UK Quoted Company Newsletter Q4 2022

1. Ashurst published - 2023 AGM and reporting season: what to expect - which summarises key developments to be aware of when preparing for 2023 annual general meetings and compiling the narrative aspects of annual reports. This briefing is aimed principally at premium listed companies but also covers material developments for standard listed companies, AIM companies and large private companies. For further information please see article 1 of AGC 31 (23/12/22).

2. Glass Lewis published 2023 proxy voting policy guidelines for the UK which set out its approach to assessing all topics on the annual general meeting agenda. For further information please see article 5 of AGC 29 (21/11/22).

3. Institutional Shareholder Services published its voting guidelines for 2023. The updated proxy voting policies generally apply for shareholder meetings taking place on or after 1 February 2023. For further information please see article 1 of AGC 30 (8/12/22).

4. Financial Reporting Council published - 'What makes good annual reports and accounts' – which highlights the attributes of a good annual report and accounts; considers materiality; and examines effective corporate reporting and communication principles. For further information please see article 2 of AGC 31 (23/12/22).

5. Financial Reporting Council published its annual review of corporate reporting for 2021/2022 and its year-end update of key corporate reporting matters. The FRC noted that the quality of corporate reporting within the FTSE 350 has been maintained, requiring fewer substantive questions in relation to the top ten areas of challenge compared with the prior year. In particular, it noted improvements in companies’ reporting of judgements and estimation uncertainty, impairment of non-financial assets, alternative performance measures and revenue. However, it also noted scope for improvement, particularly in relation to financial instruments and deferred tax. For further information please see article 1 of AGC 28 (10/11/22).

6. Financial Reporting Council issued a thematic review of company accounting and reporting for business combinations. The review considered the requirements of IFRS 3 together with the disclosure requirements in the Companies Act 2006 and the FCA's Disclosure Guidance and Transparency Rules that could apply in such circumstances. For further information please see article 11 of AGC 27 (28/10/22).

7. Financial Reporting Council announced its areas of supervisory focus for 2023/24, including priority sectors for corporate reporting reviews and audit quality inspections. The FRC also published its '2023-2026 draft 3-year Plan'. The FRC Lab published a newsletter focusing on corporate reporting in the year ahead. This aggregates all significant FRC and FRC Lab publications and is designed to assist reporting teams in preparing their annual reports in the coming months. For further information please see article 3 of AGC 31 (23/12/22).

8. Financial Reporting Council Lab launched a project on materiality in corporate reporting, seeking to understand how companies develop, assess and use materiality in their reporting and to consider how enhancements to disclosure about materiality processes might assist investors. For further information please see article 12 of AGC 27 (28/10/22).

9. Financial Reporting Council published a 'Review of Stewardship Code Reporting'. This analyses how signatories to the UK Stewardship Code 2020, of which there are now 235, reported against it in 2022 and sets out the FRC's reporting expectations for the 2023 assessment year. For further information please see article 5 of AGC 30 (8/12/22).

10. Financial Reporting Council published an updated version of its application guidance for FRS 100 (Application of Financial Reporting Requirements). The amendments relate to the interpretation of 'equivalent for various purposes and reflect changes to company law and decisions on equivalence following the UK's exit from the EU. For further information please see article 6 of AGC 30 (8/12/22).

11. Financial Reporting Council published draft amendments to FRS 102. The proposed amendments include providing greater clarity for small entities in the UK regarding which disclosures need to be provided in order to give a 'true and fair view'. The proposed effective date for these amendments is accounting periods beginning on or after 1 January 2025, with early application permitted provided that all amendments are applied at the same time. For further information please see article 4 of AGC 31 (23/12/22).

12. Financial Reporting Council published a consultation on FRED 81: FRS 101 Reduced Disclosure Framework. By way of reminder, FRS 101 requires a company to apply EU-adopted IFRS subject to specified disclosure exemptions. The consultation follows the FRC's annual review which considers additional disclosure exemptions as International Financial Reporting Standards (IFRS) evolve. For further information please see article 7 of AGC 30 (8/12/22).

13. Financial Reporting Council published its suite of taxonomies for use in 2023, which incorporates changes to all of the FRC's taxonomies including: UK IFRS, FRS 101, FRS 102 and the UK Single Electronic Format Taxonomy documentation. Supporting documents, key information sheets and release notes were also published. For further information please see article 8 of AGC 28 (10/11/22).

14. Financial Reporting Council issued its Review of Corporate Governance Reporting for 2022. This is based on a review of 100 FTSE 350 and Small Cap companies. The review highlights findings on a wide range of governance issues including reporting, workforce engagement, stakeholder engagement, diversity and risk management. For further information please see article 2 of AGC 28 (10/11/22).

15. Financial Reporting Council consulted on a new minimum standard for audit committees. This followed the Restoring Trust in Audit and Corporate Governance White Paper, which sets out the government's intention to give the FRC's successor body – the Audit, Reporting and Governance Authority – statutory powers to mandate minimum standards for audit committees. For further information please see article 1 of AGC 29 (21/11/22).

16. International Corporate Governance Network issued - 'The Governance of sustainability: An investor view of board effectiveness' – which considers the investor view of the board's role in the creation and oversight of the company's sustainability journey in meeting rising global investor expectations. For further information please see article 7 of AGC 27 (28/10/22).

17. Financial Reporting Council published - Navigating barriers to senior leadership for people from minority ethnic groups in FTSE 100 and FTSE 250 companies. The research underpinning the report was conducted by Cranfield University and Delta Alpha Psi Services on behalf of the FRC. For further information please see article 5 of AGC 27 (28/10/22).

18. Investment Association published its annual updated Principles of Remuneration for 2023, as well as a letter to remuneration committee chairs which highlights the IA's view of the principal issues of concern to investors that committees should consider. For further information please see article 6 of AGC 29 (21/11/22).

19. Financial Reporting Council published - Environment for Auditor Scepticism and Challenge - which sets out examples of good practice to improve auditor scepticism and challenge. The report provides examples of commendable practice from the FRC's ongoing supervision work. For further information please see article 4 of AGC 30 (8/12/22).

20. Financial Reporting Council published a report on net zero disclosures intended to assist companies preparing disclosures on net zero or carbon neutrality and other greenhouse gas (GHG) emission reduction commitments. The report includes suggested elements to consider when preparing disclosures and highlights issues which may arise, examples from practice and practical questions for preparers to consider, as well as tips from companies. It is supplemented with a separate example bank which sets out detailed examples of current good practice. For the FRC's summary of the findings of the report, click here. For further information please see article 8 of AGC 27 (28/10/22).

21. Financial Conduct Authority confirmed the formation of a new working group to develop a voluntary code of conduct for ESG data and ratings providers. It has also published associated terms of reference. This development is in response to the increasing reliance placed by financial services firms on third party ESG data and ratings services as firms integrate ESG into their activities and expand their ESG-focused products. For further information please see article 2 of AGC 30 (8/12/22).

22. Task Force on Climate-related Financial Disclosures issued its 2022 Status Report, which set out findings from a review of developments and progress in the reporting of climate-related financial risk information in the five years since the Task Force first published its Recommendations. For further information please see article 9 of AGC 27 (28/10/22).

23. Quoted Companies Alliance published a report of the results of a recent ESG-focused survey examining the experiences of small and mid-sized quoted companies. For further information please see article 10 of AGC 27 (28/10/22).

24. Financial Reporting Council, on behalf of the Pre-Emption Group (PEG), issued a revised Statement of Principles on the disapplication of pre-emption rights, together with template resolutions. The 2022 Statement of Principles implemented the revised pre-emption regime set out in the UK Secondary Capital Raising Review. For further information please see article 4 of AGC 28 (10/11/22).

25. Financial Conduct Authority published Primary Market Bulletin 42, in which it addressed: climate-related disclosure requirements; the relationship between the National Security and Investment Act, the Listing Rules and the UK Market Abuse Regulation; unlawful disclosures; and rules and guidance for cash shells and special purpose acquisition companies on reverse takeovers. For further information please see article 5 of AGC 31 (23/12/22).

26. Government unveiled the "Edinburgh Reforms" of UK financial services, consisting of over 30 regulatory reforms that aim to drive growth and competitiveness in the UK financial services sector. The reforms build on the government's vision for UK financial services in a post-Brexit landscape. For further information please see article 8 of AGC 31, 23/12/22.

27. Financial Conduct Authority published Market Watch 71 which makes various observations on how investment and advisory firms produce and maintain insider lists. These provide relevant insights for market participants subject to the UK MAR regime. For further information please see article 5 of AGC 31 (23/12/22).

28. London Stock Exchange published Market Notice N19/22 providing feedback on its consultation on the creation of London Stock Exchange’s Voluntary Carbon Market. The Notice confirmed the resulting changes to the Admission and Disclosure Standards. The LSE published clean and blackline versions of the amended Standards. For further information please see article 5 of AGC 27 (28/10/22).

29. Financial Reporting Council published – 'General principles for considering the public interest in our work' - that it will use to assess whether the public interest is best served by carrying out regulatory, supervisory and enforcement work that is outside of its primary 'regulatory perimeter' For further information please see article 2 of AGC 29 (21/11/22).

30. European Securities and Markets Authority published an updated version of its 'Questions and Answers on the Market Abuse Regulation'. The latest version contains a revised Q&A on persons professionally arranging or executing transactions in the context of the prevention and detection of market abuse. By way of reminder, notwithstanding the UK's exit from the EU, the FCA will consider ESMA's Q&A, where relevant, when interpreting the provisions of MAR as applied in the UK. For further information please see article 3 of AGC 30 (8/12/22).

31. Financial Conduct Authority issued decision notices against Barclays plc and Barclays Bank plc (together, Barclays) and announced that it had decided to fine Barclays a total of £50 million in relation to its failure to disclose certain arrangements agreed with key investors as part of Barclays' high-profile capital raisings at the height of the 2008 financial crisis. For further information please see article 6 of AGC 28 (10/11/22).

32. Financial Conduct Authority issued a final notice in relation to Metro Bank PLC and fined it for breaching Listing Rule 1.3.3R by publishing inaccurate information to investors. The FCA has also published decision notices in relation to Metro Bank's former CEO and former CFO for being knowingly concerned in the breach. For further information please see article 7 of AGC 31 (23/12/22).

33. Financial Conduct Authority issued Umuthi Healthcare Solutions PLC with a supervisory notice confirming its decision to discontinue unilaterally the listing of the company's shares from the Official List with immediate effect. The supervisory notice explains the FCA's decision in detail. For further information please see article 7 of AGC 28 (10/11/22).

34. Supreme Court affirmed and developed 'creditor duty'. In BTI 2014 LLC v Sequana SA and others [2022] UKSC 25, the Supreme Court delivered its decision on the existence and extent of the common law duty of directors as regards a company's creditors, known as the 'creditor duty'. The creditor duty concerns the duty of directors to consider and give appropriate weight to the interests of creditors where a company is facing insolvency. The Supreme Court not only confirmed the common law creditor duty of directors but also clarified the nature of it and the time at which it arises. For further information please see article 4 of AGC 27 (28/10/22). For our detailed overview of the judgment and its application in practice, click here.

35. City of London Law Society published an updated practice note which sets out the legislative framework and provides guidance on the use of electronic signatures for executing commercial contracts. A version showing the changes made to the 2016 original has also been published. For further information please see article 7 of AGC 28 (10/11/22).

36. Ashurst and Practical Law Company Q4 2022. Ashurst (25/1/23)

37. UK Public M&A Update Q3 2022. Ashurst Public M&A Update (20/10/22)

38. Economic Crime and Transparency Bill. This briefing considers the key reforms proposed in Part One of the Bill including significant reforms aimed at improving transparency of companies and their directors, shareholders and persons with significant control, and an enhanced role for the Registrar of Companies. Ashurst Corporate Briefing (28/10/22)

39. Pre-Emption Group revised Statement of Principles. This briefing considers the Pre-Emption Group's 2022 Statement of Principles on the disapplication of pre-emption rights, together with template resolutions. The 2022 Statement of Principles implement the revised pre-emption regime set out in the UK Secondary Capital Raising Review. Ashurst Corporate Update (8/11/22)

40. Big Bang 2.0? The Edinburgh Reforms. This briefing considers the Edinburgh Reforms, which are intended to deliver the next chapter of the Government’s vision for UK financial services and are divided into four categories: a competitive marketplace promoting effective use of capital; sustainable finance; technology and innovation; and consumers and business. Finance Regulatory (15/12/22)

41. How flexible is flexible working about to become? Following the pandemic, many organisations have staff working flexibly at least some of the time. Building on its manifesto commitment to encourage flexible working, the government published its consultation, Making Flexible Working the Default in 2021 and has recently issued a response to that consultation. This briefing considers the government's key proposals on how flexible working is set to change, although the timing of introducing these amendments is still unclear. Employment Update (7/12/22)