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UK Quoted Company Newsletter Q1 2023

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    UK Quoted Company Newsletter Q1 2023

    Annual General Meetings

    1. Investment Association (IA) published shareholder priorities for 2023 which it issues annually ahead of the AGM season and outlines the key areas that investment managers want companies to consider as drivers of long-term value. The IA has maintained focus on prioritising issues of climate change, diversity, audit quality and stakeholder voice.  For further information please see article 2 of AGC 33 (23/2/23),

    2. Pensions and Lifetime Savings Authority published Stewardship and Voting Guidelines for 2023 which reflect a focus on shareholder engagement and include dedicated sections designed to help investors challenge how investee companies are managed. The Guidelines tackle issues such as board leadership and company purpose, division of responsibilities, audit, risk, climate change, the workforce and capital structure. Key emerging themes for the 2023 AGM season discussed in the Guidelines include: the cost of living crisis and executive pay; climate change and the environment; and workforce issues and impact of operations on society. For further information please see article 1 of  AGC 35 (13/4/23).

    3. Investment Association (IA) published revised Share Capital Management Guidelines which set out the expectations of IA members when companies seek shareholder authorisation for the general allotment of new shares and the disapplication of pre-emption rights. The Guidelines have been revised to reflect the findings of the UK Secondary Capital Raising Review (see AGC update, Issue 23) and the revised Pre-Emption Group Statement of Principles (see AGC update, Issue 28). For further information please see article 1 of AGC 33 (23/2/23).

    4. Glass Lewis published 2023 EU Proxy Season Preview which includes an overview of local governance, compensation, ESG trends and regulatory developments, along with a breakdown of how those issues will impact Glass Lewis’ benchmark voting policy and overall approach.  For further information please see article 2 of AGC 35 (13/4/23).

    5. Financial Reporting Council published an updated Approach to Audit Supervision, first published in March 2021. The FRC will update the document again when it transitions to becoming ARGA – the Audit, Reporting and Governance Authority. For further information please see article 6 of AGC 35 (13/4/23).

    Corporate Governance, ESG and Corporate Reporting

    6. Quoted Companies Alliance (QCA) published a report examining the QCA Code which the vast majority of AIM companies choose to apply. The report covers the progress of AIM-quoted companies in meeting the QCA Code Principles, charting the extent of disclosure against each of the Code's Principles. For further information please see article 6 of AGC 34 (29/3/23).

    7. Financial Reporting Council published an update to its 2021 Statement of Intent on ESG issues which records the FRC's ESG initiatives since 2021 and highlights its key areas of focus for ESG reporting during 2023. For further information please see article 3 of AGC 32 (13/1/22).

    8. UK Government published a consultation on the future regulatory regime for ESG ratings providers which proposes that their activities should come within the UK financial regulatory perimeter. The key issues are considered in our briefing, here. For further information please see article 4 of AGC 35 (13/4/23).

    9. UK Government published an independent review of the approach to delivering its net zero target, which includes recommendations relevant to UK companies. Of the Review's 129 recommendations, those relevant to UK companies include Recommendations 14 (Incentivise financial disclosures and standards), 15 (Standard setting – transition plans, taxonomy, greenwashing and stewardship) and 68 (Listings, capital raising and project finance). For further information please see article 4 of AGC 32 (13/1/22).

    10. UK Government published - Mobilising green investment: 2023 green finance strategy, which focuses on the need for green investment and on opportunities for the UK's financial and professional services sectors in light of the UK's 2050 net zero target and the environmental objectives in the government's Environmental Improvement Plan. The update sets out how the government will meet its aim of becoming the world's first net zero-aligned financial centre. To watch a recording of an Ashurst webinar, click here. For further information please see article 3 of AGC 35 (13/4/23).

    11. Financial Reporting Council announced an increase in the number of signatories to the UK Stewardship Code 2020 which sets high stewardship standards for those investing money on behalf of UK savers and pensioners, and those that support them. There are now a total of 254 signatories to the Code who are responsible for managing approximately £40.7 trillion of assets. The FRC notes better levels of reporting in the current application cycle and states that it will continue to place emphasis on reporting of activities and outcomes when assessing reports received in 2023. For further information please see article 5 of AGC 33 (23/2/23).

    12. Parker Review Committee published 2023 update report on improving the ethnic diversity of UK business. The report highlights the results of its latest survey on the ethnic diversity of FTSE 350 boards and also suggests new targets for FTSE 350 companies and 50 of the UK's largest private companies. For further information please see article 3 of AGC 34 (29/3/23).

    13. FTSE Women Leaders Review published its second report focused on gender balance on the boards of the largest companies. The group monitors and sets recommendations in respect of women's representation on the boards of, and in senior leadership positions within, FTSE 350 companies and the UK's 50 largest private companies. The report highlights the current position and sets new targets including: FTSE 350 boards and leadership teams aiming to comprise 40 per cent women by the end of 2025; and FTSE 350 companies having at least one woman in the Chair or Senior Independent Director role and/or one woman in the CEO or Finance Director role by the end of 2025. For further information please see article 4 of AGC 34 (29/3/23).

    14. UK Government published updated guidance on reporting gender pay gap information for businesses with 250 or more employees which is intended to be clearer and simpler. For further information please see article 5 of AGC 34 (29/3/23).

    15. Private Equity Reporting Group (PERG) published its 15th annual report. In doing so PERG, the independent body promoting enhancements in transparency and disclosure within the UK private equity industry, has updated its guide to good practice reporting by portfolio companies under the Guidelines for Disclosure and Transparency in Private Equity (the Walker Guidelines). For further information please see article 7 of AGC 34 (29/3/23).

    16. UK Government published a consultation designed to 'amend and improve' the regime of payment practices reporting currently found in The Reporting on Payment Practices and Performance Regulations 2017 (and in the equivalent LLP Regulations). The consultation follows a statutory review of the Regulations which found that they have brought greater transparency to the payment practices and performance of large businesses. As such, the government believes that the policy which underpins the Regulations remains appropriate and is consulting on various 'enhancements' to the regime. For further information please see article 2 of AGC 32 (13/1/23).

    17. Financial Conduct Authority published a consultation paper (CP23/2) on proposed changes to streamline and simplify its existing rules for those UK issuers required to produce their annual reports using structured digital formats. For further information please see article 7 of AGC 32 (13/1/23).

    Rules and Regulation

    18. Financial Conduct Authority published Primary Market Bulletin 44 (PMB 44), which features guidance on diversity and inclusion on company boards and executive management. The FCA's mandatory diversity disclosure requirements apply to financial reporting periods beginning on or after 1 April 2022 and require in-scope companies (principally premium and standard listed issuers) to provide a statement in their annual report on a 'comply or explain' basis, setting out whether they have met the relevant targets on board diversity as at a chosen reference date within its accounting period. PMB 44 sets out a reminder of all material requirements and the FCA's disclosure expectations. In particular, the FCA emphasises that it expects 'clear and meaningful' explanations as to why targets have not been met.

    PMB 44 also features guidance for issuers when using a Primary Information Provider to disclose regulated information, including all information which an issuer is required to disclose under the DTRs, the UK Market Abuse Regulation or the Listing Rules. For further information please see article 1 ofAGC 34 (29/3/23).

    19. Financial Conduct Authority published Primary Market Bulletin 43 (PMB 43) which includes: guidance on the launch of multi-factor authentication for FCA systems; and reminds third country issuers of the equivalence of non-UK regimes. For further information please see article 3 of AGC 33 (23/2/23).

    20. UK Government published Terms of Reference: Investment Research Review (as part of the Edinburgh Reforms, see item 8 of AGC update, Issue 31), which will examine the link between levels of investment research and the attractiveness of the UK as a destination for companies to access capital. The Review will report back to the government by mid-June 2023. For further information please see article 2 of AGC 33 (23/2/23).

    21. In a speech delivered on the reform of UK capital markets by FCA Chief Executive, Nikhil Rathi, helpful indications were given about the form of the impending FCA listing regime reforms. The FCA aims to publish a blueprint for further reform of the listing regime soon; a consultation paper could potentially be published as early as May. The FCA stresses that the listing regime is part of a wider capital markets ecosystem, which includes asset management, ESG labelling and the approach of UK pension funds to investment in UK equities, and all elements of this ecosystem need to be aligned. For further information please see article 9 of AGC 35 (13/4/23).

    Companies House

    22. Companies House has written to customers in relation to the filing of resolutions. In line with its aim of improving the quality of information on the register, Companies House will no longer accept a set of minutes which have a resolution embedded within them. Companies will need to file separate copies of resolutions to comply with filing requirements and resolutions incorporated within minutes will be rejected. For further information please see article 8 of AGC 34 (29/3/23).

    23. Companies House published a blog in which it sets out its plans to introduce software-only filing of annual accounts. The plans flow from new powers proposed in the Economic Crime and Corporate Transparency Bill. For further information please see article 4 of AGC 33 (23/2/23).

    24. Companies House published an updated version of its Guidance: Report a discrepancy about a beneficial owner on the PSC register which provides guidance on how to make a report if there is a material discrepancy between the information held about a person with significant control (PSC) or registrable beneficial owner of an overseas entity, and the information on the Companies House register. The guidance has been updated to reflect changes to new money laundering legislation effective from 1 April 2023. For further information please see article 7 of AGC 35 (13/4/23).

    Corporate Crime

    25. UK Government published its Economic Crime Plan 2023 to 2026 which commits the government to reducing money laundering, recovering more criminal assets and cutting fraud. Measures in the plan include: limiting the abuse of corporate structures by implementing the Companies House reforms proposed in the Economic Crime and Corporate Transparency Bill (ECCT) currently making its way through Parliament; and introducing a new 'failure to prevent fraud' offence via the ECCT, which will hold companies criminally liable for fraud conducted by an employee where reasonable procedures are not in place to prevent such conduct. The government has also published a fact sheet on the new offence. For further information please see article 5 of AGC 35 (13/4/23).

    Other Ashurst Q1 2023 publications


    26. Ashurst and Practical Law Company Q1 2023 (18/4/23)

    27. Changes to the UK Takeover Code to come into effect on 22 May 2023 (4/4/23)

    28. The Corporate Sustainability Reporting Directive: An overview (8/2/23)

    29. The Corporate Sustainability Due Diligence Directive proposal (8/2/23)

    Competition and EU

    30. Managing the impact of the new Foreign Subsidies Regulation (21/2/23)

    Debt Capital Markets

    31. Ashurst Quarterly Debt Capital Markets Update Q1 2023 (17/4/23)

    Dispute Resolution

    32. Good deals gone bad - lessons learned from recent M&A disputes (22/3/23)


    33. Save the date – UK employment law changes and key dates (31/3/23)


    34. Is enforcement action on the horizon for failed disclosures? FCA warning for ESG benchmarks (24/3/23)

    35. The failure to prevent fraud offence at a glance: what do companies need to know? (17/4/23)

    36. ESG ratings providers: the regulatory net has been cast (31/3/23)

    37. The FCA's new Business Plan - what it means for enforcement (14/4/23)

    38. Spare a Thought for the Four Day Week (6/4/23)

    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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