Capital Markets Update – April 2022

5th April 2022

Welcome to the current edition of Capital Markets Update, the monthly briefing from the Corporate Group at Walker Morris rounding up the previous month’s regulatory developments within the equity capital markets and looking ahead to future developments.

March’s news

Investment Association publishes 2022 shareholder priorities

On 1 March 2022, the Investment Association published its Shareholder Priorities for 2022 which outlines investors’ expectations for the coming year.

Government publishes outcome of prospectus regime review

On 1 March 2022, Government published its Review Outcome setting out Government’s response following its consultation into the UK Prospectus Regime Review. The central proposal in the consultation, that the regulation of admissions to trading on regulated markets be separated from the regulation of public offers of securities, will be taken forward.

Register of overseas entities

On 1 March 2022, the Economic Crime (Transparency and Enforcement) Bill 2022 was published. The Bill requires any overseas entity that wishes to own UK land to take steps to identify their beneficial owners and to register them on a new register overseas entities, which must be set up by the Registrar of Companies. Information supplied to the register will be required to be verified.

Government urged to stop using the term ‘Chairman’

On 2 March 2022, the British Chambers of Commerce sent a letter to Government calling for Companies House to replace the term ‘Chairman’ with the gender-neutral term ‘Chair’ in its model articles.

FCA statement on Ukraine

On 3 March 2022, the Financial Conduct Authority (FCA) published a statement on the events in Ukraine and their impact on financial markets. It notes that both the events themselves, and the wide range of financial sanctions imposed in response will have multiple impacts on companies with securities admitted to UK markets, and reminds issuers of securities admitted to UK trading venues of their disclosure obligations under the UK Market Abuse Regulation.

FCA publishes quarterly consultation paper

On 3 March 2022, the FCA published Quarterly Consultation Paper 35 which consults on various proposed minor amendments to the FCA Handbook.

LSEG announces strategic investment and entry into private markets

On 15 March, the London Stock Exchange Group (LSEG) announced an investment and long-term strategic partnership with Floww, a digital platform that connects investors with private companies. The decision to partner with Floww complements LSEG’s strategy of modernising the capital markets and building its presence in the global private market.

Update on ethnic diversity on UK boards published

On 16 March 2022, the Parker Review, which considers the ethnic and cultural diversity of UK boards, published its updated report setting out findings from its latest survey of FTSE 100 and FTSE 250 boards.

FCA issues warning to Metro Bank for breach of the Listing Rules

On 16 March 2022, the FCA published Warning Notice Statement 22/2, which states that on 17 January 2022, the FCA issued warning notices to Metro Bank plc (a premium listed company) and certain individuals, notifying them that it proposed to take action in relation to breaches of the Listing Rules.

FCA publishes Primary Market Bulletin 39

On 23 March 2022, the FCA published Primary Market Bulletin 39, its newsletter for primary market participants. In this edition, the FCA announces the end of the temporary measures introduced in 2020 in response to the COVID-19 pandemic which allowed listed companies additional time to publish their annual and half-yearly financial reports; changed the FCA’s approach to working capital statements published in prospectuses and circulars approved by the FCA; and modified the Listing Rules to allow premium listed companies to apply for a dispensation from the requirement to hold a general meeting to approve Class 1 and related party transactions. The temporary measures will be removed with effect from 28 June 2022.

LSE announces end of temporary extensions

On 23 March 2022, the London Stock Exchange (LSE) published an edition of Inside AIM announcing the end of temporary extensions to reporting deadlines under the AIM Rules for audited annual accounts and half-yearly reports, which were introduced in 2020 in response to the COVID-19 pandemic. The announcement confirms that the temporary measures will no longer be available for any annual and half-year financial periods ending after 28 June 2022.

Panel publishes Notes to Advisers

On 24 March 2022, the Takeover Panel issued two Note to Advisers. The first in relation to the disclosure of information under Rule 9 and the second in relation to Rule 2.8 statements.

FCA consults on electronic formats for annual reports

On 25 March 2022, the FCA published Consultation Paper 22/5 which proposes minor changes to the Disclosure Guidance and Transparency Rules to allow listed companies to use a more up to date electronic format for their annual financial reports. Responses are requested by 8 April 2022.

IFRS Sustainability Disclosure Standards

On 31 March 2022, the International Sustainability Standards Board published exposure drafts of two IFRS Sustainability Disclosure Standards. The standards would require a company to centre its disclosures on the consideration of the governance, strategy and risk management of its business, and the metrics and targets it uses to measure, monitor and manage its significant sustainability or climate-related risks and opportunities. The consultation on the exposure drafts closes on 29 July 2022.

Looking ahead to April 2022

4 April – closing date for responses to HMRC’s consultation on domestic implementation of global minimum tax for large multinational groups.

6 April – Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, SI 2022/31 and Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022, SI 2022/46 come into force.

6 April – the new corporation tax charge for residential property developers will apply from this date.

6 April – Government’s report on its statutory review of the Reporting on Payment Practices and Performance Regulations 2017 must be published before this date.

6 April – the new business rates relief for green investments will take effect from this date.

8 April – closing date for responses to the FCA consultation on changes to the Disclosure Guidance and Transparency Rules relating to the electronic format of financial reports.

11 April – comments on the FCA’s quarterly consultation paper 35 (CP 22/4), which consults on various proposed minor amendments to the FCA Handbook, are requested by this date.

30 April – closing date for applications to become a signatory to the Stewardship Code.

For more information, advice or assistance, please contact our Corporate Group or alternatively, speak to one of our experts below.