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


Throughout March, the government, regulators and other bodies have produced information for companies and other stakeholders on Brexit. These publications have provided information on how firms can prepare for Brexit, highlighted the changes that would come about as a result of a ‘no-deal’ Brexit, and supplied information on how firms can continue to provide services to EEA countries after the UK withdraws from the EU.


FCA issues advice on how firms can prepare for Brexit


The FCA have released information on how firms can prepare for Brexit. The information is intended to help regulated firms understand the changes that will affect their company and any actions that they may need to take. It includes considerations for UK firms, as well as considerations for EEA firms conducting business in the UK.


Certain UK-based firms that only do business in the UK may not be affected at all, however, any firms which operate between the UK and the EEA – whether through a passport or under EU legislation – will be affected.


More details can be found here.


London Stock Exchange issue AIM Notice 55

On 7 March 2019, London Stock Exchange issued AIM Notice 55. Within the notice, the Exchange published its proposed changes to its rulebooks that will apply in the event that no transitional or other agreement is reached before the UK withdraws from the EU.  The rulebooks include the AIM Rules for both companies and nominated advisers.


More details can be found here.


FCA Primary Market Bulletin: no-deal Brexit changes 

The FCA has published its Primary Market Bulletin summarising the key changes to the Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules that will apply if the UK leaves the EU without a deal. The majority of the new rules are the same as the existing requirements issuers are subject to in the UK, but there are some changes that issuers will need to take into consideration.


The key changes are as follows:

  • Transparency rules will apply to all issuers admitted to trading in the UK irrespective of their place of incorporation
  • Amendments to audited financial statements requiring issuers to prepare consolidated accounts using UK-adopted IFRS as opposed to IFRS as adopted by the EU 
  • Issuers will only be able to use a Primary Information Provider (PIP) to circulate regulated information
  • Amendments to free float requirements, which mean holders form any jurisdiction will be counted towards the free float and not just limited to EEA holders
  • Changes to the prospectus directive which removes reciprocity of recognition by the UK of EEA state-approved prospectuses. Prospectuses passported into the UK before 29 March 2019 will remain valid in the UK until their validity expires.


Providing services after EU exit

The Government has produced guidance for UK businesses to navigate third country regulations in EEA states in the event of a ‘no-deal’ Brexit scenario. If the UK leaves the EU on 12 April 2019, the UK will cease to operate under the European Economic Area (EEA) regulations for cross-border trade in services. As a result, UK firms may be required to overcome additional legal, regulatory and administrative barriers, should they wish to continue their cross border trade in services. The Government has produced country guides in order to help a UK company continue to provide services in the EEA. The guides outline the national regulations a company will need to abide by in order to continue trading its services.


Guidance for UK companies has been published for the following countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and Switzerland.


More information, as well as a link to each country, can be found here.


FCA Brexit and Beyond speech 

On 21 March 2019, Nausicaa Delfas, Executive Director of International at the FCA, delivered a speech at City and Financial, 4th UK Financial Services Brexit Summary in London. The speech covers the FCA's preparations for Brexit, expectations of firms, and implications for consumers; residual risks of Brexit and; the FCA's future relationships on the global stage.


Within the speech, Delfas holds that, despite the considerable uncertainty caused by Brexit, the FCA's extensive preparations for all scenarios, including the possibility of a hard exit, and the FCA's strong foundations for the future will endure. 


See the rest of the speech here.

FCA publish policy statement on the Directory 

Early in March, the FCA published a policy statement on details of its new public register, or Directory. The Directory is a public register that will enable all stakeholders, including consumers and firms, to find information on individuals working within the financial services sector. The final rules set out today in the press release require firms to report information in a timely and accurate manner about their Directory. This will empower customers to ensure that they communicate with individuals whom an authorised firm has assessed as fit and proper and enable firms to cross-check references and make it more difficult for unsuitable individuals to operate in the UK market.  


The changes will allow users to search for information on:

  • Directors and Senior Managers
  • Staff certified as fit and proper by their firms
  • Other important individuals who undertake business with clients.


The Directory is expected to be available from March 2020.

Financial Reporting Lab Survey 

The Financial Reporting Lab (the Lab) of the FRC, published its 2019 survey in order to identify the reporting areas which it should select for its projects over the next few years. Completing the survey helps the Lab identify the areas in which stakeholders and companies are finding challenging or seeking improvements on. This then helps the Lab to find innovative ways to improve the effectiveness of financial reporting and help companies overcome the reporting challenges they face.


Please feel free to complete the survey yourself (it should only take 5 minutes). Alternatively, if you would like to submit your response via the QCA, please do so via this document, and email back to Jack Marshall,


The survey can be found here.

Hardman & Co. publish research on MiFID II and mention the QCA

On 5 March 2019, corporate research and analysis company, Hardman & Co. published its report ‘Aaah, we fade to grey’: Visage 1980 or the end of the ‘Age of Consensus’. Keith Hiscock, CEO of Hardman & Co., and Yingheng Chen, Senior Financial Analyst at Hardman & Co. produced the report which outlines the impact of MiFID II on the quantity and quality of research.


The report finds that, for a typical company with eight analysts, only four forecasts are visible and that this demonstrates the risk of confusing coverage with distribution.


The report also includes a reference to the qualitative evidence produced by the QCA, and, specifically, our Mid and Small-Cap Investor Survey. From this, Hardman & Co make two observations, these being:

  • The QCA “are restricted to mid- and small-cap coverage, although there is no reason to believe the large-cap landscape is any different”.
  • “There is a significant variance between the views of institutions and companies”.

If you wish to see the research in more detail, please do so here

Stephen Haddrill speech on the FRC's priorities 


On 5 March 2019, Stephen Haddrill, CEO of the FRC, delivered a speech on the FRC’s priority areas over the 2019-2020 period. Haddrill outlined governance, ensuring effective stewardship and raising the quality of audit as the main priority areas that the FRC will undertake major programmes of work on.


As well as this, Haddrill provided information on how the FRC intends to begin implementing Sir John Kingman’s recommendations. Haddrill announces that the FRC will be recruiting and is seeking to acquire greater sectoral and senior experience, as well as there being a full programme of work to implement Kingman’s recommendations.


The speech can be found here.

ESMA publish Q&A on the Prospectus Regulation 


On 27 March 2019, ESMA published a Question and Answer document on the Prospectus Regulation. The purpose of which is to promote supervisory approaches in the day-to-day application of the Prospectus Regulation. ESMA respond to questions asked by the public, financial market participants, competent authorities and other relevant stakeholders. 


ESMA will update the document on a regular basis and additional questions on the Prospectus Regulation can be submitted via its website. 


If you wish to see the Q&A document, please do so here

QCA surveys 


The QCA is currently seeking member input on a number of surveys.


The first survey, AIM Companies and MAR, seeks to obtain the viewpoints of both issuers and advisers on how AIM companies are finding Market Abuse Regulation in practice. The survey should take no longer than 10 minutes to complete. If you wish to take the survey, please do so here.


The second survey, QCA Proxy Advisers snap survey, is a short survey designed to help garner an understanding of how QCA members view Proxy Advisers. The survey should only take a couple of minutes to complete. If you wish to take the survey, please do so here.

QCA policy consultation responses

At the end of February 2019, all of the QCA's Expert Groups contributed to the response to the FCA's consultation on Patient Capital and Authorised Funds. See the response here

As well as this, the QCA submitted a response, on behalf of all its Expert Groups, to the Treasury Committees inquiry on the future of the UK’s financial services, at the beginning of March. See the response here.


Additionally, the QCA is currently seeking member input on the following consultations:

  • FRC: Business Reporting of Intangibles: Realistic Proposals 
  • ICAEW: Consultation on guidance for preparers of prospective financial information
  • European Commission: Consultation Document on the Update of the Guidelines on Non-financial Reporting
  • FRC: Consultation on stronger Going Concern standard for auditors
  • BEIS: Independent Review of the Financial Reporting Council: Initial consultation on the recommendations
  • FCA+FRC: Building a Regulatory Framework for Effective Stewardship
  • FRC: Proposed Revision to the UK Stewardship Code

If you have any comment you wish to contribute on any of the above consultations, please get in touch with Jack Marshall, Policy Adviser,



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