'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.
Reduced share settlement period (T+2) comes into effect on 6 October
A reduced share settlement period is coming into effect in the UK on Monday 6 October 2014 and companies are being told to try to avoid corporate actions on that day, whilst Euroclear switches the system over. The reduced period is referred to as T+2 (Trade + 2 days) and is being introduced as a requirement of the EU's Central Securities Depository Regulation. Companies should speak to their registrars, brokers, and/or NOMADs, if they believe that a corporate action happening around that time may be affected.
Financial Reporting Lab publishes accounting policies project report
The Financial Reporting Lab has published its project report on accounting policies and the integration of related financial information. The report looks at companies' recent experimentation with the presentation, position and content of accounting policy disclosures and considers the views of both companies and investors.
IMA publishes new share capital management and transactions guidelines
The Investment Management Association (IMA) recently published new share capital management guidelines, which sets out the expectations of IMA members as institutional investors on various aspects of share capital management. It applies to premium listed companies on the Main Market, but standard listed companies and AIM companies are encouraged to follow them too.
The Association of British Insurers (which is now part of the IMA) has also published transaction guidelines, which sets out the views of institutional investors on equity capital market transactions.
FCA consults on the abolition of interim management statements
The Financial Conduct Authority (FCA) is currently consulting on the removal of the requirement for listed companies to publish quarterly reports (also known as interim management statements in the UK). This is a result of the EU's recent revision of the Transparency Directive and the UK Government is keen to bring this change in ahead of its deadline for implementing the revised Directive into UK law. The FCA proposes to:
- delete DTR 4.3 completely;
- remove some rules that will be obsolete; and
- make amendments to other aspects of the Disclosure and Transparency Rules that refer to interim management statements.
The consultation is open until 4 September 2014.