Legal development

Ashurst Governance & Compliance Update - Issue 40



    1. FCA amends DTRs and publishes new guidance on structured digital reporting of financial statements 

    The Financial Conduct Authority (FCA) has published Handbook Notice 111, which summarises feedback the FCA has received on proposals in Consultation Paper 23/2 (CP 23/2) to simplify Handbook rules that require in-scope listed companies to publish their annual financial reports in a structured digital reporting format.

    The final rules came into effect on 28 July 2023 and apply to financial years starting on or after 1 January 2022. The FCA has also published new guidance on taxonomies (Primary Market Technical Note: Structured digital reporting).

    In CP 23/2, the FCA proposed streamlining the arrangement of its existing rules by relocating substantive requirements set out in an onshored Technical Standard directly into DTR 4.1, as well as removing unnecessary provisions and making minor amendments and clarifications. CP 23/2 also proposed adding a new rule to the DTRs requiring issuers to tag their annual financial statements using a 'generally accepted taxonomy’ for annual corporate reporting in UK regulated markets, replacing the list of ‘permitted taxonomies’ in the Technical Standard. 

    Having considered feedback from stakeholders, the FCA has amended the DTRs broadly in line with the proposals set out in CP 23/2 through the Disclosure Guidance and Transparency Rules Sourcebook (Electronic Reporting Format) Instrument 2023.

    The FCA's Webpage: Company annual financial reporting in electronic format has been updated to reflect these changes.

    2. Register of overseas entities: updated guidance on registration and verification

    The Department for Business & Trade has published updated guidance for the registration of entities on the register of overseas entities.

    The updated guidance reflects changes on identifying foreign limited partners as beneficial owners and includes changes to rectification, dispositions, financial penalties and protected information. It provides further information on:

    • Identifying foreign limited partners as beneficial owners.
    • Removing inaccurate information from the register.
    • The registration of otherwise prohibited land transactions.
    • The imposition of financial penalties.
    • Protecting information relating to an individual.
    • Disclosing protected information to public authorities.

    ESG and Sustainability

    3. ISSB consults on proposed digital taxonomy to improve global accessibility and comparability of sustainability information 

    The International Sustainability Standards Board (ISSB) has published a consultation on its proposed Sustainability Disclosure Taxonomy (SDT). The SDT is intended as a global baseline for tagging sustainability-related financial disclosures and reflects the disclosure requirements in the ISSB’s first two standards - IFRS S1 and IFRS S2, which were published in June 2023 (see ISSB publishes first standards on sustainability and climate disclosures ( The ISSB has been working on the SDT in tandem with the development of IFRS S1 and IFRS S2.

    A common digital taxonomy will facilitate digital reporting of sustainability-related financial information prepared, applying the ISSB Standards. This will improve the accessibility and comparability of that information for investors globally.

    The SDT will play the same role as the IFRS Accounting Taxonomy, in enabling digital tagging of information required by the IFRS Standards. These taxonomies are different to taxonomies developed by jurisdictions to classify economic activities as environmentally sustainable.

    The consultation is open for feedback until 26 September 2023. The ISSB will review feedback on the proposals in the second half of 2023 and aims to issue the final digital taxonomy early in 2024. The ISSB is exploring with stakeholders ways the SDT could be used to enhance interoperability with other sustainability-related requirements.

    4. First set of EU Sustainability Reporting Standards (ESRS) adopted by European Commission

    The European Commission has adopted a Delegated Regulation and two accompanying Annexes setting out the first EU Sustainability Reporting Standards (ESRS). The ESRS will apply to companies subject to the Corporate Sustainability Reporting Directive 2022 ((EU) 2022/2464) (CSRD) (see The Corporate Sustainability Reporting Directive - An overview ( The CSRD amended the Accounting Directive (2013/34/EU) to introduce requirements for in-scope companies to report against the ESRS and required the ESRS to be adopted by June 2023.

    Annex I contains:

    • 2 cross-cutting ESRS on general requirements and general disclosures. The first ESRS covers general requirements that should be applied by all companies reporting under the ESRS to explain double materiality, the value chain, and how to prepare and present sustainability information. The second ESRS covers general disclosures on governance, strategy, impact, risk and opportunity management, and metrics & targets, which apply irrespective of which sustainability matter is being considered.
    • 5 environmental ESRS on climate change, pollution, water and marine resources, biodiversity and ecosystems, and resources and the circular economy.
    • 4 ESRS on social disclosures including an organisation's workforce, workers in the value chain, affected communities, customers and end-users.
    • An ESRS on governance.

    Annex II contains the list of acronyms and glossary of definitions to be used for the ESRS.

    Adoption of the Delegated Regulation follows a June 2023 consultation on the draft Delegated Regulation, which was developed by EFRAG (formerly the European Financial Reporting Advisory Group). The Commission modified EFRAG's draft ESRS by phasing-in some of the reporting requirements, allowing more flexibility for companies to decide the information that is material to their circumstances and making some requirements voluntary.

    The European Parliament and the Council will formally scrutinise the Delegated Regulation for two months from the second half of August. They can extend the scrutiny by a further two months. They may reject the Delegated Regulation, but they cannot amend it. Under the CSRD, the Commission must adopt, by June 2024, sector-specific standards, proportionate standards for listed SMEs and standards for non-EU companies. EFRAG is working on the second set of sector-specific draft ESRSs.

    The EU and the International Sustainability Standards Board (ISSB) have been working together to avoid duplicatory requirements between the ESRS and the IFRS Sustainability Disclosure Standards: IFRS S1 and IFRS S2. In particular, ISSB has:

    • Formed a Jurisdictional Working Group (JWG) to discuss the interoperability of these and other standards and the EU Commission and EFRAG are both members.
    • Added a requirement to S1 to permit (but not require) entities to consider the ESRS when identifying information to provide about sustainability-related risk and opportunities.

    5. International Auditing and Assurance Standards Board consults on draft International Standard on Sustainability Assurance Engagements

    The International Auditing and Assurance Standards Board (IAASB) has published an exposure draft of its proposed International Standard on Sustainability Assurance 5000, General Requirements for Sustainability Assurance Engagements (ED-5000). The consultation on the exposure draft closes on 1 December 2023.

    ED-5000 aims to enhance the confidence investors, regulators and other stakeholders have in sustainability information. It will be applied by both accounting and non-accounting assurance practitioners in undertaking an assurance of any sustainability information prepared by any company under any suitable framework, including the IFRS Sustainability Disclosure Standards: IFRS S1 and IFRS S2 (see ISSB publishes first standards on sustainability and climate disclosures (

    The proposed standard:

    • Addresses the entirety of a sustainability assurance engagement, from acceptance or continuance to reporting.
    • Is a stand-alone standard. This means it does not have to be applied with any other IAASB auditing or assurance standards, although assurance practitioners must comply with relevant ethical requirements. ED-5000 also proposes conforming andconsequential amendments to other IAASB standards.
    • Applies to reporting on all sustainability topics (e.g climate, labour practices and economic impacts) and aspects of topics (e.g. governance, risks and opportunities, metrics and KPIs).
    • Applies to both reasonable and limited assurance engagements. A limited assurance engagement provides less confidence than a reasonable assurance engagement.
    • Describes how an assurance practitioner evaluates the suitability of the criteria used by the company to prepare the sustainability information.
    • Recognises the risk of misstatement of sustainability information due to fraud (including greenwashing). To address this, the standard sets various requirements including designing and performing procedures sufficient to identify disclosures where material misstatements due to fraud or error are likely to arise.

    The requirements for practitioners conducting sustainability assurance engagements are still evolving. Jurisdictions will each decide whether to require assurance engagements on sustainability information and whether they must comply with ED-5000.

    6. UK Sustainability Disclosure Standards (SDS) 

    The Department for Business and Trade (DBT) has published guidance on the government's framework to assess the suitability of the IFRS Sustainability Disclosure Standards S1 and S2 and create UK Sustainability Disclosure Standards (UK SDS). 

    Any future requirements in UK legislation or regulation for companies to report on risks and opportunities relating to sustainability matters, including those arising from climate change will be based on the UK SDS. Pursuant to the framework, the Secretary of State for Business and Trade will consider endorsing S1 and S2 by July 2024. If endorsed, the UK standards will only divert from the global baseline if absolutely necessary for UK specific matters.

    The UK government has established two committees to assist with assessing and endorsing S1 and S2, and implementing the resulting UK SDS:

    • The UK Sustainability Disclosure Technical Advisory Committee (TAC). TAC, supported by the Financial Reporting Council (FRC), will assess S1 and S2 from a technical perspective and make recommendations to the Business and Trade Secretary. The membership of TCA is currently being decided and will be announced soon. In AGC Update, Issue 39, we reported that, in July 2023, the FRC issued a call for evidence to inform the proposed endorsement of S1 and S2 in the UK.
    • The UK Sustainability Disclosure Policy and Implementation Committee (PIC), which is managed by DBT. PIC will provide advice on an endorsement decision to the Business and Trade Secretary, based on the recommendations from TAC and its own work. Its membership comprises UK government departments and regulators including the FCA and FRC.

    The FCA also intends to update its reporting requirements for listed companies in line with the S1 and S2 once they are endorsed for use in the UK. It aims to consult on its proposals in the first half of 2024 and finalise its policy position by the end of 2024 with a view to the new requirements applying for accounting periods beginning on or after 1 January 2025 (see the FCA's Primary Market Bulletin 45).

    Equity capital markets

    7. Dividends: LSE publishes 2024 Dividend Procedure Timetable – 31 July 2023

    The London Stock Exchange has published its 2024 Dividend Procedure Timetable

    The Dividend Procedure Timetable is published on an annual basis as a guide for companies with shares listed on the Official List or admitted to trading on AIM on setting their interim and final dividend programmes.

    The latest Dividend Procedure Timetable sets out a series of ex-dividend dates for 2024, its associated record date and the corresponding latest announcement date.


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    Authors: Will Chalk, Partner; Rob Hanley, Partner; Becky Clissman, Counsel

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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