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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.

FRC Lab risks, uncertainties, opportunities and scenarios

In September, the Financial Reporting Lab (the Lab) of the FRC published its report on risks, uncertainties, opportunities and scenarios. The report explains what investors want to understand from companies about reporting on risks, uncertainties, opportunities and the use of scenarios. It also provides several practical examples of corporate reporting that better meet the needs of investors and includes insight on how investors would like reporting on resilience to develop.

The report highlights that improvements in the disclosures of risks helps to assist investors in making assessments about a company’s longer-term prospects, how climate risk may reshape risk reporting and the value of business resilience reporting.

To view the report, please click here.  

FRC lists signatories to UK Stewardship Code

Early in September, the FRC published a list of successful signatories to the UK Stewardship Code. The Stewardship Code sets high standards of stewardship for those investing money on behalf of UK savers and pensioners.

In total, 189 applicants were made to be signatories of the list (147 asset managers, 28 asset owners and 14 service providers), with roughly two-thirds (125) of these being successful. The FRC conducted the review process which included consideration of an organisations’ investment styles, sizes and types. The successful applicants represent £20 trillion of assets under management.

The successful applicants better demonstrated their commitment to stewardship. This included incorporating ESG factors into their investment decision-making, reporting on asset classes other than listed equity and identifying outcomes of their efforts. The organisations that did not make the list often failed to address all the principles or sufficiently evidence their approach. Other areas of weakness included reporting on the approach to review and assurance, and monitoring service providers.

To view the list, please click here.

FCA Green FinTech challenge

In September, the FCA updated its Green FinTech Challenge webpage to announce the launch of a second application window. The FinTech Challenge involves the FCA taking a more active role in driving innovation in order to support development and live market testing of new products and services that will aid the transition to a net zero economy.

The Green FinTech Challenge is open to start-ups, incumbents and technology providers that meet prescribed eligibility criteria. The FCA is particularly encouraging applications from organisations that are developing innovative green solutions that require regulatory support to bring their products and services to market. The FCA is especially interested in the products and services that will:

  • enable transparency in disclosure and reporting on sustainability by companies along the investment chain; and
  • help consumers better understand the ESG characteristics of relevant products and providers they engage with, as well as provide visibility around alternatives aligned with their needs and preferences.

The deadline for applications to the Green FinTech Challenge is 15 November 2021.

To view the webpage, please click here.

FRC review of Streamlined Energy and Carbon Reporting

On 8 September, the FRC published a review of its findings on Streamlined Energy and Carbon Reporting (SECR). The review analyses reporting on emissions, energy consumption and related matters under the new SECR rules which came into effect in April 2019. It considered how companies had complied with the SECR requirements, identified examples of emerging good practice and outlined its expectation for future reporting.

The review found that, on the whole, while there was a good level of compliance with the minimum statutory disclosure requirements for emissions and consumption, more needs to be done to make these disclosures understandable and relevant for users. In particular, this includes entities needing to explain more clearly how information is calculated, which operations and emissions are included in their reported numbers and the level of third-party assurance obtained over the information. There also needs to be better alignment between these disclosures and other narrative reporting on climate change, and especially any emission-reduction targets.

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

Chancellors announces spending review and Autumn Budget

On 7 September 2021, the Government announced that its spending plans will be set out in a Spending Review on 27 October 2021 alongside the Autumn Budget. The three-year Spending Review will set out the UK Government departments’ resource and capital budgets for 2022-23 to 2024-25 and the devolved administrations’ block grants for the same period.

One of the focal points of the Spending Review is the focus on how the Government will “Build Back Better” through:

  • Ensuring strong and innovative public services – making people’s lives better across the country by investing in the NHS, education, the criminal justice system and housing;
  • Levelling up across the UK to increase and spread opportunity; unleash the potential of places by improving outcomes UK-wide where they lag and working closely with local leaders; and strengthen the private sector where it is weak;
  • Leading the transition to Net Zero across the country and more globally;
  • Advancing Global Britain and seizing the opportunities of EU Exit; and
  • Delivering our Plan for Growth – delivering on our ambitious plans for an infrastructure and innovation revolution and cementing the UK as a scientific superpower, working in close partnership with the private sector.

For further information, please click here.

FRC Lab electronic reporting

Earlier in 2021, the Financial Reporting Lab (the Lab) released a survey asking companies and service provides to comment on their preparations for the introduction of structured electronic reporting for annual financial reports as part of the UK implementation of a wider cross-EU initiative (ESEF).

In September, the Lab published the results of the survey, which provides evidence to show that UK companies are beginning to take the right steps to meet the requirements. However, there are still some important outstanding actions.

The Lab intends to publish a best practice report in the autumn after it has reviewed a set of UK and EU ESEF filings.

To view the results of the survey, please click here.

Government policy paper on dematerialisation

On 16 September 2021, the Government published a policy paper announcing a package of proposed regulatory reforms. The package of proposed reforms is part of the Government’s response to the recommendations made by the Taskforce on Innovation, Growth and Regulatory Reform, and specifically, how the UK can reshape its approach to regulation following Brexit.

One of the proposed reforms is a proposal for the dematerialisation of the minority of shares that are still held in paper, as opposed to electronic form. The Government is seeking to work with market participants, including regulators and shareholders, in order to determine the most appropriate mechanism for converting these paper shares into electronic form, while preserving the rights of existing shareholders.

The policy paper also mentions that the Government is sponsoring an independent, judicially-chaired working group to look at increasing best practice and confidence in the use of electronic signatures.

To view the policy paper, please click here.

FRC thematic review of going concern and viability disclosures 

In September, the FRC published a report summarising the findings of its review of the going concern and viability disclosures across a selection of annual reports and accounts for year ends between December 2020 and March 2021. The report emphasises the importance of quality disclosures against the backdrop of the Covid-19 pandemic, highlighting several areas for improvement in the process. 

The key findings of the report include: 

  • The disclosures reviewed showed a lack of sufficient qualitative and quantitative detail concerning the inputs and assumptions used in forecast scenarios supporting the viability and going concern assessments. 
  • There was evidence of significant judgements being made in some instances, with the company not identifying or explaining the judgements. 
  • Most companies had noted the principle risks and uncertainties identified in the strategic report when assessing viability but disclosure of how these risks and uncertainties had been modelled in viability scenarios was not always clear. 
  • Overall, companies did not disclose information on their resilience to risks that could threaten their going concern status or longer-term viability.
  • The most common viability period selected by companies was three years.

To view the report, please click here

Increase in dividend taxation

The government has proposed a 1.25% increase in the tax on share dividend income alongside the same rise in national insurance.

The QCA will be responding to this in its Autumn Budget submission due on the 30th September 2021.

Articles, news and speeches

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

ICAEW why mid-cap companies are prioritising ESG

The Institute for Chartered Accountants in England and Wales (ICAEW) recently published an article on why ESG tops the business priorities of mid-cap companies. The article claims that almost a third of mid-market businesses say they face a high risk of losing business if they fail to act on ESG according to new research. ESG is now reported to be rank higher than Brexit and Covid in terms of priority.

The article references a report produced by BDO that suggest ESG is becoming increasingly important with 38% of business leaders ranking meeting ESG criteria as their highest priority. Business leaders also suggested that there was a high degree of risk that of losing business if companies fail to meet acceptable ESG standards. 

To view the article, 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. 

IASB and UKEB field testing Disclosure Pilot

The UK Endorsement Board (UKEB) in conjunction with the International Accounting Standards Board (IASB) are seeking UK companies to field-test the proposals contained in ED/2021/3 Disclosure Requirements in IFRS Standards – A Pilot Approach (the Disclosure Pilot). This exposure draft proposes to replace mandatory disclosure requirements with an objectives based regime, and proposes amendments to the disclosure requirements in IFRS 13 Fair Value Measurement and IAS 19 Employee Benefits. Field testing provides the opportunity to test the proposals, identify any issues specific to UK companies, and influence the further development of these proposals by the IASB. The UKEB will use the results of field testing to prepare the UKEB Comment Letter to the IASB, and all results of the field testing will be shared with the IASB.

The IASB has recently extended the deadline for the Disclosure Pilot until 12 January 2022, so they are now able to offer a wider and more convenient range of dates for field testing.

Field testing involves testing the IASB’s proposals, by either:

  • preparing mock disclosures applying the proposed requirements for IFRS13 and/or IAS 19; and/or
  • completing a questionnaire about the mock disclosures including questions about application; and/or
  • discussing with UKEB/IASB staff the process or impact of preparing the mock disclosures.

The UKEB are keen to understand the impact of the proposals on companies of all sizes, and are happy to be flexible to find a scope of field testing that fits with your ability to participate.

Please contact the UKEB on if you are interested in participating or would like to learn more about the field tests.


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’s Primary Markets Expert Group contributed to the response to HM Treasury’s consultation on the Power to block listings on national security grounds.

To view the response, please click here.

The QCA’s Accounting, Auditing and Financial Reporting Expert Group and Corporate Governance Expert Group contributed to the response to the FCA’s consultation on Enhancing climate-related disclosures for Standard Listed companies.

To view the response, please click here.

The QCA responded to the FCA’s Primary Markets Effectiveness Review.

To view the response, please click here.

The QCA is seeking views on the below consultation(s):

  • HM Treasury: UK Prospectus Regime Review (Deadline: 24 September 2021)

    • HM Treasury published the review following the recommendation within Lord Hill’s Listing Review. The matters which HM Treasury are seeking views on, amongst other issues, include:

      • its overall approach to reform, including that admissions of securities and the public offer rules are dealt with separately;
      • proposed new rules on admissions to trading on regulated markets, including whether the FCA should be granted discretion to set rules on whether or not a prospectus is required when securities are admitted to trading;
      • prospectus content and ancillary powers for the FCA, including on the potential removal of the requirement to review prospectuses;
      • how HMT can encourage the inclusion of more forward-looking information;
      • how a revised regime would impact companies trading on MTFs;
      • and the revised scope of the UK’s public offering rules.

  • HM Treasury: Wholesale Markets Review (Deadline: 24 September 2021)

    • The consultation was released following the Lord Hill Review and proposed changes to the UK’s wholesale markets. Regarding SME markets, the Government is exploring a new class of trading venue with regulatory requirements tailored for smaller SMEs. To do so would require amendments to MAR, a new offering document regime and the creation of eligibility criteria for a smaller subset of SMEs within the current MiFID II definition. The key regulatory change would be the reduction of company disclosure requirements.

  • IASB: Third Agenda Consultation (Deadline: 27 September 2021)

    • The consultation is seeking views on what the Board’s priorities should be over the next five years. In particular, they would like to hear views on: the strategic direction and balance of the Board’s activities; the criteria for assessing the priority of financial reporting issues that could be added to the work plan; and new financial reporting issues that could be given priority in the Board’s work plan.

  • FCA: Diversity and inclusion on company boards and executive committees (Deadline: 20 October 2021)

    • The FCA is proposing to change its Listing Rules to require companies to disclose annually on a comply or explain basis whether they meet specific board diversity targets to publish diversity data on their boards and executive management.

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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