Ashurst Governance & Compliance Update – Issue 78

Narrative and Financial Reporting

1. FRC updates its Strategic Report guidance

The Financial Reporting Council has published an updated edition of its guidance to assist companies meeting their disclosure obligations in their strategic report. The guidance is intended to support reporting teams in delivering disclosures that are proportionate to an entity's size, complexity and circumstances.

The guidance has been amended to reflect changes to legislative and regulatory requirements, including the recent revision of the UK Corporate Governance Code 2024, legislative changes to directors’ report disclosures, and other developments in sustainability-related and wider corporate reporting practice. Changes have also been made to deliver improvements to the structure and accessibility of the guidance to improve usability and functionality for preparers – for example, mandatory reporting requirements are clearly indicated and distinguished from guidance on better reporting practice. The FRC's 'Principles of Communication' have also been revised.

Alongside the guidance, the FRC has published updated Scoping Tables to support entities complying with Companies Act 2006 disclosure requirements for the strategic report, the directors’ report and the energy and carbon report to reflect reporting of payment practices within the Directors Report (see AGC Update, Issue 69 – Item 1).

Economic Crime and Corporate Transparency

2. Option for companies to hold register of members at Companies House removed

The government has published commencement regulations that bring into force certain provisions of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). In particular, the regulations bring into force section 49 of ECCTA, which removes the option for private companies to keep information about their members on the central register at Companies House. All companies must now maintain and update their own register of members. There are transitional provisions for companies that had previously elected to use the central register to hold their register of members.

3. Identity verification requirement for individuals filing at Companies House deferred

Companies House has confirmed in its revised ECCTA transition plan that the requirement for individuals filing documents at Companies House to have had their identity verified has been postponed from the planned implementation in Spring 2026 until November 2026 at the earliest. This will enable Companies House to prioritise the completion of the identity verification transition period for directors and persons with significant control (PSC) and to evaluate feedback.

By way of reminder, with effect from 18 November 2025, company directors, LLP members and PSCs of companies or LLPs must comply with the identity verification provisions introduced by ECCTA (see AGC Update, Issue 70 – Item 1 for further information).

4. Mandatory software filing of company accounts and other accounts changes deferred

Companies House has updated its guidance on filing accounts to indicate that mandatory software filing of accounts and other changes introduced by ECCTA, including removing the option for 'small' companies to file abridged accounts that were expected to be in force from 1 April 2027, remain 'under review'. If and when brought forward, companies will be given at least 21 months' notice to prepare for any changes.

5. New guidance issued on replacing incorrect dates of birth in Companies House records

Companies House has published new guidance on how to replace an incorrect date of birth for a director or person with significant control (PSC) previously notified to the registrar of companies.

In short, a replacement for the original filing that contained the wrong date of birth will need to be submitted, the procedure for which will vary according to whether the director or PSC concerned was added on incorporation or after the company was registered.

Corporate Governance

6. FRC publishes 'mythbuster' on Provision 29 UK Corporate Governance Code 2024

By way of reminder, the revised 2024 UK Corporate Governance Code applies to financial periods beginning on or after 1 January 2026 with the exception of revised Provision 29, which applies to financial periods beginning a year later. Our overview of the 2024 Code can be found here and our Governance & Compliance podcast, which focuses on Provision 29, here.

Provision 29 was enhanced in the 2024 Code to require a formal board declaration on the effectiveness of a company's material controls. Its later application is designed to provide relevant companies with the time to prepare.

The FRC's mythbuster addresses questions on various aspects of reporting under Provision 29, including the number of material controls a company is expected to have in place; whether material controls and testing needs to be stated in reporting; how long the report should be; whether companies should report on a material control failure that has been rectified by the balance sheet date; and whether boards must seek external assurance over their testing.

The FRC emphasises that it does not require early adoption of the revised Provision 29 in relation to accounting periods that began before 1 January 2026.

Equity Capital Markets

7. New Public Offers and Admissions to Trading Regime: implementation and consequential changes

The POAT regime – a reminder

A reminder that the Public Offers and Admissions to Trading (POAT) Regulations 2024 came fully into force on 19 January 2026 with the revocation of the UK Prospectus Regulation.

This is a landmark moment for UK capital markets, and the culmination of an extensive and detailed consultation process, driven by a commitment to enhance the attractiveness and efficiency of UK capital markets.

The new Financial Conduct Authority (FCA) Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRMs), which replace the FCA's Prospectus Regulation Rules sourcebook, were implemented on the same date, together with amendments to the FCA's Market Conduct sourcebook and the UK Listing Rules (UKLRs).

The FCA has published new and updated forms and checklists to reflect the implementation of the new regime.

For background on: (i) the UKLR amendments, including the removal of the further issuance listing application process from the UKLRs, see 'Further FCA proposals for the new Public Offers and Admissions to Trading Regulations regime'; and (ii) the POAT regime, see 'New FCA Prospectus Rules: the last piece of the puzzle' and AGC Update, Issue 69 – Item 3.

By way of reminder, the FCA has published updated guidance in its Knowledge Base to reflect the POAT regime, including four new technical notes. See AGC Update, Issue 77 - Item 5 for further information.

Admission and Disclosure Standards

The London Stock Exchange has published Market Notice N01/26 setting out administrative changes to its Admission and Disclosure Standards to reflect the implementation of the POAT regime. The Notice clarifies that, whilst the FCA will now admit securities as a class to the Official List, there will be no changes to the requirements in the Standards for applications for the admission to trading of securities. Therefore, applications for admission to trading of further issues of a class of securities already admitted to trading will still need to be made to the Exchange, though no corresponding application will be required to admit securities to the Official List.

AIM Rules for Companies

The Exchange has published AIM Notice 61 setting out revisions to its AIM Rules for Companies to reflect the coming into force of the POAT regime. The Exchange expects to implement additional substantive changes to its AIM Rules in H1 2026.

Our update on the Exchange's Discussion Paper Feedback Statement which focuses on those further and more fundamental changes to the AIM Rules can be found here. Our overview of the main implications of the new POAT regime for AIM companies is here.

8. FTSE Russell consultation on free float alignment of UK and non-UK incorporated companies in FTSE UK Index Series

FTSE Russell is consulting on reducing the free float requirement within the FTSE UK Index Series from 25% to 10% for non-UK incorporated companies. The move would eliminate the distinction between local and non-locally incorporated companies in relation to the minimum free float requirement. A 10% minimum free float would also correspond with the UKLR requirement. By way of reminder, only shares listed on the Equity Shares (Commercial Companies) or Closed-ended Investment Funds categories of the Official List are eligible for inclusion in the FTSE UK Index Series.

The proposal follows the changes to the FTSE UK Index Series methodology which were implemented in September 2025, including in respect of the Sterling denominated price requirement (see AGC Update, Issue 63 – Item 14), and represents another step in an ongoing reform programme to enhance London's global listing competitiveness.

The consultation closes on 26 February 2026.

9. London Stock Exchange confirms rules for Private Securities Market

The Exchange has published its Private Securities Market Rules and Private Securities Market Handbook for its new Private Securities Market (PSM) - a Private Intermittent Securities and Capital Exchange System (PISCES) established under the PISCES Regulations. PISCES is a new type of regulated trading platform that allows private companies to trade their securities in a controlled environment and on an intermittent basis.

As a reminder, the FCA approved the Exchange as the first operator of a PISCES platform in August 2025. The Exchange will operate the PSM as a recognised investment exchange, leveraging its existing trading infrastructure to enable private companies to facilitate trading of their securities at intervals through an auction facility. Whilst active trading on the PSM has not yet commenced, it is expected imminently. The Exchange's existing rule books – the Rules of the London Stock Exchange and the Admission and Disclosure Standards – have already been updated to reflect the launch of the PSM, with the revised versions becoming effective in September 2025 (see AGC Update, Issue 71 – Item 1).

Further information on PISCES can be found in our snapshot, client update and podcast.

Audit and Corporate Governance Reform

10. Plans for Audit Reform and Corporate Governance Bill consultation withdrawn

By way of further update (see AGC Update, Issue 77 – Item 9), the Department of Business and Trade has confirmed that it will not be consulting on the proposed Audit Reform and Corporate Governance Bill, outlined in the 2024 King’s Speech (see AGC Update, Issue 54 – Item 1).

The letter notes that the simplification and modernisation of corporate reporting is to be given priority and that the need for major reform in this area is considered less pressing than it was. However, the letter does emphasise the importance of effective, proportionate regulation of audit and a regulator that has the right legislative set-up to do the job, stating that the government will still look to put the Financial Reporting Council on a statutory footing as soon as Parliamentary time allows.

Regulation in Practice

11. FCA publishes new Enforcement Watch newsletter

The FCA has published the first edition of a new newsletter: Enforcement Watch 1. The purpose of the publication is to provide insights and highlight themes from its enforcement work and follows through on a commitment to do so when it published its controversial revised enforcement policy (see AGC Update, Issue 67 – Item 2). Much of the letter focuses on regulated entities. Nevertheless, the FCA states that it has confirmed three investigations into listed issuers following announcements by the companies in question.

Relatedly, the FCA has fined an individual, Mr Russel Gerrity, £309,843 for trading whilst in possession of inside information which he became party to whilst acting as a consultant to publicly traded oil and gas companies.

Stewardship

12. Latest signatories announced ahead of transition to UK Stewardship Code 2026

The FRC has confirmed the final round of successful signatories to the UK Stewardship Code 2020. The Code now has 291 signatories representing £57.3 trillion assets under management, including 197 asset managers, 75 asset owners and 19 service providers. These signatories are the last to report under the 2020 Code ahead of the transition to the UK Stewardship Code 2026.

The 2026 Stewardship Code came into effect on 1 January 2026, with this year designated as a 'transition year' for its implementation. Existing signatories that submit a renewal application during 2026 will remain on the signatory list throughout the transition period, reflecting their status under the 2020 Code, while new applicants not included on this final 2020 signatory list will be able to apply to become signatories for the first time under the updated framework. For our overview of the 2026 Stewardship Code, see AGC Update, Issue 67 – Item 1.

For further information can be found in the UK Stewardship Code 2026 FAQs.

Sustainability

13. FCA consults on sustainability disclosures and UK Government publishes response on sustainability assurance regime

The FCA has published a consultation on aligning listed issuers’ sustainability disclosures with the UK Sustainability Reporting Standards (UK SRS), which it is anticipated will soon be endorsed by the UK Government.

The FCA consultation proposes that making climate disclosures using UK SRS S2 will be mandatory for accounting periods beginning on or after 1 January 2027 although companies can continue to make Scope 3 emissions disclosures on a 'comply or explain' basis. Wider sustainability (non-climate) disclosures using UK SRS 1 can also be made on a 'comply or explain' basis. Transitional reliefs will apply to delay mandatory Scope 3 and non-climate disclosures by a year and two years respectively.

The FCA is not proposing to set Transition Plan (TP) requirements for listed companies beyond the requirements in S2. Nevertheless, the existing guidance on taking account of the TCFD Guidance will be replaced with a requirement to make a 'comply or explain' disclosure regarding the existence of a TP.

In a related development, the UK Government has published a response to its June 2025 consultation on developing a sustainability assurance oversight regime. The response confirms that the government will introduce legislation to take forward its proposals when Parliamentary time allows; in the meantime the FRC has been asked to establish an interim voluntary register for sustainability assurance practitioners by mid-2026.

Our detailed overview of all these proposals can be found here.

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