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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 Sentiment Survey results

In May, we published the first part of the results of our Small and Mid-cap Sentiment Survey for H1 of 2022, which we produced in conjunction with YouGov. The results included sentiment towards key indicators, such as economic and business outlook, and access to capital.

Please click here to see the results.

We have now released the second part of the results of our Small and Mid-cap Sentiment survey. This takes a deeper dive into Non-Executive Directors, and asks key topical questions around their availability, levels of expertise and remuneration.

Please click here to see the results.

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.

Government response to audit and corporate governance reform consultation

The Government’s response to the Department for Business, Energy and Industrial Strategy (BEIS) consultation, “Restoring trust in audit and corporate governance”, was published on Tuesday 31 May 2022. You can view the Government’s full response to the Audit and Corporate Governance Reform White Paper here.

Please see below for an overview of the key outcomes:

  1. Public Interest Entity (PIE) definition – the definition of a PIE will be widened to include private companies and companies traded on MTFs (such as AIM and AQSE) if these entities have over 750 employees and an annual turnover of over £750 million (as opposed to the €200 million originally proposed).
  2. Director accountability (internal controls) – rather than introducing a requirement in legislation, the UK Corporate Governance Code will be amended to require a directors’ statement about the effectiveness of internal controls (applying to Premium Listed companies).

    1. Dividends and capital maintenance – legislation will require 750:750 PIEs to disclose their distributable reserves and explain the board’s long-term approach to dividends.

  3. New corporate reporting – A statutory Resilience Statement and an Audit and Assurance Policy will be introduced and apply to 750:750 PIEs.
  4. Supervision of corporate reporting – ARGA’s powers will cover the entire annual report and accounts and the regulator will be given the power to commission an expert review.
  5. Company directors – ARGA will have the powers to investigate and sanction breaches of corporate reporting and audit-related responsibilities by PIE directors. Amendments to the UK Code will also occur to increase transparency around bonus clawbacks.
  6. Audit purpose and scope – improvements to auditing standards and guidance will be made by the regulator and legislation will require directors of 750:750 PIEs to report on actions they have taken to prevent and detect fraud.
  7. Audit committee oversight and engagement with shareholders – ARGA will be given the power to set minimum requirements on audit committees in relation to the appointment and oversight of auditors.
  8. Competition, choice and resilience in the audit market – the Government will bring forward the proposals around managed shared audit for FTSE 350 firms and will step up the pace of the operational separation of audit firms.
  9. Supervision of audit quality – ARGA will look at non-legislative ways of improving the AQR process and continuing to seek consent from audit firms and audited entities where possible before publication.
  10. A strengthened regulator – the Audit, Reporting and Governance Authority will replace the FRC. The new regulator will have significantly increased responsibilities and powers.
  11. Additional changes to the regulator’s responsibilities – the Government will take forward multiple proposals regarding the regulator’s responsibilities.

If you would like further information, we have pulled together a detailed overview of the reforms. Please click here to view.

FRC Strategic Report

On 16 June 2022, the FRC published an updated version of its guidance on the strategic report. The guidance has been updated to reflect the Companies Regulation 2022 on climate-related financial disclosures. The Companies Regulations 2022 introduced mandatory climate-related disclosures for certain entities, including public interest entities (PIEs) and AIM-quoted companies with more than 500 employees. The disclosures must be named the non-financial and sustainability information (NFSI) statement.

The main amendments to the guidance include:

  • Stating the change in name of the NFSI statement for financial years beginning on or after 6 April 2022.
  • The addition of a new section (7C) which sets out the climate-related financial disclosures in the NFSI statement applicable to PIEs with more than 500 employees (and certain companies that are not PIEs, such as AIM companies with over 500 employees).
  • Altering the scope of Section 7A and 7B so they address the strategic report content elements for entities that are not PIEs, and PIEs with fewer than 500 employees and PIEs with more than 500 employees.
  • Aligning the definition of a PIE in the guidance glossary to the legislative definition of this term.

To view the updated version of the guidance, please click here.

NS&I Act Annual Report

On 16 June 2022, the Secretary of State for the Department for Business, Energy and Industrial Strategy published the first annual report on the National Security and Investment (NS&I) Act 2021. The report, which was laid before Parliament, describes the operation of the Act for the period between 4 January 2022 (when it first came into effect) and 31 March 2022.

The key findings of the report include:

  • 222 notifications were submitted in the reporting period. The majority (196) of the notifications were mandatory, 25 were voluntary and 1 was a validation application.
  • The average time to confirm acceptance of a mandatory notification was 3 working days (and 4 for voluntary notifications.
  • In total, 8 notifications were rejected during the reporting period, with the average time take to reject a notification being 5 and 12 working days for mandatory and voluntary notifications respectively.
  • Mandatory notifications were received for acquisitions taking place in all 17 in-scope sectors.
  • The sectors where notifications were made most often were defence, military and dual use, critical suppliers to government, artificial intelligence and data infrastructure.
  • Only 17 notified transactions required further review (13 mandatory and 4 voluntary). The sectors that were called in for further review the most were military and dual use, defence, critical suppliers to government, data infrastructure and critical suppliers to emergency services.
  • No final orders were issued, there were no penalties impose and there were no criminal prosecutions pursued.

 Finally, the Government has stated that they intend to publish guidance notes to give companies and their advisers practical advice to help them when dealing with the requirements of the Act.

To view the report, please click here.

Treasury Committee report on future of FS regulation

On 16 June 2022, the House of Commons Treasury Committee published a report on the future of financial services regulation, which included a series of recommendations. The report is the second report relating to the Committee’s inquiry into the future of financial services, which launched in November 2020. The Treasury has been given two months to respond to the report.

The key conclusions and recommendations in the report relate to the following topics:

  • Regulatory objectives and priorities – the FCA should have a secondary objective to promote long-term economic growth, but that HM Treasury should resist calls for growth and competitiveness objectives to become primary objectives.
  • Regulatory independence – the Treasury should respect the principle of regulatory independence and must not pressure the regulators to weaken regulatory standards.
  • FCA performance – the FCA should write to the committee setting out its strategy for closing any gaps in terms of its deteriorating performance.
  • Retained EU law – the Treasury and the regulators should publish a schedule of approximately when they expect each piece of EU financial law will move across to the regulators’ rulebooks, including the timelines for consultation publication.

If you wish to view the full report, please click here.  

HMRC ERS Bulletin

In June, HMRC published a new Employment Related Securities Bulletin (43). The Bulletin announced a review of the mechanism used to calculate Save As You Earn (SAYE) option scheme bonus rates. The review’s purpose is to consider options for simplifying the way in which bonus rates are calculated. While the review is in progress, rates will remain at 0%. HMRC has stated that it intends to provide an update on the review in a further ERS Bulletin later in the year.

In addition, HMRC also published a new SAYE savings prospectus which comes into force on 30 June 2022. The new prospectus removes references to the current mechanism for setting bonus rates. The new prospectus states that the old prospectus (dated 6 April 2022) applies to invitations sent to employees before 30 June 2022, if an application is returned by the employee within 30 days of 30 June 2022.

To view the Bulletin, please click here.

Surveys, projects and questionnaires

This section features surveys or questionnaires submitted by industry bodies or regulators that are relevant to small and mid-size quoted companies.

QCA ESG Directory

The QCA is currently seeking to develop a directory of ESG service providers to help our companies as they progress their ESG-related initiatives and disclosures. The directory will be exclusively for QCA members and will contain information about service providers that could help you and your company. The directory will include a range of providers offering different services, including consultancy, data management, reporting, assurance, verification, research, and others.

We would be very interested in hearing from QCA members who have already utilised service providers and would recommend their services. If this is you, please get in touch with Viola (


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

Policy consultations seeking views:

The QCA is seeking views from members on the following consultations:

  1. FCA: Primary Markets Effectiveness Review (Deadline: 28 July 2022)

The FCA recently published another discussion paper on their Primary Markets Effectiveness Review. The paper provides feedback from the previous consultation on the purpose of the listing regime and a further discussion paper, with questions focussing on the structure of the listing regime and the sponsor regime.

In short, the FCA are seeking views on a proposal for a listing regime based on having a single segment for equity shares in commercial companies. Under this regime, all companies would have to follow one set of mandatory continuing obligations and would be able to choose whether to opt into a second set of supplementary continuing obligations. The decision on whether to follow the supplementary set of obligations would be down to the company following discussion and input from their shareholders.

The FCA also sets out their views on the role and purpose of the sponsor regime, along with a set of questions designed to generate discussion around inefficiencies in the current regime, and whether changes to the existing regime could be made. This could include a potential expansion of the sponsor regime to cover the whole of the proposed single segment.

  1. ISSB: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (Deadline: 29 July 2022)

The International Sustainability Standards Board (ISSB), which was established at COP26, has published a consultation setting out general sustainability-related disclosure requirements. The proposals build upon the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and incorporate industry-based disclosure requirements derived from SASB Standards.

The proposals set out requirements for the disclosure of material information about a company’s sustainability-related risks and opportunities that are necessary for investors. The proposals include requirements and guidance to support the disclosure of material information about significant sustainability-related risks and opportunities.

  1. ISSB: IFRS S2 Climate-related Disclosures (Deadline: 29 July 2022)

The International Sustainability Standards Board (ISSB), which was established at COP26, has published a consultation setting out specifying climate-related disclosure requirements. The proposals build upon the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and incorporate industry-based disclosure requirements derived from SASB Standards.

The proposals from the ISSB set out the specific requirements for the identification, measurement and disclosure of climate-related financial information. The proposals would require a company to provide information in line with the TCFD on governance, strategy, risk management and metrics and targets to enable users to develop a greater understanding of the companies climate-related risks and opportunities.

If you have any comments you wish to contribute to the above consultation(s), please get in touch with Jack Marshall, Senior Policy Adviser,

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