This month's news
ICSA and IA respond to corporate reporting consultation
On 1 February 2021, ICSA: The Chartered Governance Institute issued a response to the Financial Reporting Council's proposals for a new corporate reporting system. Overall the response was supportive of the aim of replacing the existing corporate reporting requirements however a number of observations about the proposed new model were made.
Similarly on 5 February 2021, the Investment Association (IA) published its response to the FRC's discussion paper. The IA's response can be found here.
Reporting against the Wates Principles
On 5 February 2021, the Financial Reporting Council (FRC) published an article by Sir James Wates which provides some insight into reporting against the Wates Corporate Governance Principles which require large private companies to report on their corporate governance for financial years starting on or after 1 January 2019.
FCA announces new major shareholdings notification portal
On 8 February 2021, the Financial Conduct Authority (FCA) announced that its new major shareholdings notification portal will be live on 22 March 2021.
European Commission announces proposals to amend the Prospectus Regulation
On 11 February 2021, the European Parliament announced amendments to the Prospectus Regulation which create a temporary, short-form "EU recovery prospectus". This simplified document should help companies in the EU to raise the capital they need to rebuild their business quickly in the wake of the pandemic.
Interpretation of Article 3(2) and Article 6 of the Prospectus Directive
On 11 February 2021, the Advocate General delivered a preliminary ruling concerning the interpretation of Article 3(2) (Obligation to publish a prospectus) and Article 6 (Responsibility attaching to the prospectus) of the Prospectus Directive. You can read the ruling here.
FRC publishes its draft budget for consultation
On 12 February 2021, the FRC published for consultation its draft Strategy, Plan & Budget for 2021/22. Comments are requested by 12 March 2021.
Takeover Panel announces end of auction process
On 22 February 2021, the Takeover Panel issued Panel Statement 2021/4 confirming that the default auction procedure that had been applied to resolve the competitive bid situation for G4S plc had come to an end.
FRC announces next stage of operational separation for accountants
On 23 February 2021, the FRC announced that it had reviewed the implementation plans submitted by the 'Big 4' accountancy firms in relation to the operational separation of their audit practices. Having discussed them with the firms individually, the FRC is now content to move to the next stage of implementation. The firms' progress will continue to be closely monitored against the milestones in their plans and the FRC will provide feedback and challenge to the firms on their arrangements.
ICSA publishes new AGM guidance note
On 24 February 2021, ICSA: The Chartered Governance Institute published new guidance about the impact of Covid-19 on company AGMs which reflects the continuing impact of the coronavirus pandemic on companies' ability to hold physical general meetings. The guidance was prepared in conjunction with the City of London Law Society Company Law Committee and Martin Moore QC.
Final Hampton-Alexander Review report published
On 24 February 2021, the Hampton-Alexander Review published its final report on gender balance in listed companies. The final report reveals that the number of women on FTSE boards is up by 50% in the five years since the Review was first published.
Suspension of strike offs lifted
On 26 February 2021, Companies House announced that its temporary measure to suspend voluntary and compulsory strike off processes from 21 January 2021, will be lifted on 8 March 2021. From that date it will resume the process to dissolve companies who've applied for voluntary strike off, and those it believes are no longer carrying on business or in operation.
FRC publishes guidance on improving the quality of reporting
On 26 February 2021, the FRC published new guidance on improving the quality of 'comply or explain' reporting. The guidance provides companies with advice on how to report transparently and effectively when departing from certain provisions of the UK Corporate Governance Code 2018. The new guidance builds on the findings of the FRC's Review of Corporate Governance Reporting issued in November 2020.
FCA publishes Handbook Notice 85
On 26 February 2021, the FCA published Handbook Notice 85 which covers amendments to the FCA Handbook and other materials made on 25 February 2021.
Looking ahead to March 2021
10 March – Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector applies from this date.
12 March – closing date for comments on the FRC's draft Strategy, Plan & Budget 2021/22.
21 March – consultation on draft legislation to improve climate change reporting closes.
22 March – new major shareholdings notification portal goes live.
30 March – small supplier exemption from the restrictions on termination of supply contracts expire.
30 March – temporary relaxations of AGM requirements expire.
31 March – temporary restrictions on the use of statutory demands and winding up petitions expire.
31 March – closing date for signatory applications to the UK Stewardship Code 2020.
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