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Directors' Knowhow is a monthly article which highlights changes and updates of relevance to small and mid-size quoted companies.

Coronavirus-related updates


Throughout April, the Coronavirus (COVID-19) pandemic has again dominated regulatory and market developments as a result of its continuing and significant impact. The first section of this month’s Directors’ Knowhow includes the relevant policy and market developments and updates relevant to the Coronavirus pandemic and seeks to provide a breakdown of the key information you need to know.

Business support available


In light of the Coronavirus pandemic, there are various business and other financial support mechanisms that may be available to your company.

The Future Fund


On Monday 20 April, HM Treasury and the Department for Business, Energy and Industrial Strategy (BEIS) announced the coronavirus Future Fund. 

The Future Fund, which will be delivered in partnership with the British Business Bank, has been established to ensure that the UK’s startup sector, including high growth companies, remains viable during the current crisis. The fund will give Government loans to UK-based companies ranging from £125,000 to £5 million.

Whilst the full eligibility criteria has not yet been published, the Future Fund headline terms can be found here.

The headline terms state that a business must be an “unlisted UK registered company”. At present, it is unclear whether “unlisted” will include companies with their shares issued on AIM or the Aquis Exchange. The QCA is currently in communication with the Treasury and BEIS to determine if these companies will be eligible for the fund.

Government update CBILS


On 3 April 2020, the Government announced changes to the Coronavirus Business Interruption Loan Scheme (CBILS). Under the CBILS, SMEs can obtain Government loads of up to £5 million to help them deal with the impact of the Coronavirus (Covid-19) pandemic. At the time of updating the scheme, the Government stated that it had made over £90 million worth of loans to nearly 1,000 smaller companies since its launch on 23 March 2020.


However, amidst continued pressure from businesses, the Government have issued several changes, which came into effect on Monday 6 April 2020, including:

  • Lenders will no longer be permitted to refuse applications for a CBILS on the basis that the applicant is eligible for regular commercial financing. Companies who have previously been refused CBILS loans can reapply.
  • Lenders will no longer be able to request personal guarantees for loans under £250,000.
  • Additional operational changes have been made to speed up the lending approval process.

For more information on the CBILS and the changes the Government has made, please click here.

Relevant guidance


In response to the outbreak of the coronavirus, several organisations have issued guidance to help companies and individuals navigate the pandemic.



On 17 April 2020, the FRC in conjunction with BEIS published a Q&A document to provide companies with information to help assist with their reporting and filing activities over the coming months. This includes measures in respect of company filings, AGMs and other general meetings during the current coronavirus outbreak. The intention is to alleviate difficulties in meeting statutory obligations to shareholder meetings and file documentation with Companies House.


In the Q&A, the following guidance is provided:

  • The form that the planned flexibility on AGMs and other general meetings will take.
  • Whether the deadline for holding AGMs will be extended. 
  • Safeguarding shareholder engagement in closed meetings.
  • Dealing with shareholder requests for hard copies of AGM notices or other documentation.

If you wish to view the Q&A, please do so here.

ESMA guidance on APMs


On 17 April ESMA issued a new Q&A on Alternative Performance Measures during the current coronavirus pandemic. The Q&A provides guidance to issuers on the application of the ESMA guidelines on Alternative Performance Measures (APM).


The APM Guidelines address the information that issuers should publish when issuing APMs, such as operating results, EBIT, EBITDA and free cash-flows, to the market in reports and other disclosures. The Q&A:

  • Highlights the main principles of the APM Guidelines;
  • Encourages issuers to use caution when adjusting APMs and when including APMs to address the impact of Covid-19; and
  • Invites issuers to provide:
    • Information regarding the modifications made and the assumptions used; and
    • Information on measures taken or expected to be taken by issuers to address the impact that Covid-19 may have on their operations and performance.

If you wish to view the Q&A, you may do so here.

Regulatory developments


As a result of the current circumstances, many regulatory developments have occurred in order to mitigate against the impact of the pandemic whilst ensuring regulatory standards are upheld.

FCA Statement of Policy


On 8 April 2020, the FCA issued a statement announcing a series of measures aimed at assisting companies to raise new share capital in response to the Coronavirus (COVID-19) pandemic. Details of the statement can be found on the FCA’s website.

The package includes a combination of temporary policy interventions that seek to provide certainty for companies and their advisers of the FCA’s expectations during the crisis. It aims to do so in a way that should facilitate new capital being raised in an efficient manner, whilst continuing to ensure that shareholders are properly informed.

The key new measures relate to:

  • Working capital statements:
  • General meeting requirements under the Listing Rules:
    • In order to alleviate some of the challenges faced by companies, the FCA is modifying their Listing Rules so that where a General Meeting is required for Class 1 transactions and Related Party transactions, the company can apply to the FCA for a dispensation from the need to hold the General Meeting.

The FCA also reminded companies to utilise:

  • Shorter form prospectuses:
    • The FCA is encouraging companies issuing new equity to recapitalise to use the new simplified disclosure regime, which is set out in the new Prospectus Regulation that was introduced in 2019. This regime is available to all companies that have been admitted to trading on a regulated market or SME Growth Market for at least 18 months.

If you wish to read the Statement of Policy, please click here.

FCA statement on SM&CR


On 3 April 2020, the FCA set out their expectations for solo-regulated firms in respect of the Senior Managers and Certification Regime (SM&CR) during the coronavirus pandemic. The FCA recognises that firms directly affected by the coronavirus will need to keep their governance arrangements under review and make appropriate changes as circumstances change. Firms are not expected to have a single Senior Manager responsible for their coronavirus response.


Senior managers are responsible for risks in their areas of responsibility and should be considering:

  • Where the current situation might lead to emerging risks; and
  • How it affects existing risks.

The FCA recognises that some firms will need to make temporary arrangements to cover absences or change Senior Management responsibilities in response to the pandemic. As such, the FCA do not intend to enforce the requirement on firms to submit updated Statements of Responsibilities, if the change:

  • Is made to cover multiple sicknesses; and
  • Is temporary and expected to revert back to a firm’s previous arrangements.

Further details can be found on the FCA’s webpage here.

FCA webpage on wet signatures


On 20 April 2020, the FCA set out its expectation of firms when dealing with the need for ‘wet-ink’ signatures (signing a document by hand).


In relation to agreements, the FCA state that their rules do not explicitly require wet-ink signatures in agreements and do not prevent firms from using electronic signatures in agreements. However, the FCA urges firms to consider the legal position themselves as the validity of electronic signatures is a matter of law.


On forms, the FCA state that they will accept electronic signatures for fund-related applications and on all applications from mutual societies. Firms may use electronic signatures for all interactions with the FCA.


Further information can be found on the FCA’s webpage here.

FRC update guidance on modified audit


Further to the guidance issued on 16 March 2020, the FRC has today (21 April 2020) published further guidance on modified auditors’ opinions and reports during the Coronavirus (Covid-19) pandemic. The announcement from the FRC summarises the types of modified audit opinions that can be issued under the International Standards on Auditing (ISA’s) (UK).

As a result of current circumstances, auditors may be required to consider modifying their audit opinion. This may arise due to certain restrictions in place that have meant that audit procedures, such as site visits and physical inventory testing, cannot be performed, which means that the required volume and quality of reliable audit evidence cannot be obtained. Furthermore, management’s judgements in certain areas, such as cashflow estimates underpinning the use of the going concern basis of accounting, may be difficult to support in light of the current pandemic.

The publication of this guidance has important implications for both auditors and companies. In particular, it is a useful document for helping companies understand the nature of modified audit reports, such as when and why an auditor will seek to modify or amend their opinion. Having this knowledge will then allow companies to engage with their auditors and have useful discussions around the reasoning for the modification.

The flowchart provided at the end of the document, will help companies prepare for discussions with their auditors.

Market developments


As a result of the ongoing coronavirus pandemic, the market is adapting and many developments have taken place to continue to ensure the orderly functioning of the market.

Pre-Emption Group Statement


Early in April, the Pre-Emption Group – which issues best practice documents regarding authorities to disapply pre-emption rights – issued a statement on expectations for issuances in the current circumstances. Within the statement is a recommendation that investors consider, on a case-by-case basis, supporting issuances by companies of up to 20% of their issued share capital on a temporary basis, rather than the 5% for general corporate purposes with an additional 5% for specified acquisitions or investments. The recommendation for investors to apply additional flexibility, will be in place on a temporary basis until 30th September 2020.


The Pre-Emption Group’s Statement of Principles apply to all companies with a Premium Listing on the Main Market. They do not strictly apply to companies on AIM, or those companies with a Standard Listing, however these companies are encouraged to adopt the principles.


If you wish to read the statement, you may do so here.

ISS policy guidance


On 8 April, Institutional Shareholder Services (ISS) published guidance on the application of its policies in light of the Coronavirus outbreak. ISS will continue to update its guidance and provide further information when needed throughout the remainder of the 2020 proxy season.


The main issues covered in the guidance include:

  • AGM postponements;
  • Virtual-only meetings;
  • Director attendance;
  • Changes to the board and/or senior management;
  • Share repurchases;
  • Compensation issues; and
  • Share issuances.

If you wish to view the guidance, you may do so here.

QCA publications and policy updates

This section of the Directors’ Knowhow features all of the publications produced by the QCA and any relevant updates that have occurred over the last month.

QCA ‘Lockdown Lowdown’


The QCA has launched a new hub on our website for COVID-19-related content to help QCA members. The 'Lockdown Lowdown' includes information on regulatory updates from the FCA, FRC and others; Government support schemes available for companies; and the work the QCA is doing on your behalf. In addition to this, you can find content we have brought together from our member advisory firms to help small and mid-size quoted companies.


We are also using the hub to bring together content from our member advisory firms to help small and mid-size quoted companies. Examples of topics we hope to cover include corporate governance and financial reporting, contracts and supply chain management, people and work force, tax and accessing finance. 

Reports, guides and regulation


This section features some of the key legislative/regulatory developments and changes, as well as any new reports or guidance issued by industry bodies or regulators, over the last month.

FCA Business Plan 2020-21


In April, the FCA published their Business Plan for 2020/21, which sets out the FCA’s main areas of focus and outlines their priorities and their response to the problems they have identified. The Business Plan outlines the FCA’s 5 key priorities over the next 1-3 years, which include:

  • Transforming how the FCA works and regulates
  • Enabling effective consumer investment decisions
  • Ensuring consumer credit markets work well
  • Making payments safe and accessible
  • Delivering fair value in a digital age.

The plan also states that, as a result of the current crisis, the FCA has delayed some of its planned activities where it may have deterred from it's more immediate priorities.


To view the Business Plan, please click here.


This section provides an update of any recently submitted QCA consultation responses, as well as the consultation responses the QCA is currently drafting.

QCA policy consultation responses


In light of the Coronavirus pandemic, many organisations have extended the deadlines of their consultations. As such, the QCA is still seeking views on the below consultations:

If you have any comments you wish to contribute on either of these consultations, please get in touch with Jack Marshall, Policy Adviser,


This section provides information on any upcoming events the QCA may be holding or relevant events that members may be interested in.

Cybercrime Webinar


On Thursday 7 May, the QCA, in partnership with Crowe UK LLP, is holding a webinar on cybercrime. The webinar will be used to discuss the cybercrime risks facing listed businesses and the preventative measures that can be put in place.


The webinar will:

  • Cover the common types of cyber-attacks;
  • Identify areas of vulnerability; and
  • Look at how you can prevent and manage risk.

For more details, including on how to register for the event, please click here.

Debt Finance Webinar


On Monday 27 April, the QCA and Grant Thornton UK LLP are holding a webinar which will cover the different types of Government funding schemes which have been established as a result of the current pandemic. The webinar will discuss the different schemes available and their subsequent updates, as well as provide you with insights from banks, funds and alternative lenders. In addition, the webinar will cover the best practical steps on how to approach acquiring funding and support.


For more details, including on how to register for the event, please click here.



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