FCA: Quarterly Consultation No 29 – CP20/18
On September 4, 2020 the Financial Conduct Authority (FCA) published its latest Quarterly Consultation which includes changes to Chapter 8 of the Listing Rules to align provisions there with provisions for “exempted documents” under the Prospectus Regulation.
When the Prospectus Regulation replaced the Prospectus Directive in July 2019, the FCA replaced the Prospectus Rules sourcebook with the Prospectus Regulation sourcebook and made other consequential changes to the Listing Rules, including amending references to “equivalent documents” with references to exempted documents in line with language in the Prospectus Regulation. However, the FCA has realised that LR 8.4.9R(1)(b), LR 8.4.3R(1)(b) and LR 8.4.3R(4), which concern the role of sponsors in relation to transactions by companies with a premium listing, were not amended and so amendments are now proposed to align these Listing Rules with the previous changes made under the Prospectus Regulation.
The draft Instrument setting out these changes includes two annexes. The first makes changes that will apply while the UK remains in a transition period following its exit from the EU, which is due to end on December 31, 2020. The second makes changes to apply from January 1, 2021, when EU law will no longer apply in the UK and instead EU legislation will be converted into UK law. Both are drafted on the basis that the amendments to LR 8.4.3R and LR 8.4.9R proposed in the Exiting the European Union Handbook (Amendments) Instrument, as consulted on in CP19/27, are not to be made.
Comments are requested by November 4, 2020.
(FCA, Quarterly Consultation No 29 – CP20/18, 04.09.2020)
FCA: Final notice for false or misleading impression
On September 9, 2020, the Financial Conduct Authority (FCA) published a final notice publicly censuring Conor Foley, the former CEO of Worldspreads Group, for market abuse (dissemination, manipulating transactions and false or misleading impressions) and banning him from performing any roles linked to regulated activity.
On July 3, 2020, the FCA published a Decision Notice that had also imposed a financial penalty of £658,900 on the former CEO, to which he subsequently provided evidence of his serious financial hardship. The FCA has therefore imposed a public censure in lieu of the financial penalty and the former CEO has withdrawn a reference to the Upper Tribunal seeking to review the Decision Notice.
(FCA, Market abuse: FCA final notice for false or misleading impression – press release, 09.09.2020)
(FCA: Market abuse: FCA final notice for Conor Foley, 07.09.2020)
FRC: Call for participants in new lab project - reporting on risks, uncertainties and scenarios
On September 10, 2020, the Financial Reporting Council’s (FRC) Financial Reporting Lab published an invitation to investors and companies to participate in a new project on corporate disclosures on risks, uncertainties and scenarios.
The FRC’s Financial Reporting Lab states that the scope of the project is likely to:
- Explore whether and how companies’ risk identification, risk management and scenario planning processes are evolving and how this is impacting reporting and disclosure.
- Determine whether the time horizons utilised in scenario planning have changed.
- Consider how companies communicate uncertainty in their disclosures.
- Discuss which areas of reporting are most challenging for companies.
- Explore examples of risks and related disclosures where investor focus has been heightened by the current pandemic (for example, supply chain risk, existential risk/viability of business model).
- Analyse how investors use this information in their decision-making process and identify whether reporting meets investor needs.
- Discuss what types of disclosures would be most useful in interim reports.
- Highlight best practice in current company reporting.
The FRC’s Financial Reporting Lab invites investors, companies and other interested parties to communicate their interest in participating by emailing FinancialReportingLab@frc.org.uk and expects to publish its findings in 2021.
(FRC: Call for participants in new lab project: Reporting on risks, uncertainties and scenarios, 10.09.2020)
Companies House: Companies House resumes voluntary strike off process
On September 10, 2020, Companies House resumed its voluntary strike off process, following its temporary suspension introduced in March 2020 in light of COVID-19.
All companies that applied to be struck off before July 2020 will, therefore, be struck off the register in a phased approach over the next four weeks starting on September 10, 2020.
For those companies that applied to be struck off from July 2020 onwards, the voluntary strike off process will continue as normal after this initial four-week period.
The compulsory strike off process will resume on October 10, 2020.
(Companies House: Companies House resumes voluntary strike off process, 10.09.2020)