its voluntary and compulsory strike off […]
Companies House has announced that it has temporarily paused its voluntary and compulsory strike off processes for one month, from 21 January until 21 February 2021. Reduced staff in its offices due to Covid-19 has been cited as the reason.
For voluntary strike off applications, Companies House will continue to publish first Gazette notices but will not publish the second Gazette notice or strike companies off during the period.
For compulsory strike off applications, it will not publish first or second Gazette notices.
Any companies that are part way through the process will obviously be subject to the delay.
WM Comment
We have spoken to Companies House and it has been confirmed that strike off applications are still being accepted but the process will be subject to the one month delay.