'Director know how' is a monthly article which highlights key rule changes, proposed changes and market updates so that you know what is coming down the track.
LSE announces new High Growth Segment
On 13 February 2013, the London Stock Exchange announced its new High Growth Segment, which aims to create a new market segment on the Main List for fast growing companies that want a stepping stone to the premium listing option. Under the new rules proposed in its draft rulebook, companies will be eligible for admission to the High Growth Segment if they meet the criteria including:
- Historic revenue CAGR of 20 per cent or more over a three year period
- An EEA incorporated, active commercial company
- A minimum free float of 10 per cent
- Publication of an approved prospectus
The creation of the segment seems to be a response to concerns that tech companies have been increasingly looking at listing at overseas exchanges, in particular Nasdaq in the US. The draft rulebook is under consultation until 8 March 2013.
Funding for lending toolkit for businesses
Formally launched on 1 August 2012 the Bank of England’s Funding for Lending Scheme is designed to boost their lending by reducing bank funding costs. This allows banks to reduce the price of new loans and increase their net lending. The British Bankers Association (BBA) has published a toolkit for businesses, which lists those banks participating in the Funding for Lending Scheme and the range of services and products they have tailored to businesses.
2013 Budget date announced
The Chancellor will give his Budget announcements on 20 March 2013. The 2013 Finance Bill will be published 28 March 2013.
PIRC to oppose the introduction of new long-term incentive schemes
Proxy voting advisors PIRC has published its 2013 voting guidelines, which introduces a tougher approach to remuneration. The key change is that PIRC will oppose the introduction of new long-term incentive schemes, as it believes that these schemes are fundamentally flawed and do not encourage long-term behaviour. PIRC has also said it will not support the approval of the report and accounts, re-election of relevant committee members and, in some circumstances, the auditor where:
- The auditor is also the advisor to the remuneration committee.
- There is a likely liability, or likely contingent liability, for any element of deferred pay that has not been provided for in the accounts for the year in which it is an appropriation of profits.
- It is clear that the company's adherence to IFRS has led to a failure of the accounts to provide a true and fair view.