The Department of Business and Trade (DBT) has announced that it has withdrawn the draft Companies (Strategic Report and Directors' Report) (Amendment) Regulations 2023, which were laid in Parliament in July this year.
The Regulations (which were part of a package of measures to implement the proposals from the government's March 2021 white paper on audit and corporate governance reform, Restoring trust in audit and corporate governance – see our blog post here) would have introduced significant new annual reporting requirements for companies in scope, including a requirement to disclose distributable profits and make a new resilience statement and material fraud statement (for further details on the Regulations, see our briefing here).
The DBT says that the Regulations were withdrawn because of concerns about increasing the reporting burden on companies. The concerns were raised in response to the call for evidence on non-financial reporting requirements more generally, which the government launched in May 2023 (see our blog post here for further details).
Notwithstanding the withdrawal of the Regulations, the DBT has confirmed the government's ongoing commitment to audit and corporate governance reform, which includes the creation of the Audit, Reporting and Governance Authority, in place of the Financial Reporting Council. The primary legislation to implement these reforms will be laid "when Parliamentary time allows". It remains to be seen if it will be included in the King's Speech next month.
Separately the DBT has also launched a call for evidence on regulators generally, as part of its smarter regulation policy, through which the government is seeking to improve regulation post-Brexit. This call for evidence asks for views from interested stakeholders on the various UK regulators (other than financial services regulators, which fall within the Treasury's remit), seeking information on what works well and areas for improvement. The call for evidence is open until 7 January 2024.
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