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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 June, a significant amount of regulatory and legislative attention has continued to be placed on the impact of the Coronavirus (COVID-19) pandemic. The first section of this month’s Directors’ Knowhow includes the relevant policy and market developments and updates relevant to the Coronavirus pandemic.

HMRC ERS Bulletin


On 8 June 2020, HMRC published their 35th edition of the Employment Related Securities Bulletin (ERS bulletin). The ERS bulletin provides information and updates regarding employment related securities, including tax-advantaged employee share schemes.

This ERS bulletin outlines how the coronavirus has had an impact on tax-advantaged employee share schemes. The Bulletin covers the following share schemes:

  • Save as you Earn (SAYE) – HMRC have extended the payment holiday terms for participants who are unable to contribute because they’re furloughed or on unpaid leave. SAYE contributions can continue to be deducted from the Coronavirus Job Retention Scheme.
  • Enterprise Management Incentive (EMI) – HMRC is still exploring the issues raised in relation to EMI. The QCA have been in discussion with HMRC to raise our members’ concerns.
  • Share Incentive Plan (SIP) – CJRS payments can constitute a salary for furloughed employees. SIP participants can stop deductions from their salary.
  • Company Share Option Plans (CSOP) – options will remain qualifying for full-time directors and qualifying employees who have been furloughed.

Also included within the Bulletin is information on valuations; deadlines for registration of new schemes and filing returns; and HMRC’s new contact details, including contact address for share schemes enquiries and changes to HMRC’s email address.

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

Inside AIM article

On 9 June 2020, the London Stock Exchange published an Inside AIM article which set out the temporary changes to an AIM company’s obligation to notify half-yearly reports in accordance with the AIM Rules.

The Inside AIM article of 26 March 2020 set out the intention to continually review the requirements relating to half-yearly reports pursuant to AIM Rule 18. Previously, an AIM company, under the AIM rules, must notify its half-yearly report without delay and in any event within three months from the period to which it relates.

However, from 9 June, AIM companies that need extra time to prepare their half-yearly report will be given a one-month extension in which to issue them. A company must notify its intention to use the extra one-month period and its nominated adviser must also inform AIM Regulation.

This is a temporary measure and will be kept under review, with the intention to announce an orderly transition to standard reporting periods when the disruption to AIM companies eases.

To view the article, please click here.

FRC update Q&A on AGMs

On 8 June 2020, the FRC and BEIS released an updated version of their Q&As on company filings, AGMs and other general meetings during Covid-19. The Q&A’s have been updated to include the guidance issued following the publication of the Corporate Insolvency and Governance Bill 2020. This includes temporary suspensions of certain statutory and constitutional requirements relating to AGMs. The Q&As seek to help companies who are either experiencing financial difficulties or to assist them in managing the impacts of the ongoing pandemic.

The guidance outlines considerations for when a meeting cannot be held, as well as the possibility of holding a meeting with a representative cross-section of members and the need to consider how to ensure active participation by virtual means.

In addition, the guidance also sets out certain good practice measures organisations can use to communicate with their stakeholders, this includes:

  • Providing clarity on proxy voting;
  • Issuing timely communications to members so that there is enough time to consider matters ahead of voting;
  • Outlining procedures for meetings;
  • Giving members the platform to ask questions and receive responses; and
  • Offering a physical meeting to all members one social-distancing restrictions have been removed.

If you wish to read the updated guidance, please click here.

FRC Lab report on going concern, risk and viability

The FRC’s Financial Reporting Lab has published a report on disclosures on going concern, risk and viability during the coronavirus pandemic. The report outlines the relevant regulatory requirements, sets out certain key considerations for companies, includes key questions that boards should be asking themselves and provides examples of disclosures made by companies.

The key points contained within the report include:

  • Going concern – investors recognise that the level of uncertainty is significant and, to a large extent, out of the company’s control and expect them to report many areas of uncertainty and estimations. 
  • Risk – the best risk disclosures should consider the issues raised by the pandemic with reference to its impact on the company relevant to its specific circumstances.
  • Viability – a viability statement with realistic scenarios and clear assumptions will allow a company to appropriately communicate their longer-term prospects, despite their being uncertainty in the short-term.

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

FRC report on resources, action, the future

On 15 June, the FRC’s Financial Reporting Lab published a report providing practical advice for companies which sets out the types of disclosure investors are expecting to see during this period. In addition to highlighting the types of information that could be included in disclosures, the report includes examples made by companies, detailing their usefulness.

The key areas within the report include:

  • Resources – this section relates to how much cash the company has, the level of debt the company is holding and the cash and liquidity the company can obtain. This information is useful for investors in helping them to understand more about the availability of cash.
  • Actions – this section relates to the management of expenditure and cash outflow in the short-term, as well as how the company can ensure viability.
  • The future – this sections relates to how decisions made during the current crisis will ensure the sustainability of the company and impact the company’s stakeholders. Investors would like to see how the company is protecting its key assets and value drivers.

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

FCA Market Watch 63


In May, the FCA released the 63rd edition of their Market Watch newsletter. The newsletter sets out the FCA’s expectations of market conduct in the context of the coronavirus regarding increased capital raising and alternative working arrangements. The FCA stress the importance of maintaining and ensuring that the right controls around market abuse, conduct and conflicts of interests are in place. In doing so, the FCA encourages a particular focus on:

  • ensuring inside information continues to be appropriately identified and handled by all persons involved in the information chain so that it is not misused for insider dealing or for commercial advantage;
  • ensuring inside information is appropriately disclosed by issuers so that investors are not misled;
  • maintaining robust market surveillance and suspicious transaction and order reporting (STORs) by relevant market participants, in the context of changes in market conditions and the current use of alternative working arrangements;
  • maintaining robust market surveillance and suspicious transaction and order reporting (STORs) by relevant market participants, in the context of changes in market conditions and the current use of alternative working arrangements; and
  • identifying and managing conflicts of interest by market participants that may arise around capital raising events.

To view the Market Watch, please click 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 Annual Forum 


On 16 June 2020, the the QCA held its annual forum, with the event taking place for the first time in an online format. This year’s forum, Liquidity is Gold, delved into the age-old debate around how liquidity can be improved in smaller company stocks, as well as how companies can improve their investor engagement practices.


Speakers included:

  • James Ashton (Chair), Business Journalist
  • Matt Butlin (keynote speaker), Head of Equities, Allenby Capital
  • Adam McConkey, Chairman, QCA & Portfolio Manager, Lombard Odier
  • Karis Alpcan, Head of Primary Markets and Competitiveness, HM Treasury
  • Nike Trost, Senior Manager – Markets Policy, FCA
  • Marcus Stuttard, Head of UK Markets and AIM, LSE

To read the highlights of the session, please click here.

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.

Written Statement from the Chancellor: SDR not to be implemented


On 23 June 2020, Rishi Sunak, Chancellor of the Exchequer, issued a Written Ministerial Statement on the UK’s approach to implementing financial services regulatory reforms before the end of the Brexit transition period.

As part of a package of measures contained within the written statement, it was announced that the UK will not be implementing the EU’s new Settlement Discipline Regime (SDR), as set out in the Central Securities Depositories Regulation (CSDR), which was due to be applied in February 2021.

To view our article on the announcement, please click here.

To view our press release on the announcement, please click here.

LSE AIM at 25

This month marks the 25th anniversary of the Alternative Investment Market. In the 25 years since its inception, AIM has become one of the most successful growth markets in the world and has supported thousands of companies through changing business and economic cycles.


To mark the occasion, the London Stock Exchange has released a report celebrating the successes of AIM. Since its establishment in 1995, AIM has support over 3,800 companies from 79 countries across the globe. In total, these companies have raised £45.4 billion at admission and raised £72.4 billion in follow-on funding since 1995. The significance of this to the UK economy is enormous. The ability of AIM companies to raise long-term patient capital has enabled growth and created employment across the country.


To read the report, please click here.

Economic impact of AIM

In addition to the London Stock Exchange report above, Grant Thornton have also released a report to mark the 25th anniversary of AIM. The report focusses on the economic impact of AIM, focussing on its contribution to UK PLC, supporting growth, creating employment, fostering innovation and driving productivity.


The key findings include:

  • In 2019, AIM companies contributed £33.5 billion Gross Value Added (GVA) to UK GDP and supported more than 430,000 jobs.
  • Adding in wider economic activity through supply chains and the expenditure of employees increases the economic contribution to £67.2 billion in GVA and over 900,000 jobs.
  • Over the last five years, the direct economic contribution made by AIM companies has grown by 35%.

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

Hardman & Co. report on investing during a pandemic


Research provider Hardman & Co. recently published a report on the likely changes to come about post-Covid-19. The report discusses the wider macro picture, including financial repression and capital controls, the ripple effects and inflation and why interest rates will remain low for some time. In addition to this, the report also discusses the implications for companies and equity investors. This includes looking into the likely desire for stronger balance sheets, the need to onshore elements of the supply chain and the implications for equity valuation, working capital and income funds.


If you wish to read the report, please click here.

ICAEW guidance for preparers


The ICAEW has recently published draft guidance to help preparers in producing prospective financial information. The guidance includes some core principles and general application guidance that can be applied in all situation where a business is preparing forward looking financial information.


Also included in the guidance are application notes on:

  • Statements of sufficiency of working capital in capital markets transactions;
  • Profit forecasts in capital markets transactions and other profit guidance; and
  • Synergy and stand-alone cost-saving statements in capital markets transactions.

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

Articles, news and speeches


This section features relevant news, articles and publications for small and mid-size quoted companies that has been published in the last month.

FCA Insight Article on conduct and culture


On 10 June 2020, the FCA published an Insight Article on conduct and culture in the context of the current coronavirus pandemic. the article explores some of the ways in which individual behaviour and workplace culture may have been affected by the changes to the way we work following the pandemic and what this might mean for financial services firms.


In particular, the article covers how the pandemic has affected:

  • Individual behaviour;
  • Corporate culture and accepted norms and behaviours;
  • The management of people; and
  • Approaches to tackling immediate operational and financial issues.

If you wish to read the article, 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


On 11 June, the QCA’s Accounting, Auditing and Financial Reporting Expert Group and Corporate Governance Expert Group contributed to the response to the European Commission consultation on the revisions to the Non-Financial Reporting Directive.


To view the response, please click here.


On 11 June, the QCA responded to the BEIS Reforming Regulation Initiative consultation.


To view the response, please click here.


On 15 June, the QCA’s Primary Markets Expert Group and Secondary Markets Expert Group contribute to the response to the AQSE Market Consultation paper.


To view the response, please click here.


The QCA is 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,


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