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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.

UK Prospectus Regime Review

On 1 March 2022, HM Treasury released its response to the UK Prospectus Regime Review following the conclusion of the consultation period in September 2021. The Government’s response confirms that it will be taking forward important reforms to the UK’s regime for the public issuance of securities and admission to trading on capital markets. The Government intends to replace the regime currently contained in the UK Prospectus Regulation and will legislate to do so when parliamentary time allows.

The key changes are concerned with: 

  1. Admissions to trading on regulated markets;
  2. A new architecture for public offerings of securities in the UK;
  3. The “necessary information” test;
  4. Facilitating forward-looking information;
  5. Junior markets; 
  6. Scope of the new public offerings regime;
  7. Private companies; and 
  8. Public offerings from overseas. 

To view the outcome of the review, please click here.

To view the QCA’s summary, please click here.

UK Wholesale Markets Review

The Wholesale Markets Review set out to identify areas for reform that would capitalise on the UK’s new regulatory flexibility having left the EU. It’s key aims were:

  • Maintaining high regulatory standards 
  • Promoting openness and competitiveness 
  • Delivering fair and proportionate regulation
  • Supporting economic growth, innovation, and wealth creation across society

Retail investors

Some high-level objectives which respondents suggested UK authorities should take into account included:

  • Enhancing investor protection through measures to improve education and financial literacy.
  • Ensuring retail investors have access to consolidated market data so that they can have a cross market view.
  • Delineating clearly between regulation targeted at retail and wholesale investment services.
  • Helping retail investors to take part in the initial public offering (IPO) process.

Respondents also highlighted some specific policy suggestions to strengthen the UK’s regime for retail investors. These included:

  • Making changes to the Financial Promotion Order (FPO). 
  • Making opt up thresholds to professional clients more flexible and removing the need for annual attestations for advised and portfolio managed clients.
  • Removing non-complex products from the scope of the product governance regime, to facilitate greater retail access.

SME markets 

The government committed to increasing firms’ ability to access primary and secondary markets but states it will preserve appropriate levels of regulation and investor protection. The HMT and the FCA are undertaking work under the UK Listings Review but will also continue to explore the proposal for a new type of venue for SMEs. They cite the feedback received from this consultation as grounds for considering the case for expanding it to other types of businesses. 

In close collaboration with the FCA, the government will continue to engage market participants as it develops this policy. 

Although the consultation noted that new fund structures such as a Long-Term Asset Fund (LTAF) may also facilitate investment in SMEs, LTAFs were not a specific focus of the WMR consultation.

To view the outcome of the review, please click here


On 23 March 2022, the FCA published a Primary Markets Bulletin (Number 39), which announces the removal of the temporary measures introduced in 2020 as part of the response to the Covid-19 pandemic. The Bulletin is concerned with the removal of the ability for delayed annual and interim financial reporting, as well as rescinding the temporary measures regarding working capital statements and General Meetings. More detail is provided below:

  • Annual financial reports – on 26 March 2020, the FCA announced temporary relief to allow issuers an additional 2 months to publish their annual financial reports. This temporary relief will no longer be available for reporting periods ending on or after 28 June 2022.
  • Half yearly financial reports – on 27 May 2020, the FCA announced further temporary relief to allow issuers an additional month to publish their half yearly financial reports (interims). This temporary relief will no longer be available for reporting periods ending on or after 28 June 2022.
  • Working capital statements – on 8 April, the FCA temporarily amended its approach to the disclosure of working capital statements in prospectuses and circulars approved by the FCA in light of the pandemic. This temporarily revised approach permitted companies, under certain situations, to disclose their key assumptions on business disruption during the pandemic without requiring the inclusion of a qualified working capital statement. However, the FCA will no longer approve prospectuses or circulars that use the temporarily revised approach to working capital statements after 28 June 2022
  • General meeting requirements under the Listing Rules – on 8 April, the FCA announced a temporary modification to our Listing Rules on a case by case basis with regards to Class 1 transactions (LR 10.5.1R(2)) and Related party transactions (LR 11.1.7R). Premium listed companies undertaking a transaction within the scope of this policy could apply to us for a dispensation from the requirement to hold a general meeting. However, the FCA has stated that they will no longer grant dispensations from the requirement to hold General Meetings on this basis from 28 June 2022.

To view the PMB, please click here.

Inside AIM

On 23 March 2022, the London Stock Exchange (LSE) issued an Inside AIM article updating previous temporary guidance for financial reporting deadlines which were implemented during the Covid-19 pandemic.

The article states that, in response to the Covid-19 pandemic, the LSE implemented temporary measures for reporting deadlines that are required by the AIM Rules for Companies. The new Inside AIM article advises that the temporary measures in place for both half-yearly reports (pursuant to AIM Rule 18) and annual audited accounts (pursuant to AIM Rule 19) will no longer be available for any annual financial periods and any half-year financial periods ending after 28 June 2022.

To view the article, please click here.

Spring Statement 2022

On 23 March 2022, the Chancellor of the Exchequer, Rishi Sunak, delivered his Spring Statement to Parliament. The Spring Statement included the Government’s Tax Plan, which brings together proposals to reduce and reform taxes over the Parliament. In particular, the Plan contains three key priorities: helping families with the cost of living; creating the conditions for private sector led growth; and ensuring the proceeds of growth are shared fairly.

Of particular interest for quoted companies, the Government announced that it has concluded its review of the Enterprise Management Incentive (EMI) scheme. The Government announced the review during the Budget in 2020 in order to ensure that it provides support for high-growth companies to recruit and retain the best talent so that they can scale up effectively. The Government states that they have concluded that the EMI scheme remains effective and appropriately targeted. However, they have said that the scope of the review will be expanded to consider if the other discretionary tax-advantaged share scheme, the Company Share Option Plan, should be reformed to support companies as they grow beyond the scope of EMI.

This appears to be a positive development and we look forward to working with HM Treasury and HMRC as they take this review forward.

To view the full Spring Statement, please click here.

FCA Primary Markets Bulletin and Technical Note

At the end of February, the FCA published Primary Markets Bulletin number 38, which includes an update on the Technical Note concerned with the TCFD-aligned climate-related disclosure requirements for listed companies.

The Technical Note is designed to help companies and practitioners interpret the FCA’s Listing Rules and provide answers to common questions. The note sets out the requirement for Premium Listed commercial companies and certain Standard Listed companies to include a statement in their annual financial report setting out:

  • Whether they have made climate-related financial disclosures consistent with the TCFD’s recommendations and recommended disclosures in their annual financial report.
  • Where they have not made disclosures consistent with some or all of the TCFD’s recommendations and/or recommended disclosures, an explanation of why, and a description of any steps they are taking or plan to take to be able to make consistent disclosures in the future – including relevant timeframes for being able to make those disclosures.
  • Where they have included some, or all, of their disclosures in a document other than their annual financial report, an explanation of why.
  • Where in their annual financial report (or other relevant document) the various disclosures can be found.

To view PMB38, please click here.

To view the updated Technical Note, please click here.

Government white paper on reforming Companies House

At the end of February, the Government published a white paper, setting out the Government’s position on reforming Companies House ahead of introducing legislation into Parliament. The paper brings to a conclusion the results of several consultations and policy developments since September 2020.

The white paper includes responses to the following consultations:

The key changes being made are as follows:

  • The statutory role of the registrar of companies will expand beyond its current remit of registering company information to include a new function to maintain the integrity of the register of companies and the UK business environment.
  • Those setting up, managing, and controlling companies and other registrable entities will have a verified identity with Companies House, or have registered and verified their identity via an anti-money laundering supervised third-party agent.
  • The privacy mechanisms will be enhanced to protect personal information.
  • There will be a series of changes to improve the financial information on the register. These are intended to lead to better financial management practices within SMEs, promote the transition to digital reporting, support better business and credit decisions, and help wider efforts to combat economic crime.

To view the white paper, please click here.

IA Shareholder Priorities for 2022

On 1 March 2022, the Investment Association published its changes to its Shareholder Priorities for 2022, which have a particular focus on action on climate change and diversity. The Investment Association, which represents the interests of the UK investment management industry, issues its shareholder priorities annually ahead of the AGM season and outlines the key areas that investment managers deem to be critical drivers of long-term value for companies.

Linked to these priorities is the IVIS (Institutional Voting Information Service) approach to analysing these issues. IVIS will analyse UK listed companies against these priorities. To this end, IVIS will monitor companies with a particular focus on, amongst other things:

  • Responding to climate change – companies are encouraged to publish transition plans, with investors also expecting to see progress on the setting of targets to achieve net zero. IVIS will amber top companies that do not make disclosures against the four pillars of TCFD.
  • Accounting for climate change – companies should continue to disclose that the financial impact of climate change has been incorporated into the company’s accounts. IVIS will monitor whether auditors have highlighted climate change-related risks in key audit matters.
  • Audit quality – companies should continue to meet the shareholder expectations set out in the 2021 edition and demonstrate how they have judged the quality of audit received. IVIS will monitor whether the audit committee has demonstrated how it has assessed the quality of the audit.
  • Diversity – IVIS will red-top FTSE 100 companies that have not met the Parker Review target of one director from a minority ethnic group and will continue to amber top FTSE 250 companies that do not disclose the ethnic diversity of their board. IVIS will red top FTSE 350 companies where women represent 33% or less of the board or 28% or less of the executive committee and their direct reports. IVIS will red top FTSE Small Cap companies where women represent 25% or less of the board or 25% or less of the executive committee.
  • Stakeholder engagement – companies should continue to disclose their material stakeholders, the mechanisms they use to engage with them, and how their views impact on decision making.

To view the IA’s new Shareholder Priorities, please click here.

FCA statement on events in Ukraine

At the beginning of March, the FCA issued a statement regarding the events in Ukraine and the impact on financial markets. The statement was issued due to the impact that the financial sanctions imposed on Russia, Russian individuals and Russian business would have on companies with securities admitted to UK markets.

The statement reminded companies with securities admitted to UK trading venues of their disclosure obligations under the UK Market Abuse Regulation (MAR). Companies in scope of MAR are required to fulfil their obligations to disclose inside information as soon as possible unless they have a valid reason under the regulation to delay disclosure. This includes continuing to assess carefully what information constitutes inside information, recognising that both the invasion and responses to it by governments globally may alter the nature of information that is material to a business’ assets, operations and prospects. Companies assessing the effect of financial sanctions in all relevant jurisdictions should where necessary take legal advice.

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

Parker Review update

On 16 March 2022, the Parker Review Committee published an update report on improving the ethnic diversity of UK boards. The Review, led by Sir John Parker, published the update report which includes the results of its latest survey on the ethnic diversity of FTSE 350 company boards. The key findings of the update report highlights that as of 31 December 2021:

  • In total, 89 of the FTSE 100 companies met the Parker Review target of having at least one director from a minority ethnic group on their board.
  • 128 of the 233 FTSE 250 companies that responded indicated that they had ethnic diversity on their boards. This represent progress towards meeting the Parker Review target for all FTSE 250 companies to have minority ethnic representation on their boards by 2024.

In addition to the above findings, the report provides some initial findings of research being undertaken for the FRC into the barriers preventing individuals from minority ethnic groups achieving representation in senior positions in FTSE 350 companies. The key initial findings include:

  • Companies are implementing initiatives to meet the objective of increasing ethnic diversity in senior leadership positions.
  • Evidence-based and targeted programmes can demonstrate active, direct initiatives to increase the diversity of senior leadership.
  • Recruitment based on merit and diversity is being used by some companies effectively to increase representation of minority ethnic groups at board level.

To view the report, please click here.

TNFD draft disclosure framework

During March, the Taskforce on Nature-related Financial Disclosures (TNFD) announced the release of the first version of its disclosure framework for consultation. The TNFD framework aims to provide guidance for organisations to report and act on evolving nature-related risks, with the intention of supporting a shift in global financial flows away from nature-negative outcomes and towards more nature-positive outcomes.

The first version of the TNFD framework consists of:

  • Fundamentals for understanding nature – this includes science-based concepts and definitions to help market participants understand nature and nature-related risks and opportunities.
  • The TNFD draft disclosure recommendations – these are aligned with the approach taken by the Taskforce on Climate-related Financial Disclosures (TCFD). The TNFD recommendations have the same four pillars – governance, strategy, risk management and metrics and targets – and the disclosure recommendations are closely aligned to these.
  • The process for nature-related risk and opportunity assessment – this includes practical guidance on nature-related risk and opportunity analysis for companies and financial institutions to consider incorporate into their enterprise risk and portfolio management process.

The TNFD will aim to publish several updated versions throughout 2022 and into 2023, with the final version being published in September 2023.

To view the TNFD framework, 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

The QCA has recently submitted responses to the following consultations:

  1. Takeover Panel: Miscellaneous Code Amendments (Submitted: 18 February 2021)

The Takeover Panel published a consultation on Miscellaneous Code Amendments. The consultation seeks views on proposed changes to various provisions of the Takeover Code. Some of the key proposed amendments include:

  • Requiring a publicly identified potential offeror to announce any minimum level it is obliged to offer to offeree company shareholders.
  • Restricting a mandatory offeror from obtaining additional interests in shares in the offeree company in the 14 days up to and including the unconditional date and the expiry of the acceptance condition.
  • Introducing a new Note 5 on Rule 9.5 to clarify the application of the look-back period for determining the minimum price of a mandatory offer.

In our response, we highlighted our support for the proposed changes to the Code.

To view our full response, please click here.

  1. FRC: Draft Strategy, Plan and Budget (Submitted: 1 March 2022)

On 18 January 2022, the FRC set out its draft 3-year plan and budget for 2022-2025, which includes its preparation for the transition to the Audit, Reporting and Governance Authority. The draft plan contains a breakdown of the FRC’s intended expenditure for 2022-2023 and a summary of the expected trajectory costs and headcount for the following two years.

In our response, we stressed the need for the FRC to maintain its commitment to proportionality and the need to ensure that this principle remains at the forefront of its regulatory decision-making, particularly as it undergoes its transition into the Audit, Reporting and Governance Authority (ARGA). In this light, we also highlighted the need for the new regulator to be a transparent one, with strong governance to ensure that the confidence of stakeholders is built and maintained. Finally, we stated that a further increase to the preparers levy was inappropriate given the current environment and the increases that have occurred consistently in previous years.

To view our full response, please click here.

  1. UKEB: Draft Regulatory Strategy (Submitted: 1 March 2022)

The UKEB has also released its Draft Regulatory Strategy for comment. The document sets out the UKEB’s strategic objectives and how it will measure its success.

Overall, our response was in support of the UKEB’s Regulatory Strategy.

To view our full response, please click here.

  1. HM Treasury: Financial Promotion Exemptions for High-Net Worth Individuals and Sophisticated Investors (Submitted: 9 March 2022)

The Treasury is proposing to maintain the exemptions for high-net worth and sophisticated investors, but also puts forward several key areas for reform. This includes:

  • Increasing the financial thresholds for high-net worth individuals from £100k earnings and £250k net assets to £150k and £385k respectively;
  • Amending the criteria for self-certified sophistication;
  • Placing a greater degree of responsibility on firms to ensure individuals meet the exemption criteria; and
  • Updating the high-net-worth individual and self-certified sophisticated investor statements.

In our response, we highlighted the need to maintain the high net worth and sophisticated investors exemptions. However, we highlighted that we did not agree with the proposed new financial thresholds being proposed by HM Treasury, stating that a more fundamental assessment as to what the correct thresholds should be needed to take place, rather than simply adjusting them to reflect inflation. Moreover, we also argued that greater responsibility should not be placed on firms to ensure that prospective investors satisfied the thresholds, in particular, without the issuance of guidance from the Treasury.

To view our full response, please click here.

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