May’s news

Challenge withdrawn to FCA decision to discontinue listing of shares

On 14 May 2024, the Financial Conduct Authority (FCA) published a statement to report that Umuthi Healthcare Solutions PLC had withdrawn its reference to the Upper Tribunal in connection with the FCA’s decision to discontinue the listing of its standard shares from the Official List. The FCA had decided to cancel the listing having found that there were special circumstances which precluded normal regular dealing in the shares. The FCA’s first supervisory notice therefore remains in force and the discontinuance of the listing of the shares remains in effect.

Takeover Panel publishes information on offer or intention statements

On 15 May 2024, the Takeover Panel Executive published Bulletin 7 which discusses provisions in the Takeover Code that require a bidder to make specific statements of intention regarding various aspects of a target’s business in the announcement of a firm intention to make an offer (Rule 2.7) and the offer document (Rule 24.2). The Bulletin highlights that the Executive occasionally hears arguments that a bidder has not formulated any intentions towards the target that require disclosure. In the Executive’s view, these arguments do not provide an acceptable basis for formulating statements of intention. The Executive expects that a bidder will almost always have developed specific intentions, which must be stated in both the firm offer announcement and the offer document.

Government publishes framework for UK sustainability reporting standards

On 16 May 2024, the Department for Business and Trade published a policy paper entitled Framework and terms of reference for the development of UK Sustainability Reporting Standards. The paper explains how UK Sustainability Reporting Standards will be developed and implemented in the UK. In addition, Government has published Sustainability Disclosure Requirements: Implementation Update 2024, which provides an update on its wider programme of work to develop a Sustainability Disclosure Requirements regime in the UK.

Regulations published to amend reporting on payment practices

On 21 May 2024, the draft Reporting on Payment Practices and Performance (Amendment) (No. 2) Regulations 2024 were laid before Parliament, together with a draft Explanatory Memorandum. The regulations will amend the Reporting on Payment Practices and Performance Regulations 2017, which require large companies to publicly report twice a year on a government web service about their payment practices, policies and performance in relation to paying suppliers. The draft regulations introduce requirements for in-scope companies to publish certain information relating to retention clauses in qualifying construction contracts with suppliers. The regulations will come into force on 1 October 2024.

FCA publishes Primary Market Bulletin 49

On 22 May 2024, the FCA published the 49th edition of the Primary Market Bulletin. This edition includes the results of its review of compliance with disclosure obligations under the Listing Rules in relation to long term incentive plans; a reminder to issuers of their disclosure and filing requirements for annual financial reports; proposals to align the ethnicity reporting categories with the recent updates made by the Office for National Statistics; and that following the announcement by Government that it now expects to complete the UK endorsement process of the International Sustainability Standards Board Standards by Q1 2025, the FCA is updating the timelines previously set out in PMB 45.

Draft Registrar’s Rules for new identity verification regime

On 22 May 2024, Companies House published draft Registrar’s Rules, which set out the information and evidence that will be required when applying for identity verification at Companies House under the new regime introduced by the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023).

Identity verification at Companies House

On 23 May 2024, the draft Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024 and explanatory memorandum were published and laid before Parliament. The draft Regulations make provisions under the Companies Act 2006 concerning identity verification, authorised corporate service providers and unique identifiers. The regulations are part of the new identity verification scheme introduced by the ECCTA 2023.

EU adopts the Corporate Sustainability Due Diligence Directive

On 24 May 2024, the EU Council adopted the draft Corporate Sustainability Due Diligence Directive (CS3D). The CS3D requires in-scope companies to integrate due diligence measures into their policies and risk management systems to identify and address human rights and environmental risks that result from their own operations, as well as those of their subsidiaries and business partners. The CS3D will apply to UK companies generating a net turnover exceeding EUR450 million within the EU and will be phased in from 2027.

House of Lords summarises concerns over publicising enforcement investigations

On 24 May 2024, the House of Lords Financial Services Regulation Committee published a letter summarising the committee’s concerns relating to the FCA’s proposals on publicising enforcement investigations.

Looking ahead to June 2024

1 June – new document charges will be payable on offer documents and Rule 9 waiver circulars published on or after this date.

5 June – closing date for responses to FCA Consultation Paper 24/7 on proposals to introduce a new bundled payment option for investment research.

9 June – closing date for HM Treasury consultation on proposals to improve the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

30 June – the FCA is expected to consult in an edition of its Primary Market Bulletin this month on amendments to certain Technical and Procedural Notes in the FCA Knowledge Base as it prepares for implementation of its listing reforms.