Ashurst Governance & Compliance Update - Issue 60

AGMs in 2025

1. ISS publishes 2025 proxy voting guidelines updates

Institutional Shareholder Services has published updates to its UK and Ireland proxy voting guidelines for 2025 following consultation, an overview of which was contained in AGC Update – Issue 59, Item 5.

Amendments to the 2025 Guidelines include:

• Gender and ethnic diversity: The Guidelines now more clearly reflect the FCA requirement in the UK Listing Rules for listed companies to report against the diversity targets, as opposed to actually meeting them (although progress against the targets is expected by investors).
• Listing Regime review: The Guidelines have been updated to reflect the FCA's changes to the Listing Categories made as part of the UK Listing Regime review in July 2004. This means that references to 'premium' and 'standard' listings have been removed and replaced by references to the new categories.
• Remuneration: Reflecting the updated Investment Association's Principles of Remuneration (see AGC Update – Issue 57, Item 1) and the 2024 iteration of the UK Corporate Governance Code, the
  Guidelines now include additional guidance for the disclosure of malus and clawback arrangements.
  
  The Guidelines also remove the share dilution limit applicable to executive (discretionary) share schemes, which had provided that companies should not issue new shares or re-issue treasury shares above 5 per cent of a company's issued share capital in any rolling 10-year period for the purpose of such schemes. The updated principles maintain the 'only 10 per cent in 10-year' dilution limit applicable to all employee share schemes. The Guidelines state that the 5 per cent dilution limit continues to be considered 'good market practice by many investors' and therefore where company schemes can exceed this limit, the rationale for being able to do so should be explained.
• AIM and the 2023 QCA Code: The Guidelines now reflect the 2023 QCA Corporate Governance Code and, in particular, new Principle 9 which includes the recommendation to put remuneration reports to annual advisory shareholder votes and remuneration policies, where a binding vote is not mandated, to similar advisory votes. They also acknowledge that disclosures as a consequence of the 2023 QCA Code will be made for the first time in Q2 2025 given the application of the Code, on a 'transition' basis, to financial periods beginning on or after 1 April 2024.

The updates will be applied for shareholder meetings held on or after 1 February 2025.

Payment Practices

2. Government launches Fair Payment Code

The Office of the Small Business Commissioner, on behalf of the Department of Business and Trade, has announced the launch of the Fair Payment Code. This is a voluntary code of best practice that is designed to support small businesses by tackling the issue of late payments and promoting a more responsible payment culture. The new Code replaces the Prompt Payment Code, which was introduced in 2008.

By way of reminder, the launch of the Fair Payment Code is a further measure designed to promote transparency and encourage better payment practices in the UK given the criticality of cash flow for small businesses. For more detail, including other measures yet to be brought forward, see AGC Update – Issue 56, Item 7.

The Fair Payment Code aims to reward best practice and drive improvements in payment performance through a tiered system of awards. The three Award tiers are:

• Gold Award – for those firms paying at least 95 per cent of all invoices within 30 days.
• Silver Award – for those paying at least 95 per cent of all invoices within 60 days, including at least 95 per cent of invoices to small businesses within 30 days.
• Bronze Award – for those paying at least 95 per cent of all invoices within 60 days.

Every business granted an Award must agree to abide by a set of fair payment principles - i.e. that they will be clear, fair and collaborative with their suppliers.

Fair Payment Code Awards are for two years and every business will be required to reapply at the end of each two-year period. Businesses with a UK registered office can now apply for any Award level - the application window will be September to December each year, although applications can be made at other times. 

Existing signatories to the Prompt Payment Code will not automatically become Award-holders under this new regime. 

Corporate Governance

3. FCA consults on handbook changes to reflect 2024 UK Corporate Governance Code

The FCA has published a quarterly consultation in order to make relatively minor amendments to the UK Listing Rules, Disclosure Guidance and Transparency Rules and the Glossary to the FCA Hanbook to reflect the 2024 iteration of the UK Corporate Governance Code. 

Changes to the FCA Handbook

FCA proposals include, amongst other things:

• updates to the definition of the Code in the Glossary;
• updating references to Code guidance (including at UKLR 6.6 (appropriateness of adopting the going concern basis of accounting and assessment of the company's prospects) and DTR 7.2 (corporate governance statements)) in light of the fact that the Code guidance is not intended to be prescriptive. Instead, the FCA proposes to add a note to highlight that the FRC publishes guidance on the Code on its website; and
• incorporating a new note in the Handbook to acknowledge the FRC’s position statement in the Code that: 'Externally managed investment companies (which typically have a different board and company structure that may affect the relevance of particular Principles) may wish to use the Association of Investment Companies’ Corporate Governance Code to meet their obligations under the Code'.

Transitional provisions

Companies in the Equity securities (commercial companies) listing category will be expected to apply and report against the 2018 version of the Code for financial years beginning before 1 January 2025, and against the 2024 version for financial years beginning on or after the date on which the proposed changes come into effect. Between 1 January 2025 and the date on which the proposed changes come into effect, issuers would be able to apply either version of the Code.

Feedback is requested by 13 January 2025.

4. FRC assumes responsibility for Wates Corporate Governance Principles

Following Sir James Wates CBE’s decision to step aside from his role as chair of the Wates Principles Coalition Group at the end of 2024, the Financial Reporting Council has announced that it will assume governance of the Wates Corporate Governance Principles for Large Private Companies. We will provide further updates on the implications of this shift in stewardship when they are known.

FCA Handbook changes

5. FCA publishes Primary Market Bulletin No 53 and updates Knowledge Base

The FCA has published Primary Market Bulletin No 53 which focuses on updates to guidance in the FCA's Knowledge Base primarily to reflect the implementation of the new UK Listing Rules and feedback on the sponsor regime. The PMB builds on the FCA's consultation process, which started with Primary Market Bulletin 48, and is in line with the FCA's phased approach to updating its guidance (see AGC Update – Issue 52, Item 1). 

In overview, in PMB 53 the FCA: 

• Reconsults on two technical notes relating to: (i) principles for sponsors (TN 710 - Sponsor Services: Principles for Sponsors); and (ii) aggregating transactions (TN 307 - Aggregating transactions) to reflect, amongst other things, the final form UKLRs. The FCA originally consulted on these technical notes in PMB 48.
• Consults on material amendments to three technical notes relating to: (i) Listing Principle 2 (UKLA/TN/209.3 - Listing Principle 2 Dealing with the FCA in an open and cooperative manner), in respect of which the FCA proposes to clarify that this Listing Principle also applies where an issuer becomes aware that it is no longer able to comply with a continuing obligation in the UKLRs (such as the need for an issuer to have a threshold number of shares in public hands); (ii) closed-ended investment funds acquiring assets by a scheme of reconstruction (UKLA/TN/401.1 - Acquiring assets during investment trust roll-overs); and (iii) open-ended investment companies (Primary Market/TN/423.2 – Open-ended investment companies).
• Further to PMB 50, finalises three technical notes relating to the sponsor regime (see our client update here). These are as follows: FCA/TN/717.1 – Sponsors: Record Keeping Requirements, FCA/TN/723.1 – FCA reviews of sponsor services and FCA/TN/722.1 – Responsibilities of a sponsor: specialist due diligence.
• Consults on consequential changes to several technical and procedural notes to reflect the most recent updates to the Listing Regime and other historical changes, including Brexit.
• Consults on deleting one technical note and one procedural note, both of which relate to the prospectus regime and which have become obsolete following Brexit.

Responses should be submitted by 23 January 2025.

6. FCA publishes policy statement on enhancing the National Storage Mechanism and implementing instrument

The FCA has published a policy statement (PS24/19) on the requirements for submitting regulated information to the National Storage Mechanism following publication of its consultation paper (see AGC Update – Issue 55, Item 2) in August 2024.

The FCA is broadly making the changes on which it consulted, including by introducing: 

• more comprehensive metadata requirements by expanding the requirement for the filing of legal entity identifiers and updating the headline information that is used to categorise regulated information. This change is intended to improve the NSM's functionality; and
• a requirement for all Primary Information Providers to use the same standard schema and Application Programming Interface for submitting information to the NSM. This is intended to produce faster and standardised data exchange and processing, enabling the FCA to implement improved data quality controls.

The FCA has also published an instrument to implement the new requirements, which will come into force on 3 November 2025 alongside the guidance in a new Technical Note – both the instrument and the new Technical Note can be found at the end of the policy statement. The FCA has committed to providing more information in 2025 on what issuers and users of the NSM can expect to change as a result of the new rules.

By way of reminder, earlier in the year the FCA published Primary Market Bulletin 49 in which it set out its market practice findings as regards issuer obligations and use of the NSM, noting room for improvement – for more see AGC Update – Issue 53, Item 3.

Narrative and Financial Reporting

7. Regulations reducing reporting burdens and raising company size thresholds published

The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303) have been published and laid before Parliament. They mark the next stage in the government's de-regulatory agenda (commenced under the previous administration) – for more detail, see AGC Update – Issue 57, Item 5). An explanatory memorandum containing useful background and further information is here.

Reducing reporting burdens

The Regulations remove (by omitting parts of Schedule 7 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008) requirements for large and medium-sized companies to report on the following issues in their directors' report which duplicate, or have been superseded by, other reporting requirements or which lead to low-value disclosures:

• Information on the use of financial instruments* (reason for removal: superseded by international and UK accounting standards).
  
• Important events since the financial year-end* (superseded by accounting standards requiring disclosure of 'post balance sheet events').
• Information on likely future developments* (superseded by a requirement in the Strategic Report for companies to provide a 'fair review' of their business and a 'description of principal risks').
• Information about research and development activities* (duplicative of information provided under accounting standards and likely to feature in a company's review of its business model in the Strategic Report).
• An indication of a company's non-UK branches* (removed as considered of 'low-value' and arguably covered by disclosures on a company's operational footprint in its Strategic Report).
• Information in relation to the employment of disabled people (considered to be addressed more effectively and to a greater extent in more recent anti-discrimination legislation such as the Equality Act 2010).
  
  The requirement for small companies to report on this under paragraph 5 of Schedule 5 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 is also removed.
• Information on engagement with employees (requirement overlaps with requirements for the Strategic Report, such as the annual business review and section 172(1) Statement).
• Information on engagement with customers, suppliers and others (requirement overlaps with the section 172(1) Statement).

In relation to items asterisked above, companies to whom Chapter 4 of the FCA's DTRs apply will still need to consider equivalent disclosure requirements under DTR 4.1.11R.

Consequential amendments have also been made to the Insurance Accounts Directive (Miscellaneous Insurance Undertakings) Regulations 2008 and Partnerships (Accounts) Regulations 2008.

Uplifting financial thresholds

The Regulations also increase by approximately 50 per cent the turnover and balance sheet total (BST) thresholds for determining a company's size for reporting purposes under sections 382 to 384A and 465 to 466 of the Companies Act 2006, and regulations 5, 5A and 26 of the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. The changes made are as follows:

• Micro entities and micro-entity LLPs:
  • not more than £1 million turnover; and
  • not more than £500,000 BST.
• Small companies and LLPs:
  • not more than £15 million turnover; and
  • not more than £7.5 million BST.
• Small company groups and LLP groups:
  • not more than £15 million net (or £18 million gross) aggregate turnover; and
  • not more than £7.5 million net (or £9 million gross) aggregate BST.
• Medium-sized companies and LLPs:
  • not more than £54 million turnover; and
  • not more than £27 million BST.
• Medium-sized company groups and LLP groups:
  • not more than £54 million net (or £64 million gross) aggregate turnover; and
  • not more than £27 million net (or £32 million gross) aggregate BST.

To be clear, no amendments are required in relation to large companies, which are classified as such if they exceed the thresholds to qualify as medium-sized.

By way of reminder, the qualifying conditions for each size classification require that a company or group not exceed two out of three thresholds. The thresholds are a maximum figure for a company’s (i) annual turnover, (ii) balance sheet total, and (iii) its number of employees. Separately the government has committed to reviewing the employee threshold for medium-sized companies in its wider review of the non-financial reporting framework in 2025 (as also referred to in AGC Update – Issue 57, Item 5).

A transitional provision applies, such that when considering qualification as a particular company size by reference to a previous financial year, the amendments made by the Regulations are treated as having applied in those previous years.

By way of reminder, the main reporting and audit exemptions that apply to non-large companies are:

• Micro and small companies are exempt from the requirement to have a statutory audit of their annual accounts and from producing a Strategic Report; microentities are also exempt from producing a Directors’ Report.
• Micro-entities and small companies can adopt more simple accounting requirements to follow under relevant accounting standards
• Medium-sized companies are exempt from certain Strategic Report requirements.

Implementation

The Regulations come into force on, and the amendments they make have effect in relation to, financial years beginning on or after 6 April 2025.

Economic Crime and Corporate Transparency

8. Register of overseas entities and transparency of trust information

Overseas entities that own or wish to buy property in the UK must provide certain information to the Registrar of Companies including information about their beneficial owners or managing officers. This information is held at Companies House in the Register of Overseas Entities (ROE) and is generally publicly available. However, most of the information provided to Companies House in relation to overseas ownership interests involving trusts is not generally publicly disclosable.

New law¹ is expected to come into force next year aimed at further improving the transparency of the ROE by allowing anyone to apply to Companies House to obtain information about trusts relating to overseas entities, including information about the trustees and beneficiaries of the relevant trust. In certain cases, applicants will need to demonstrate that they have a legitimate interest in making the application (for example, where the trust information sought involves several overseas entities in a blanket application or relates to a minor). The Registrar will be able to decline such a request (for example, on national security grounds) or impose conditions subject to which the relevant protected trust information is disclosed, including conditions restricting its use or further disclosure. If approved by Parliament, these provisions are expected to come into force on 31 August 2025.

Anyone whose information could be published or disclosed under the ROE (such as trustees or beneficiaries of trusts related to overseas entities) will also be able to apply to the Registrar to have their details protected where such disclosure might, for example, lead to a serious risk of violence or intimidation. If approved by Parliament, these provisions are expected to come into force on 28 February 2025.

Sustainability

9. UK Sustainability Disclosure requirements come a step closer

The Financial Reporting Council, as the secretariat to the UK Sustainability Disclosure Technical Advisory Committee (TAC), has published the Committee’s recommendations to the Secretary of State (SoS) for Business and Trade on endorsement of the first two IFRS Sustainability Disclosure Standards (SDSs) (S1 and S2) that were published in 2023 by the International Sustainability Standards Board (ISSB). For more information on IFRS S1 (General Requirements) and S2 (Climate-related disclosures), see Disclosures required under the IFRS's Sustainability Disclosure Standards (ISSB S1 and S2).

TAC has concluded that endorsement of IFRS S1 and S2 with its proposed amendments would be conducive to the long-term public good in the UK. As changes to the IFRS SDS have only been recommended by TAC if: (i) they are necessary for the effective application of the IFRS SDS within a UK context; or (ii) failing to do so would be of detriment to the long-term public good in the UK, the proposed amendments are minimal. The amendments suggested are to:

• Allow entities providing finance to use an internationally recognised industry classification system (e.g. a classification system used by the entity for other regulatory or financial reporting purposes) instead of the Global Industry Classification Standard when reporting on Scope 1, 2 and 3 gross financed emissions of the counterparties the entity finances.
  
  Alternatively, these requirements in IFRS S2 would be retained but TAC recommends that the ISSB provides written clarification to acknowledge that the current industry practice of reporting financed emissions using the latest available reliable information for a previous period, clearly labelled as such, is not inconsistent with the requirements of IFRS S1 and IFRS S2. In the absence of this written acknowledgement from the ISSB, TAC recommends that the Policy and Implementation Committee (PIC) considers the need for such an acknowledgement for UK entities to avoid undue cost and effort.
• Remove the transition relief in IFRS S1 that permits delayed reporting in the first year (IFRS S1 paragraph E4) and extend the ‘climate-first’ reporting relief in IFRS S1, which allows entities to delay reporting sustainability-related information, to up to two years.
• Change the effective date of the IFRS SDS to remove the IFRS' date which has now passed and to rename this section ‘Initial application’. TAC noted that a decision on the effective date (i.e. when UK companies are obliged to make disclosures using the UK versions of IFRS S1 and S2 (UK SRS)) should be a matter for PIC to advise on.

The SoS is expected to consult on endorsing the IFRS SDS in Q1 of 2025 with a decision on endorsement being taken swiftly thereafter. Following an endorsement decision, the SoS is expected to consult on mandatory disclosure requirements against the UK SRS for certain UK incorporated companies – at present there is no indication of which companies are potentially in-scope. The FCA will also consult in 2025 on updating the disclosure rules in the UK Listing Rules so as to refer to the UK SRS.

For those in your teams who wish to understand the detail of the TAC recommendations, see here.

10. EFRAG publishes implementation guidance on Transition Plan reporting under CSRD

The Sustainability Reporting Technical Expert Group (SR TEG) of the European Financial Reporting Advisory Group (EFRAG) has published draft Implementation Guidance on Transition Plans. The guidance, which will form the fourth guidance document (IG 4) to support reporting under the Corporate Sustainability Reporting Directive, will be the subject of a consultation in 2025, once the SR TEG and EFRAG's Sustainability Reporting Board have approved the draft. A final version is expected to be published later in 2025. (For more information on the first three Implementation Guidance documents published by EFRAG on materiality, value chains and datapoints, see AGC Update - Issue 54, Item 8.)

IG 4 will support undertakings in-scope of the CSRD in implementing climate change mitigation transition plans as required under the EU Sustainability reporting Standards (ESRS). It explains the disclosure requirements for climate transition plans (chapter 3) and the connections to other European regulatory frameworks (such as the EU Taxonomy and the Corporate Sustainability Due Diligence Directive (CS3D)) and international standards (chapters 2 and 4). IG 4 also provides some high-level guidance on how just transition and biodiversity issues can be relevant when disclosing climate transition plans.

IG 4 provides answers to some FAQs, including on GHG targets, decarbonisation levers and financial planning (chapter 5). In particular:

• FAQ 3 explains that an undertaking may disclose a transition plan with targets that are not compatible with the 1.5 degrees Paris Agreement goal provided that the non-compatible targets in the transition plan are clearly labelled as such.
• FAQ 19 explains that an undertaking can conclude that a transition plan is not material if it has also decided that climate change and climate change mitigation are not material topics, although in this case the undertaking would also need to provide a detailed explanation of its materiality assessment and an analysis of the conditions that could lead it to conclude in the future that climate change was a material topic. Even if an undertaking has concluded that climate change is material, it can still conclude a transition plan is not material although, in such a scenario, the undertaking might still need to provide a mitigation action plan rather than a transition plan.

UK entities that are anticipated to be subject in the foreseeable future to requirements to disclose transition plans using the Transition Plan Taskforce's (TPT) Disclosure Framework, should note that IG 4 does not require undertakings reporting under the ESRS to be familiar with the Disclosure Framework. However, IG 4 does describe the Disclosure Framework as a valuable reference point when disclosing transition plans and notes the TPT has published a comparison between the Disclosure Framework and ESRS 2 (General Disclosures) and ESRS E1 (Climate). This approach perpetuates the multiplicity of sustainability reporting frameworks that large multinational companies and groups are increasingly subject to and will be seen as a missed opportunity to ensure interoperability between these standards.

11. EU confirms postponement to application of EU Deforestation Regulation

The European Parliament has confirmed the agreement reached with the Council on the European Commission's proposal to postpone the application timeline of the EU Regulation on Deforestation-free Products / EUDR (Regulation (EU) 2023/1115) by one year. This brings an end to the uncertainty that followed the November vote (see AGC Update – Issue 59, Item 12), when EU lawmakers voted not only in favour of the postponement but also added some substantial changes on key provisions of the Regulation. These amendments have been withdrawn by the European People's Party, including that on the creation of a new "no risk" category of countries. For more detail on the agreement, see our update here. For detail on EUDR, see our overview here.

12. EFRAG provides further detail on reporting for non-EU groups on CSRD

The European Financial Reporting Advisory Group has published working drafts of the Sustainability Reporting Standards for non-EU parent entities (NESRS) required under the Corporate Sustainability Reporting Directive. The NESRS will be subject to a review and consultation process before finally being submitted to the European Commission. 

The purpose of the NESRS is to elicit sustainability information, especially on in-scope entity's impacts on social and environmental matters, in order to ensure that third-country undertakings are accountable for these impacts on people and the environment and that there is a level playing field for companies operating in the EU. 

For an overview of the key elements of the working drafts, see our update here.

Regulation in practice – Audit

13. Audit market competition update sets out FRC’s evolving approach 

Of general interest, and particular interest to those contemplating an audit tender, the FRC has published its annual Audit Market and Competition Update for 2024. This sets out recent developments in the audit market alongside the FRC's evolving approach to audit market competition. By way of reminder, the King's Speech in July 2024 reignited the audit and corporate governance reform agenda, including in relation to audit competition and quality as well as oversight (for more, see AGC Update – Issue 54, Item 1).

Recent developments in the audit market

The report underscores the dominance of the Big Four audit firms as they earnt 98 per cent of FTSE 350 audit fees and 90 per cent of all public interest entity (PIE) audit fees in 2023. Challenger firms' share of FTSE 350 audit engagements increased to 13 per cent in 2023 (2022: 11 per cent).

In 2023, 23 FTSE 350 companies changed their auditor. Approximately 87 per cent switched from one Big Four firm to another Big Four firm. 

Total PIE audit fees earned by UK audit firms in 2023 was £1.4 billion, most of which (94 per cent) were fees for audits of FTSE 350 companies.

All the largest audit firms had higher income growth from their audit work than from their non-audit work between 2022 and 2023. Among the largest audit firms, Deloitte had the largest income growth from audit work, with a 24 per cent increase since 2022 and Grant Thornton had the lowest, with a 15 per cent increase on the previous year.

The evolving approach to competition

The FRC states that it is evolving its approach to audit market competition, addressing stakeholder concerns such as differences in quality between the largest and smaller audit firms. Its approach focuses on ensuring that good-quality audit services are accessible to UK companies of all sizes to support their access to capital and growth.

In the last year, the FRC progressed a number initiatives to enhance the functioning of the whole audit market such as supporting the operational separation of the audit and non-audit practices of the Big Four and supporting smaller firms to develop and maintain audit quality as they grow.

Modern Slavery Act

14. UK Modern Slavery Law: Change Around the Corner

In October 2024, the House of Lords Committee on the Modern Slavery Act 2015 (Select Committee) published a report outlining that the UK has fallen behind internationally in combatting modern slavery. Of particular interest to businesses, the Select Committee recommended the introduction of legislation requiring organisations to conduct modern slavery due diligence in their supply chains. Such legislation would align the UK more closely with international developments in this area such as the EU's Corporate Sustainability Due Diligence Directive.

You can access our briefing which looks at the key recommendations from the Select Committee report on supply chain due diligence, changes to the Modern Slavery Act 2015 (MSA 2015) statement regime and import bans, here.

More recently, the government has published its response to the Select Committee's report in which it explains that:

• MSA register: The Home Office is planning further improvements to the government-run modern slavery statement register, including consulting on a data dashboard to provide more information to the public.
• MSA guidance: The Home Office is also working with stakeholders to update the MSA 2015 section 54 statutory guidance.
• Penalty regime: The government is considering how to strengthen penalties for non-compliance with supply chain requirements noting that legislative change would be required. The government will set out next steps more broadly in due course.

Further updates on this important issue will follow in the New Year. 

Privilege and the Shareholder Rule

15. Is this the end of the Shareholder Rule? 

Last week, Mr Justice Picken decided that an English legal principle that has existed for over 135 years - the 'Shareholder Rule' - does not in fact exist. Although a first instance decision and highly likely to be appealed, it has significant implications for shareholder litigation and the ability for lawyers to advise corporate clients in the knowledge that their advice remains privileged.

The operation of the Shareholder Rule can often cause practical issues for companies seeking advice on issues which are becoming contentious with a shareholder, with companies sometimes not appreciating that there is a good chance that the advice they are seeking is not in fact privileged against its shareholders, even in subsequent litigation or arbitration against that shareholder.

For more background on the Shareholder Rule, the consequences of the decision and what might happen next, see our update here.

Equity Capital Markets

16. FCA consults on PISCES sandbox arrangements 

As signalled in AGC Update - Issue 59, Item 14, the FCA has published its consultation on the proposed regulatory framework for the Private Intermittent Securities and Capital Exchange System (PISCES) - a new type of trading platform that enables intermittent trading of private company shares using market infrastructure. This follows the publication in November of the draft Statutory Instrument that will establish PISCES as a financial markets infrastructure sandbox. Within the draft legislation, the FCA is empowered to make rules to implement and operate the sandbox arrangements; this consultation contains the FCA's proposed rules and guidance for the PISCES sandbox.

It is expected that Treasury will deliver the PISCES legislative framework by May 2025, after which the FCA will publish its final rules for the PISCES sandbox.

Responses should be submitted by 17 February 2025.

Authors: Will Chalk, Partner; Rob Hanley, Partner; Becky Clissman, Counsel, Marianna Kennedy, Senior Associate; Vanessa Marrison, Expertise Counsel, Shan Shori, Expertise Counsel