Essential Corporate News – Week ending March 25, 2022

FCA: Primary Market Bulletin No. 39

On March 23, 2022 the Financial Conduct Authority (FCA) published Primary Market Bulletin 39 (PMB 39) in which it announces the removal of the temporary measures introduced in 2020 allowing for delayed annual and interim financial reporting, as well as rescinding the temporary measures regarding working capital statements and general meetings.

Corporate reporting for listed companies

In March 2020, the FCA announced temporary relief to allow issuers an additional two months to publish their annual financial reports. This was followed in May 2020 with further temporary relief to allow issuers an additional month to publish their half yearly financial reports (interims). These temporary reliefs will no longer be available for reporting periods ending on or after June 28, 2022. Issuers that cannot nmeet the deadlines in DTR 4.1.3R or DTR 4.2.2R will be expected to request a suspension of their listed securities.

Working capital statements

In April 2020, the FCA temporarily amended its approach to the disclosure of working capital statements in prospectuses and circulars it approved in light of the uniquely challenging circumstances created by the outbreak of the  pandemic. This temporarily revised approach permitted issuers, under certain circumstances, to disclose their key assumptions on business disruption during the pandemic without requiring the inclusion of a qualified working capital statement. This was set out in more detail in a technical supplement. Given both the reduction in disruption and the experience of issuers and their advisers in working through it, the relevant technical supplement will no longer be applied and the FCA will no longer approve prospectuses or circulars that use the temporarily revised approach to working capital statements after June 28, 2022.

General meeting requirements under the Listing Rules

To address the challenges faced by issuers in holding general meetings during the pandemic, in April 2020 the FCA announced a temporary modification to the Listing Rules on a case by case basis with regards to Class 1 transactions (LR 10.5.1R(2)) and Related party transactions (LR 11.1.7R). Premium listed companies undertaking a transaction within the scope of this policy could apply to the FCA for a dispensation from the requirement to hold a general meeting, subject to certain conditions. This was set out in more detail in a technical supplement, and was intended to only apply for the duration of the pandemic.

The FCA will no longer grant dispensations from the requirement to hold general meetings on this basis from June 28, 2022 and the relevant technical supplement will no longer be applied. However, the FCA draws attention to the joint guidance issued by the Chartered Governance Institute and the City of London Law Society (CLLS) with the support of the Department for Business, Energy and Industrial Strategy and the Financial Reporting Council. It aimed to help public companies plan for an AGM or other general meeting in 2021 and the FCA states that it is supportive of both industry and government action in this area to consider different ways of effectively engaging with shareholders. 

(FCA, Primary Market Bulletin No.39, 23.03.2022)

LSE: Inside AIM - Coronavirus and update of financial reporting deadlines

On March 23, 2022 London Stock Exchange plc issued an Inside AIM article updating previous temporary guidance for financial reporting deadlines required by the AIM Rules for Companies (AIM Rules) that were implemented in in light of the Coronavirus (COVID-19) situation. This Inside AIM advises that the temporary measures announced in March 2020 and June 2020 for both half-yearly reports (pursuant to AIM Rule 18) and annual audited accounts (pursuant to AIM Rule 19) will no longer be available for any annual financial periods and any half-year financial periods ending after June 28, 2022.

(LSE, Inside AIM, Coronavirus – Update of financial reporting deadlines, 23.03.2022)