Ashurst Governance & Compliance Update – Issue 68

Directors' Duties

1. Company Directors (Duties) Bill published

The Company Directors (Duties) Bill has been published as a Private Members' Bill. The Bill was introduced by Liberal Democrat MP Martin Wrigley and had its first reading in the House of Commons on 21 October 2024 and second on 4 July 2025 (albeit this reading was adjourned to 12 September 2025).

The Bill proposes the amendment of section 172 of the Companies Act 2006 (duty to promote the success of the company) to require directors to balance their duty to promote the success of the company with duties in respect of the environment and the company's employees. In other words, the Bill proposes to put those considerations and interests alongside those of members.

As a Private Members' Bill, it is unlikely to be passed into law and the government has confirmed that it will not be able to support it. Nevertheless, given the fundamental shift in a director's principal duty were it to be enacted, we will continue to follow its progress and provide updates in future editions of AGC.

Corporate Governance

2. QCA publishes new and updated boardroom guides

The Quoted Companies Alliance has published a revised version of its Remuneration Committee Guide and Audit Committee Guide, and a new Nomination Committee Guide. Each of the guides is intended to act as a companion guide to the 2023 version of the QCA Corporate Governance Code. The guides are available to purchase from the Quoted Companies Alliance.

Economic Crime and Corporate Transparency Act

3. ECCTA – A summary of recent developments

Government publishes second ECCTA implementation Progress Report

The Department for Business & Trade has issued its second statutory Progress Report on the implementation of Parts 1 - 3 of the Economic Crime and Corporate Transparency Act 2023. Our overview of the Act can be found here.

The Report notes that, since ECCTA received Royal Assent in October 2023, more than 20 statutory instruments have been passed to permit Companies House to carry out its new functions and duties.

The Report also summarises the action taken by Companies House to promote the integrity and accuracy of the register. To that end, the Report notes that Companies House has used its new powers to bring enforcement action against companies who continue to use PO boxes as their registered office address.

The Report highlights the increased use of financial penalties by Companies House to ensure compliance, an initial focus being on the most serious late filers of confirmation statements.

Finally, the Report reiterates the timetable for implementing certain of the remaining ECCTA reforms, subject to Parliamentary time. These include:

• By Autumn 2025. Identity verification (IDV) of directors, persons with significant control (PSCs) and those filing information at Companies House will become compulsory as part of the incorporation process, as well as for all new directors and PSCs. At the same time, a 12-month transition period will begin to allow existing directors and PSCs to verify their identity as part of the annual confirmation statement filing process.
• By Spring 2026. Those filing documents at Companies House will be required to verify their identity and third party agents filing on behalf of others will be required to register as authorised corporate service providers (ACSPs). 
• By the end of 2026. Companies House will begin compliance activity following the end of the transition period for all individuals required to verify their identity. Enhanced transparency requirements for limited partnerships should also be effective.

Any changes to these timeframes will be reflected in the ECCTA 2023 Transition Plan which was first published by Companies House in October 2024.

Changes to accounts' filings at Companies House announced

Companies House has updated its Guidance: Filing your Companies House accounts to indicate that certain reforms for filing annual accounts introduced by ECCTA will come into force on 1 April 2027. From that date:

• All companies will need to file their accounts with Companies House using commercial software; the existing web and paper routes will be unavailable.
• 'Small' companies will no longer be able to prepare and file abridged accounts. Instead they will need to file annual accounts including a profit and loss account and directors' report, both of which are currently optional.
• When claiming an audit exemption, directors of 'small' companies will be required to make a statement confirming that the company qualifies for the exemption.
• Companies qualifying as 'micro-entities' will be required to file annual accounts, including a profit and loss account, although filing a directors' report will remain optional.

Although not addressed by ECCTA, Companies House has also announced that a company wishing to shorten its accounting reference period more than once in five years will have to provide a business reason for doing so .

These changes will require secondary legislation to be passed. However, there are currently conflicting reports in the business press suggesting that ministers are considering shelving the new filing obligations, which are perceived to be more onerous and inconsistent with the Government's aim of reducing red tape.

Draft regulations concerning statutory registers and other matters published

The draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations have been published, together with an Explanatory Memorandum.

The draft Regulations amend company law to reflect that ECCTA requires companies to report the information in certain statutory registers (including the directors', secretary's, and PSC registers) directly to Companies House rather than maintaining these registers at their registered office.

Other provisions relating to ACSPs and IDV are also introduced by the draft Regulations including, for example, permitting Companies House to confirm that an individual’s identity is verified if unique identifiers and verification statements are provided.

The draft Regulations are expected to be in force later this year at the same time as the provisions prohibiting a director from acting unless their identity has been verified.

Draft regulations applying ECCTA provisions to LLPs published

The draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 have been published.

The draft Regulations apply certain ECCTA provisions to LLPs including by prohibiting a member from acting for an LLP unless their identity has been verified and imposing new rules concerning the delivery of IDV statements for existing LLP members to Companies House.

Under the draft Regulations, LLPs will also be expected to make PSC notifications and provide certain information about their membership to Companies House.

ECCTA provisions abolishing local statutory registers for companies are also modified and extended for LLPs.

The implementation date for the draft Regulations will be confirmed in due course.

Draft Persons with Significant Control (PSC) regulations published

The draft Register of People with Significant Control (Amendment) Regulations have been published, together with an accompanying Explanatory Memorandum.

At present, companies must maintain a local PSC register and update it within 14 days of a change in its PSCs, as well as notifying Companies House within a further 14 days. ECCTA requires the PSC register to be held centrally at Companies House with new enhanced obligations on companies to notify Companies House within 14 days of a change in PSC.

The draft Regulations also make amendments and additions to the PSC regime. In particular, there are more stringent requirements concerning the content of notices to be sent to Companies House. A company will also be required to notify Companies House if it knows that it has no PSC or that certain information previously delivered to Companies House is no longer true.

The implementation date for the draft Regulations will be confirmed in due course.

Regulations extending identity verification to overseas and other companies published

The Companies Authorised to Register, Unregistered Companies and Overseas Companies (Application of Company Law) Regulations 2025 have been published, together with an Explanatory Note.

The Regulations amend secondary legislation to extend IDV requirements and certain other reforms to company law made by ECCTA to overseas companies. An overseas company intending to open a UK establishment will need to confirm that its directors are identity verified before it does so and when it appoints new directors thereafter.

The Regulations also extend similar changes to other entities including unregistered companies and companies authorised to register under the Companies Act 2006 (including single member companies).

The Regulations are expected to come into force when the prohibition on directors acting unless their identities have been verified comes into force later this year.

4. Companies House publishes 2025-26 Business Plan

Companies House has published its Business Plan: 2025-26, which outlines how it intends to progress towards its yet to be published strategic goals for 2025-30 in the next 12 months. Publication of the 2025-30 strategy is expected later in 2025.

Unsurprisingly, Companies House will continue to focus on delivering the company law reforms introduced by ECCTA. Areas of focus in 2025-26 include:

• Identity verification – Companies House will make IDV compulsory for all new directors and PSCs and begin the 12-month transition period for existing directors and PSCs to verify their identity as part of the annual confirmation statement filing.

• ACSPs – Companies House will also, within the same timeframe, make it compulsory for third party agents filing on behalf of companies to register as an ACSP.

• Suppression of personal information – Companies House will enable individuals to protect more personal information from disclosure on the public register by introducing the ability to apply to suppress additional information.

• ROEs – Companies House will provide for certain trust information on the register of overseas entities that is currently restricted from public inspection to be accessed by application

Equity Capital Markets

5. Upper Tribunal upholds FCA decisions in relation to Metro Bank executives

The Upper Tribunal has upheld the Financial Conduct Authority's decisions that the former chief executive and chief financial officer of Metro Bank were knowingly concerned in its breach of the FCA's Listing Rules when it published misleading information to the market. For the detailed background on the case, see AGC Update, Issue 31 – Item 7.

By way of brief reminder, as a listed company Metro provided quarterly financial results to the market. In these, Metro regularly reported on its prudential position, including the Risk Weighted Assets (RWA) on which its regulatory capital requirements were based.

In October 2018, Metro published an unqualified statement of its RWA and the capital ratios based on it. The FCA's case centred on the fact that Metro knew at the time of a material error with the data but did not inform the market. When amended numbers correcting the error were published in January 2019, there was a 39% drop in Metro’s share price.

The FCA fined Metro £10,002,300 for breaching the Listing Rules in December 2022 and judged that the CEO and CFO were aware of the material error and involved in the decision to publish the incorrect information.

In determining the appropriate penalties for the executive directors, the Tribunal decided that mitigating factors ought to reduce the level of FCA's original penalties. To that end, it concluded that fines of £167,325 (reduced from £223,000) and £100,950 (reduced from £134,000) should be imposed on the CEO and CFO respectively.

We are currently analysing the judgment and will provide further updates on lessons for all issuers to learn as appropriate.

6. Changes to Fund-focused Listing Rules confirmed

Following consultation in Quarterly Consultation Paper 47 (CP 25/4) (for more detail, see AGC Update, Issue 63 - Item 13), the FCA has published the UK Listing Rules (Amendment) Instrument 2025 which makes minor amendments to the UK Listing Rules regarding related party transactions by closed-ended investment funds.

The Instrument amends UKLR 11.5 by inserting a requirement for companies to exclude the related party and its associates from voting on the shareholder resolution on the transaction; this requirement was unintentionally omitted when the revised UKLRs were implemented in July 2024. The Instrument also makes a related amendment to UKLR 11.6 to remove wording that is no longer relevant.

The Instrument came into force on 27 June 2025.

UK's Foreign Influence Registration Scheme

7. The UK's Foreign Influence Registration Scheme: Overview and Compliance Considerations

The National Security Act 2023 introduced a comprehensive overhaul of UK's national security framework. A key component of the Act is the two-tier Foreign Influence Registration Scheme (FIRS), which was launched on 1 July 2025 and aims to provide greater transparency around foreign influence in UK politics.

FIRS will require any person to register with the Home Office if they undertake:

• political influence activity in the UK at the direction of any foreign power; or

• any activity—including commercial activity—at the direction of a specified foreign power. At launch, numerous Russian and Iranian government bodies have been designated as specified foreign powers.

Entities that might engage in any activities at the direction of a foreign power should assess their obligations under FIRS and consider implementing compliance processes to ensure that potentially in-scope activities are identified and registered in a timely manner in accordance with the Act. Our Disputes Resolution team provide more information in this article including setting out the tight registration deadlines and practical tips on the development of an appropriate compliance programme.

Industrial Strategy

8. DBT issues Industrial Strategy policy paper

The Department for Business and Trade has published a policy paper containing its UK Modern Industrial Strategy setting out a ten-year plan to increase business investment in eight high-growth sectors: advanced manufacturing, creative industries, life sciences, clean energy, digital and technologies, professional and business services, financial services and defence.

The policy paper also sets out the Government's implementation strategies, including:

• A proposed consultation on updating the definitions of the 17 sectors subject to mandatory notification under the National Security and Investment Act 2021 and notice of an upcoming announcement on new exemptions to the mandatory notification regime.

• A commitment to prioritise regulatory reform to ensure company law and national security processes support the competitiveness of the eight high-growth sectors mentioned above.

• Committing to publishing consultations on simplifying non-financial reporting requirements under the Companies Act 2006. The summary of responses to the previous government's call for evidence on the issue can be found here.

• A further commitment to introduce a corporate re-domiciliation regime to simplify the process for foreign companies moving to the UK. To read our summary of the UK Independent Expert Panel review on the subject, see AGC Update, Issue 57 – Item 9.

• Augmenting the Payment Practices Reporting regime, including by requiring in-scope businesses to include information on the subject in their annual reports.

Sustainability

9. UK Government consults on adopting ISSB sustainability reporting standards and mandating Transition Plans

The UK Government has published a package of three consultations as the first step in developing a UK sustainability reporting framework including consultations on:

• Adopting the International Sustainability Standards Board sustainability reporting standards (IFRS S1 and S2) to create UK Sustainability Reporting Standards (UK SRS).

• Mandating development and disclosure of Transition Plans (TPs).

• An oversight regime for assurance of sustainability-related financial disclosures.

The consultation on the UK SRS proposes only minimal amendments to IFRS SRS S1 and S2 to adapt them for use in a UK context. Following endorsement of the UK SRS, which is anticipated to be Autumn 2025, the Government and FCA will each consult on requiring disclosure against the UK SRS by large companies and LLPs as well as listed companies. It is therefore still not clear from the consultation which entities will be covered by those requirements.

The consultation on TPs sets out two main disclosure options that would either require in-scope entities to explain why they have not disclosed a TP or TP-related information ('comply and explain' disclosures), or mandate development, disclosure and possibly implementation of a TP as part of a company's annual reporting.

There will be further consultations on a package of proposals. Again, the consultation does not address precisely which entities are intended to be in scope but economically significant companies (e.g. FTSE 100) and financial institutions (including pension funds) are likely to be included.

For more detail, see our full client alert: UK Government consults on adopting ISSB sustainability reporting standards and mandating Transition Plans to develop a sustainability reporting framework.

10. IFRS Foundation publishes guidance on transition plan disclosures

The IFRS Foundation has published guidance to support disclosures under IFRS S2 by an organisation on its transition to a low carbon economy, including information about Transition Plans (for more information on IFRS S2, see Disclosures required under the IFRS's Sustainability Disclosure Standards (ISSB S1 and S2)).

IFRS S2 does not require organisations to have or publish a TP, but it requires them to provide material information about their climate-related transition. The guidance helps organisations determine what information is relevant to disclose regarding their strategy and goals related to their climate-related transition, including actions to mitigate and adapt to climate change. The guidance does not add to or change the requirements in IFRS S2.

The IFRS guidance derives from the Transition Plan Taskforce guidance on disclosure of TPs, for which the IFRS Foundation is now responsible for (see Transition Plan Taskforce publishes final report on next steps for Transition Plans).

Other authors: Shan Shori, Expertise Counsel; Becky Clissmann, Sustainability Counsel; Marianna Kennedy, Senior Associate.

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