Capital Markets Update – October 2021

5th October 2021

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.

September’s news

FRC Lab report on risks, uncertainties, opportunities and scenarios in corporate reporting

On 2 September 2021, the FRC Lab published a report on corporate reporting concerning risks, uncertainties, opportunities and scenarios. The report notes that despite many companies beginning to improve their management of risk, uncertainty and opportunities, this is not always translating into useful disclosure.

FCA publishes quarterly consultation paper

On 3 September 2021, the Financial Conduct Authority (FCA) published its Quarterly Consultation Paper which consults on various proposed minor amendments to the FCA Handbook.

ICGN publishes Global Governance Principles

On 3 September 2021, the International Corporate Governance Network (ICGN) launched its updated Global Governance Principles (GGP), which are designed to advance the highest standards of corporate governance and stewardship worldwide. The GGP apply predominantly to publicly-listed companies, but are also relevant to non-listed companies seeking to adopt high standards of corporate governance practice.

FRC publishes thematic review on Streamlined Energy and Carbon Reporting

On 8 September 2021, the Financial Reporting Council (FRC) published a thematic review into reporting on emissions, energy consumption and related matters under the Streamlined Energy and Carbon Reporting (SECR) rules. The SECR rules set out the required statutory disclosures about emissions and energy use and apply in respect of financial years beginning on or after 1 April 2019.

FRC Lab publishes results of survey on electronic reporting

On 9 September 2021, the FRC Lab published its survey on UK electronic reporting which considers preparations for the introduction of structured electronic reporting for annual financial reports under DTR 4.1.14.

Investment Association responds to consultation on disclosure requirements

On 10 September 2021, the Investment Association (IA) published its response to the proposals from the FCA to introduce climate-related disclosure requirements aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for asset managers, life insurers, and FCA-regulated pension providers.

Investment Association responds to consultation on extension of climate disclosures

On 10 September 2021, the IA published its response to the FCA’s proposals to extend the new continuing obligation for premium listed companies to make climate-related disclosures, which was introduced in December 2020, to standard listed companies.

Takeover Panel announces auction process

On 16 September 2021, the Takeover Panel issued Panel Statement 2021/18 announcing that the Panel Executive had, at the request of the bid parties, established an auction procedure to resolve the competitive bid situation for Augean plc.

Plans to modernise the listing regime

On 17 September 2021, the director of market oversight at the FCA delivered a speech on the regulator’s plans to modernise the listing regime. The FCA is aiming to move swiftly to make final rules before the end of 2021 on those areas it has consulted on so that 2022’s initial public offerings will be able to benefit from the initial round of changes.

CLLS and Law Society publish consultation responses

On 21 September 2021, the City of London Law Society (CLLS) and the Law Society of England and Wales published a joint response to the recent consultations conducted by the FCA into the effectiveness of UK primary markets and the consultation on extending climate-related disclosures to standard listed companies.

FRC review of viability and going concern disclosures

On 22 September 2021, the FRC published the key findings from its review of the viability and going concern disclosures from a sample of listed and AIM companies’ annual reports and accounts with year ends between December 2020 and March 2021.

Regulations amending the Financial Promotion Order 2005 made

On 22 September 2021, the Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021 were made and laid before Parliament. These regulations come into force on 18 October 2021 and remedy certain deficiencies in the Financial Promotion Order 2005 following the UK’s withdrawal from the EU.

Takeover Panel announces auction process in relation to Wm Morrison Supermarkets plc

On 29 September 2021, the Takeover Panel announced that, after discussions with the competing bidders seeking to acquire Wm Morrison Supermarkets plc, the Panel Executive had, at the request of the bid parties, established an auction procedure to resolve the competitive bid situation.

FRC Lab seeks views on production of ESG data

On 29 September 2021, the FRC announced that its Financial Reporting Lab had launched a new project looking at how companies produce data on environmental, social and governance (ESG) issues. The Financial Reporting Lab is seeking the participation of companies, investors, service and systems providers and other stakeholders, and asks them to contact the Lab by 15 November 2021.

Deadline for gender pay gap reporting

On 30 September 2021, the Equality and Human Rights Commission reminded companies with 250 or more employees that they are required to report their gender pay gap by 5 October 2021.

Looking ahead to October 2021

5 October – the Equality and Human Rights Commission will start taking enforcement action against employers failing to report their gender pay gap from this date.

7 October – closing date for responses to FRC’s consultation on proposed amendments to the Audit Enforcement Procedure.

11 October – closing date for responses to the FCA’s Quarterly Consultation Paper No 33.

18 October – the Markets in Financial Instruments, Benchmarks and Financial Promotions (Amendment) (EU Exit) Regulations 2021, SI 2021/1074 come into force.

20 October – closing date for responses to the FCA’s consultation on proposed changes to the Listing Rules to require a new annual statement on board diversity.

27 October – the date of the Chancellor’s autumn budget and spending review.

31 October – closing date for applications to be included in the list of signatories to the 2020 Stewardship Code.