Ashurst Governance & Compliance Update – Issue 79

Narrative and Financial Reporting

1. FRC publishes amendments to FRC 102

The FRC has published its amendments to FRS 102, which is the Financial Reporting Standard applicable in the UK and Republic of Ireland.

By way of reminder, FRS 102 requires all entities to follow the presentation requirements for the balance sheet and the profit and loss account set out in UK company law or Republic of Ireland company law as applicable.

Entities may choose to adapt the detailed formats of the profit and loss account, and FRS 102 sets out the requirements that must be followed when the adapted format option is applied. These requirements are based on the International Accounting Standards Board’s (IASB) International Financial Reporting Standards (IFRS) for SMEs Accounting Standard, in particular IAS 1 (Presentation of Financial Statements).

Changes have been made to:

• the presentation requirements for entities choosing to apply the adapted format of the balance sheet and/or one of the profit and loss account formats; and
• the definitions of current asset, non-current asset and current liability, and include guidance on applying these updated definitions. The FRC has also incorporated elements of the guidance from IAS 1/IFRS 18 on the classification of liabilities as current or non-current, following feedback to its July 2025 consultation on the changes.

Minor amendments to FRS 105 – the standard applicable to micro-entities - have also been published.

The amendments to FRS 102 and FRS 105 apply for accounting periods beginning on or after 1 January 2027.

Economic Crime and Corporate Transparency

2. Law Society publishes guidance for solicitors on identity verification

Legal advisers often file documents at Companies House on behalf of their clients. Following the introduction of mandatory identity verification (IDV) for directors, LLP members and PSCs on 18 November 2025 (see AGC Update, Issue 73 – Item 1), certain documents that need to be filed at Companies House include, or will include a statement confirming that the identity of a relevant director, LLP member or PSC has been verified.

However, under the Companies Act 2006, a person who, without reasonable excuse, delivers a document or makes a statement to Companies House that is materially misleading, false or deceptive commits an offence that is punishable by a fine (the 'basic offence'). If the person making the statement is a firm, every officer of the firm who is in default also commits the offence. The reference to 'reasonable excuse' means that the offence is unlikely to be engaged where information provided by someone else is reasonably relied on but turns out to be untrue or when a professional makes an honest mistake when assisting a company.

Legal advisers filing documents on behalf of clients at Companies House that include a statement that an individual's identity has been verified will wish to avoid engaging the basic offence. To that end, the Law Society has published guidance which identifies practical steps which should help legal advisers. For individuals who have successfully had their identity verified, this includes checking their personal codes. Where an individual's identity verification is yet to be registered at Companies House, the guidance suggests checking other supporting evidence, such as a copy of the individual's personal code confirmation page or the relevant Companies House email. Where external evidence cannot be provided, legal advisers may consider asking questions to make sure they understand why and reach a conclusion based on the circumstances.

Adopting these practical steps should assist in establishing that a legal adviser acted reasonably if an identity verification confirmation in a document is subsequently found to be false, misleading or deceptive.

Equity Capital Markets / Market Abuse

3. FCA issues statement on notifications relating to admissions to trading and recent changes to the UK Listing Rules

The Financial Conduct Authority has issued a statement clarifying its notification requirements for admissions to trading of additional securities under its Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRMs). By way of reminder, the PRMs together with certain amendments to the FCA's listing processes in the UK Listing Rules (UKLRs), came into effect on 19 January 2026.

The PRMs introduce a new requirement for issuers to notify a Regulatory Information Service of any admission to trading of additional securities within 60 days of the admission (under PRM 1.6.4R). This 60-day notification window was primarily intended to accommodate issuers that make frequent issuances, including under share option schemes.

Since the implementation of the PRM notification requirement, the FCA has been made aware of potentially overlapping requirements in UKLR 6.4.4R(4) (and equivalent provisions in other UKLR chapters) which require listed companies to notify a RIS as soon as possible of the results of any new issue of equity securities or any public offer of existing equity securities. The FCA notes that this has caused uncertainty for some issuers. Previously, an exemption to this notification obligation applied to block listings. However, following the deletion of the block listing provisions in UKLR 20.6 which formed part of the FCA's revisions to its listing processes, the exemption for block listings has been removed.

In its statement, the FCA has confirmed that it was not its policy intention that issuers who regularly issue new listed shares, and who were previously required to notify only every six months under a block listing, should now be required to notify a RIS as soon as possible for each individual issue and again on admission to trading.

In line with this, the FCA aims to consult shortly on removing UKLR 6.4.4R(4) and equivalent provisions. Issuers would therefore only need to comply with the 60-day notification requirement in PRM 1.6.4R for admissions to trading. Pending the consultation – anticipated to be addressed in the FCA's March Quarterly Consultation Paper - and any further announcement, the FCA will not take supervisory or enforcement action where issuers previously granted a block listing under former UKLR 20.6 do not make notifications pursuant to UKLR 6.4.4R(4), despite the rules currently remaining in force. However, this forbearance is limited to new issues or public offerings of securities covered by a former block listing that had not been issued or offered before the revocation of UKLR 20.6 on 19 January 2026, and where the securities are used for the same purposes as the original block listing.

4. FCA Handbook: Changes to share buyback reporting requirements published

The FCA has published Handbook Notice No. 138 which sets out changes to the FCA Handbook and other material made by the Board of the FCA in January and February 2026. These include amendments to the share buyback reporting obligation under UKLR 9.6.6R which applies to issuers with shares listed in the Equity Shares (Commercial Companies) category of the Official List.

Following the FCA's Quarterly Consultation Paper No. 49 (see AGC Update, Issue 71 - Item 4), the deadline in UKLR 9.6.6R to notify post-trade information on share buyback transactions to the market has been extended. As a result, listed companies are no longer required to notify as soon as possible with a 'next business day' backstop, but instead must notify no later than the end of the 7th daily market session following the date of execution of the purchase. This revision therefore aligns UKLR 9.6.6R with the timing in Article 2(3) of the Buyback and Stabilisation Regulation, which requires an issuer to publicly disclose information on the share purchases under a buyback programme where it chooses to rely on the safe harbour in Article 5 of the UK Market Abuse Regulation (UK MAR). The new notification deadline applies to all purchases in scope of UKLR 9.6.6R; it is not limited to those made pursuant to a share buyback programme or where the issuer relies on the UK MAR safe harbour.

The FCA has not revised the content of the UKLR 9.6.6R market notification or introduced a definition of ‘daily market sessions’ though it states that it may consider this in the future.

The changes came into effect on 27 February 2026.

5. PISCES – first auction announced

The first transaction under the FCA’s Private Intermittent Securities and Capital Exchange System (PISCES) framework is being launched on the LSE's Private Securities Market (PSM). By way of reminder, PISCES is a platform where shares in private companies can be traded on an intermittent basis, leveraging the infrastructure of public markets. The LSE was the first operator to be granted a PISCES Approval Notice by the FCA for its PSM.

The PISCES auction, which is due to take place later this month, will be made via a TPEIC – a Tradable Private Equity Investment Company. The TPEIC will hold shares in Oxford Science Enterprises, valued at £1.3 billion, as its sole underlying asset. The TPEIC is designed to facilitate structured secondary liquidity through permissioned auctions on the PSM.

For further information on PISCES, see our snapshot, client update and podcast.

6. FCA fines two individuals for breaches of UK MAR

The FCA has issued final notices to two individuals, imposing combined fines of £108,731, for purchasing shares in Bidstack Group plc while in possession of, and using, inside information in breach of Article 14 of the UK Market Abuse Regulation (UK MAR).

Mr Hirani was the interim chief financial officer of Bidstack. Whilst he was not on the board, he had full access to the group's financial information as well as inside information about a major upcoming corporate transaction.

Prior to the announcement of the transaction, Mr Hirani is believed to have passed this inside information to Mr Kerai. He then opened a trading account in Mr Kerai's name and, with Mr Kerai's assistance, bought 1.3 million shares in Bidstack. Once the deal had been made public, Bidstack's share price rose by more than 125%, generating a potential profit of £28,075. The majority of the shares were then sold, generating a profit of more than £9,000.

The FCA imposed a financial penalty of £56,000 on Mr Hirani considering that he had:

• engaged in insider dealing in breach of Article 14(a) UK MAR through purchasing shares in Bidstack while in possession of, and using, inside information; and
• unlawfully disclosed inside information to Mr Kerai in relation to the transaction in breach of Article 14(c) UK MAR.

The FCA also considered Mr Kerai's conduct amounted to insider dealing in breach of Article 14(a) UK MAR and imposed a financial penalty of £52,731.

Both fines were discounted by 30%, reflecting early agreed settlement.

7. FCA fines former Carillion CEO for market abuse

The FCA has published a final notice in relation to Richard Howson, the former CEO of Carillion plc, for breaches of Article 15 of MAR, and former Listing Rule 1.3.3R, Listing Principle 1 and Premium Listing Principle 2. By way of reminder, the FCA had already published final notices in relation to the market abuse of Carillion plc (in liquidation) and two of its former CFO's Richard Adam and Zafar Khan (see AGC Update, Issue 77 – Item 8).

Ultimately, the FCA imposed a financial penalty of £237,700 on Mr Howson for being, in the period 1 July 2016 to 10 July 2017, knowingly concerned in breaches by Carillion of:

• Article 15 of MAR (prohibition of market manipulation) by disseminating information that gave false or misleading signals as to the value of its shares in circumstances where it ought to have known that the information was false or misleading;
• Listing Rule 1.3.3R (misleading information must not be published) by failing to take reasonable care to ensure that its announcements were not misleading, false or deceptive and did not omit anything likely to affect the import of the information;
• Listing Principle 1 (procedures, systems and controls) by failing to take reasonable steps to establish and maintain adequate procedures, systems and controls to enable it to comply with its obligations under the Listing Rules; and
• Premium Listing Principle 2 (acting with integrity) by failing to act with integrity towards its holders and potential holders of its premium listed shares.

The FCA's decision as regards the Metro Bank plc executives (see AGC Update, Issue 68 – Item 5) provides the greatest insight into when an individual is 'knowingly concerned' in a breach of the FCA Handbook. Specifically, to be ‘knowingly concerned’ in a breach:

• a person must have been actually involved in the contravention; merely passive knowledge is not sufficient;
• a person must have had knowledge of the facts on which the contravention depends; and
• it is immaterial whether (s)he had knowledge of the law, unless:
  • (s)he had received and was relying on independent legal advice that the activity concerned was not in contravention of the law; and
  • that advice was based on a correct and complete factual matrix

8. ESMA consults on amendments to MAR delayed disclosure guidelines

ESMA has published a consultation paper proposing amendments to its guidelines on the delay in the disclosure of inside information under the EU Market Abuse Regulation (EU MAR).

The amendments are designed to align the guidelines with changes to the disclosure regime as implemented by the EU Listing Act, which amends EU MAR (among other regulations) to simplify the listing requirements by reducing the administrative burden on listed companies.

Specifically, the EU Listing Act amends EU MAR by providing that, from 5 June 2026, protracted processes are no longer subject to the obligation to disclose inside information until completion. It also replaces the requirement that the delay should not mislead the public, with the requirement that the information the issuer intends to delay should not be in contrast with its latest announcement on the same matter. The consultation seeks to align the ESMA's guidance with those changes.

The consultation closes on 29 April 2026. ESMA expects to publish a final report containing a summary of the consultation response and a final version of the guidelines in Q4 2026. It is not known whether the FCA will endorse the revised guidance.

Diversity, Equity and Inclusion

9. FTSE Women Leaders publishes latest diversity review

The FTSE Women Leaders Review has published its annual report on gender balance on boards and in leadership positions in the FTSE 350 and 50 of the UK's largest private companies.

The report assesses progress made against recommendations (see below) on the representation of women on boards and in senior leadership roles which built on the work of the Hampton-Alexander and Davies Reviews. The report includes a review of the position at the end of the current five-year cycle.

The four key recommendations of the FTSE Women Leaders review are:

• A minimum target for FTSE 350 Boards and Leadership teams of 40% women’s representation by the end of 2025.
• At least one woman in any of the following roles: Chair, Senior Independent Director, Chief Executive Officer or Finance Director by the end of 2025.
• Key stakeholders should set best-practice guidelines or use alternative mechanisms to encourage any FTSE 350 Board that has not yet achieved the previous 33% target for the end of 2020, to do so.
• The scope of the Review includes 50 of the UK’s largest private companies.

The 2026 report provides the following insights:

• Women on boards. Of FTSE 350 companies, 42.7% of board roles were held by women. Of the 50 private companies, 30.1% of board roles were held by women. This means that 69% of the FTSE 350 met or exceeded the target of a minimum of 40% women's representation on the board. There were no all men boards.
  
  Of the 50 private companies, 33% met or exceeded the 40% target. The number of all men boards decreased to three.
• Women in leadership (being the executive committee and the direct reports to the executive committee). The level of women in leadership roles was 35.9% for the FTSE 350 and 37.1% for the 50 private companies. This means that 31% of the FTSE 350 and 38% of the 50 private companies met or exceeded the 40% target for women in leadership.
• Four Key Roles (being the Chair, Senior Independent Director, CEO and Finance Director). For the FTSE 350, the number of women in the role of Chair decreased to 59 (down from 60), there were 54 Finance Directors (down from 57), but the number of women CEOs increased to 21 (up from 19) and there were 209 Senior Independent Directors (up from 192).
  
  Across the 50 private companies, the number of Chairs increased to 10 (from seven) and the number of CEOs to 10 (up from eight). The number of Senior Independent Directors fell to 10 (down from 15) and the number of Finance Directors remained at 11.

For a reminder of the findings of the 2025 Review, see AGC Update, Issue 63 – Item 8.

Sustainability

10. Government endorses UK Sustainability Reporting Standards

The Secretary of State for Business and Trade has published the UK Sustainability Reporting Standards (UK SRS) and the government's response to its June 2025 consultation on the exposure drafts of the UK SRS. The UK SRS are the UK endorsed versions of the International Sustainability Standards Board (ISSB) sustainability reporting standards: IFRS S1 (general sustainability disclosures) and S2 (climate-related disclosures). For background on the consultation, see UK Government consults on adopting ISSB sustainability reporting standards and mandating Transition Plans to develop a sustainability reporting framework.

Minimal amendments have been made to S1 and S2 to make them relevant in a UK context. The key changes include:

• Removal of the specific time references within UK SRS S1 and UK SRS S2 so that they do not specify how long the reliefs for non-climate reporting and Scope 3 reporting may be applied. This means voluntary users of the UK SRS can use these reliefs indefinitely unless they become subject to the mandatory reporting regimes.
• Changes have also been made to clarify that the length of the reliefs for those required to report will be specified in the Companies Act, the UKLRs, and by any regulatory authority that has the ability to mandate the use of the UK SRS.
• A new paragraph B59A has been added in UK SRS S2 requiring financial institutions that have determined that they cannot reliably estimate their financed emissions for the same reporting period as the related financial statements to explain why they have not been able to comply with the financed emissions disclosure requirements (contained in paragraph B59).
• References to the Sustainability Accounting Standards Board materials have been amended so that entities may choose, rather than being obliged, to refer to them.
• The UK SRS also reflect the ISSB's recent changes to S2 concerning: (i) use of Global Industry Classification Standard; (ii) Scope 3 emissions associated with derivatives, facilitated emissions, and insurance-associated emissions; (iii) jurisdiction reliefs for the use of certain Global Warming Potential values; and (iv) jurisdictional relief regarding the required use of a methodology other than the GHG Protocol (see AGC Update, Issue 77 – Item 11).

The publication of the UK SRS is the culmination of a process to adopt the ISSB standards that was announced shortly after the Standards were published in June 2023. The Standards are now available immediately for voluntary use and the next step is for the FCA and the government to mandate their use by listed companies and companies not subject to the UKLRs (respectively). The dates for when any mandatory requirements would apply will be set out in forthcoming regulations or legislation (as applicable).

Relatedly, the FCA is currently consulting on amendments to the UKLRs to require disclosures by listed companies under UK SRS S1 and S2 (for further information, see FCA consults on aligning listed issuers sustainability disclosures with UK SRS). For private companies, the consultation response states that the government will consult later in 2026 on whether to require them to report information in accordance with UK SRS as part of its Modernising Corporate Reporting programme which is intended to streamline corporate reporting requirements.

The consultation response also clarifies the following:

• As UK SRS S2 is a national reporting framework for the purposes of section 414CB(6) of the Companies Act 2006 (which specifies the contents of non-financial and sustainability information statements), companies reporting on either a mandatory or voluntary basis in accordance with UK SRS S2 do not need to duplicate their disclosures in order to meet their climate-related financial disclosure obligations under section 414CB(2A) provided that the relevant requirements under section 414CB (1) to (5) are met and the use of UK SRS S2 is clearly referenced in the relevant statement. The guidance on climate-related financial disclosures for companies and LLPs will be updated to reflect this. The government will consider the future of the section 414CB(2A) obligations when the merits of reporting using the UK SRS are considered.
• The Department for Energy Security and Net Zero will consider how energy and emissions data reported by an entity using UK SRS interacts with the Streamlined Energy and Carbon Reporting or 'SECR' requirements with the aim of reducing duplication.
• If entities include UK SRS disclosure within their Strategic Report, this will ensure that the directors' liability safe harbour provisions in section 463 of the Companies Act automatically apply.

11. EU's Sustainability Reporting Omnibus arrives

Directive (EU) 2026/470 (the Content Directive) of EU's sustainability reporting Omnibus has been published in the EU Official Journal. The Directive, which was adopted by the Council of the EU on the 24 February 2026 following adoption by the EU Parliament in December 2025, amends the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive to (amongst other things) reduce the number of companies in-scope, reduce the impact on SME supply chain partners and remove the need for companies to produce and publish climate-related transition plans. For detail of the amendments, see EU sustainability reporting Omnibus reaches destination as Content Directive agreed.

The Directive enters into force on 18 March 2026 and must be transposed into national law by EU Member States within 12 months. Article 4 of the Directive relating to CS3D amendments must be transposed by Member States by 26 July 2028, with provisions mostly taking effect from 26 July 2029.

Following the technical advice received from EFRAG in December 2025, the EU Commission will now prepare a Delegated Act revising the first set of EU Sustainability Reporting Standards (ESRS) that were adopted in 2023. The revised ESRS will streamline the reporting requirements under the CSRD and are expected to be available within six months of the Content Directive entering into force.

To find out more on the impacts of these changes for your organisation, see On Board the ESG Omnibus I: Key Take-Aways for Businesses in 2026.

Authors: Will Chalk, Partner; Shan Shori, Expertise Counsel; Becky Clissmann, Sustainability Counsel; Marianna Kennedy, Senior Associate.

If you would like to receive future Ashurst Governance & Compliance updates, please click here to sign up.