UK Quoted Company Newsletter Q4 2024
17 January 2025
Introduction
Welcome to the most recent edition of our UK quoted company newsletter, the aim of which is to collate and highlight relevant legal, regulatory and topical developments that we have written about primarily in the final quarter of 2024.
Annual General Meetings
1. 2025 AGM and reporting season: what to expect?
Our annual briefing summarises the key developments to be aware of when preparing for 2025 annual general meetings and compiling the narrative aspects of annual reports. It is aimed principally at UK incorporated listed companies. It also covers material developments for AIM companies and large private companies. Horizon scanning and links to relevant 2024 publications are also included.
Please click here to access the briefing.
2. ISS 2025 proxy voting guideline updates
Institutional Shareholder Services published updates to its UK and Ireland proxy voting guidelines for 2025 with amendments made in the following areas: gender and ethnic diversity; listing regime review; remuneration; and AIM and the 2023 QCA Code. The updates will be apply to shareholder meetings held on or after 1 February 2025.
For more information please see article 1 of AGC 60 (24/12/24).
3. Glass Lewis 2025 proxy voting guidelines
Glass Lewis published its 2025 proxy voting policy guidelines for the UK, which include new sections on multi-class or dual-class share structures and special purpose acquisition vehicles. The guidelines also clarify existing policies relating to virtual shareholder meetings, restricted share plans, annual bonus deferrals, executive remuneration, proxy voting results and conflicts of interest.
For more information please see article 4 of AGC 59 (5/12/24).
4. Pre-Emption Group monitoring report
The Pre-Emption Group published its second annual report, which examines the implementation of the 2022 Statement of Principles in disapplying shareholder pre-emption rights by FTSE 350 companies at AGMs held between 1 August 2023 to 31 July 2024.
For more information please see article 3 of AGC 59 (5/12/24).
5. ISS 2025 benchmark voting consultation
Institutional Shareholder Services published a consultation seeking feedback on proposed changes to its international voting policies for use in the 2025 AGM season including policy changes concerning remuneration and board diversity.
For more information please see article 5 of AGC 59 (5/12/24).
6. LAPFF letter calling for climate strategy vote in FTSE 100
The Local Authority Pension Fund Forum wrote to the chairs of 76 FTSE 100 companies that had not held a vote on their climate transition plans in the past three years, setting out its expectations ahead of the next AGM season.
The letter noted that investors expect companies to set out credible transition plans that contain Paris-aligned targets and detailed strategies for achieving those goals.
For more information please see article 8 of AGC 56 (3/10/24).
Corporate Reporting
7. FRC annual review of corporate reporting
The Financial Reporting Council published its annual review of corporate reporting for 2023/2024 which sets out the findings of its monitoring of UK companies' annual reports and accounts alongside its expectations for the forthcoming reporting season. The FRC expects directors to apply careful judgment in the preparation of annual reports and will only ask a substantive question where it appears that there is, or may be, a material breach of the relevant reporting requirements.
For further information, including the FRC's key expectations for 2024/25 reports, please see article 4 of AGC 56 (3/10/24).
8. FRC annual review of corporate governance reporting
The Financial Reporting Council published its annual review of corporate governance reporting for 2024 which showcases examples of good reporting and explore areas for improvement as companies prepare to implement and report against the 2024 UK Corporate Governance Code.
Our detailed briefing on the review and its key recommendations is available here.
For more information please see article 1 of AGC 59 (5/12/24).
9. Updated government guidance on payment practices reporting
The Department of Business and Trade published updated guidance on the payment practices reporting regime requiring 'large' UK companies and LLPs to report on their payment practices, policies and performance. Entities within the scope must produce a report every six months on their payment practices and submit the report to a government website for publication. The updated guidance reflects the additional reporting requirements introduced by the Reporting on Payment Practices and Performance (Amendment) Regulations 2024 (for more detail, see AGC Update, Issue 53).
For further information please see article 7 of AGC 56 (3/10/24).
10. Revised payment practices regulations
The government published a revised draft of the Reporting on Payment Practices and Performance (Amendment) (No 2) Regulations 2024 and an accompanying explanatory memorandum. The regulations amend existing law to require qualifying companies and LLPs to publish information about their payment practices and policies in relation to retention clauses in any construction contracts with suppliers. The regulations are expected to come into force on 1 March 2025 and apply in respect of financial years beginning on or after 1 April 2025.
For further information please see article 4 of AGC 57 (22/10/24).
11. FRC second report on quality of Wates Principles reporting
The Financial Reporting Council published a second report on the quality of corporate governance reporting by private companies (including such subsidiaries of quoted companies) that apply the Wates Corporate Governance Principles for Large Private Companies. The report seeks to demonstrate where companies may be able to improve reporting to offer additional insight or clarity on their governance activities.
For further information, including the FRC's key expectations for 2024/25 reports, please see article 5 of AGC 56 (3/10/24).
12. Regulations reducing reporting burdens
The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 were published (together with an explanatory memorandum), marking the next stage in the government's de-regulatory agenda (commenced under the previous administration). The regulations remove several reporting requirements from the directors’ report for relevant companies and adjust accounting thresholds to enable more companies to benefit from lighter touch financial and non-financial reporting requirements.
For more information please see article 7 of AGC 60 (24/12/24).
Corporate Governance
13. New code of conduct for directors
The Institute of Directors published its new voluntary code of conduct for directors which is intended to serve as a framework to guide directors in making ethical decisions and promoting high standards of leadership across entities of all sizes in the private, public, and not-for-profit sectors.
For more information please see article 3 of AGC 58 (12/11/24).
14. AIC updated version of code of governance
The Association of Investment Companies published an updated version of its code of governance for investment companies, which reflects the publication of, and incorporates many of the relevant changes to, the updated 2024 UK Corporate Governance Code. You can find our overview of the principal differences between the 2024 UK Code and the 2018 version here; our overview of the related updated Guidance on Board Effectiveness is available here.
For more information please see article 1 of AGC 56 (3/10/24).
15. UK modern slavery law update
In October 2024, the House of Lords Committee on the Modern Slavery Act 2015 published a report on the impact and effectiveness of the Modern Slavery Act 2015. The report notes that the UK has fallen behind internationally in combatting modern slavery and recommends the introduction of legislation requiring organisations to conduct modern slavery due diligence in their supply chains. Our briefing on the key recommendations of the Select Committee report is available here. More recently, the government has published its response to the Select Committee's report.
For more information please see article 5 of AGC 58 (12/11/24) and article 14 of AGC 60 (24/12/24).
16. FRC public consultation on stewardship
The Financial Reporting Council published a consultation on proposed changes to the UK Stewardship Code 2020 with the aim of streamlining reporting requirements and reducing burdens for signatories.
For more information please see article 2 of AGC 59 (5/12/24).
17. Investment Association revised remuneration principles
The Investment Association published a revised version of its principles of remuneration after responding to concerns that the previous version and accompanying guidance was too prescriptive, making it difficult for companies with a global presence to attract top executives.
For further information please see article 1 of AGC 57 (22/10/24).
18. Audit market competition update
The FRC published its annual audit market and competition update for 2024, which sets out recent developments in the audit market alongside the FRC's evolving approach to audit market competition.
For more information please see article 13 of AGC 60 (24/12/24).
Rules and Regulation
19. UKLRs - requirements for listed issuers
For listed issuers, a number of new requirements under the UK Listing Rules (UKLRs) will apply as of 30 January 2025. This follows a six month transitional period further to the entry into force of the UKLRs on 29 July 2024.
For more information about the new requirements please click here.
20. FCA Primary Market Bulletin 51
The Financial Conduct Authority published Primary Market Bulletin 51 in which it explained changes made to formal guidance contained in the FCA's Technical Notes on both sponsor and non-sponsor related topics to reflect the new listing regime. The new listing regime came into effect in July 2024 following the publication of FCA Policy Statement 24/6 and the final form of the new UK Listing Rules. See our update here.
For more information please see article 2 of AGC 56 (3/10/24).
21. FCA Primary Market Bulletin 52
The Financial Conduct Authority published Primary Market Bulletin 52 in which it focused on certain issuer obligations under the UK Market Abuse Regulation. For more detail, please access our update here.
For more information please see article 13 of AGC 59 (5/12/24).
22. FCA Primary Market Bulletin No 53
The Financial Conduct Authority published Primary Market Bulletin 53 in which it focused 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.
For more information please see article 5 of AGC 60 (24/12/24).
23. Senior executive fined for share dealing during closed period
The Financial Conduct Authority published a Final Notice and announced that it had fined a former senior manager of an aviation business for trading in the company's shares on multiple occasions during closed periods before the announcement of financial results, in breach of Article 19(11) Market Abuse Regulation (EU) No 596/2014.
For more information please see article 15 of AGC 59 (5/12/24).
24. FCA consultation on handbook changes
The FCA 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 Handbook to reflect the 2024 iteration of the UK Corporate Governance Code.
For more information please see article 3 of AGC 60 (24/12/24).
25. Prospectus regulation reform in the UK and EU
Rules for the new public offers and admissions to trading regime, which will replace the UK Prospectus Regulation, are expected to be finalised by the end of H1 2025, subject to feedback and the approval of the FCA Board. Further proposals were put forward in FCA Consultation Paper 24/12 - Consultation on the new Public Offers and Admission to Trading Regulations Regime.
In parallel, the EU capital markets landscape was subject to an important reform process, culminating with the adoption of the EU Listing Act – a legislative package designed to make EU capital markets more attractive and accessible.
For more information please see article 9 of AGC 58 (12/11/24).
26. 2025 dividend procedure timetable
The London Stock Exchange published its 2025 Dividend Procedure Timetable.
For more information please see article 2 of AGC 56 (3/10/24).
27. Government signals upcoming corporate reforms
The Department for Business and Trade published a Green Paper setting out its vision for the UK's modern industrial strategy which also indicated accompanying company law reforms to corporate re-domiciliation, corporate reporting, non-financial reporting, virtual AGMs and capital matters.
For more information please see article 4 of AGC 58 (12/11/24).
28. Employment rights reform
The Employment Rights Bill was published and includes the most radical overhaul of employment rights in decades. This article from our Employment Team sets out the details of the Bill's key provisions and the potential impact for employers.
For further information please see article 2 of AGC 57 (22/10/24).
29. EHRC guidance on sexual harassment and harassment at work
The Equality and Human Rights Commission published updated guidance on sexual harassment and harassment at work, specifically addressing the new duty on employers to take reasonable steps to prevent sexual harassment in the workplace.
This article from our Employment Team sets out further detail.
For further information please see article 3 of AGC 57 (22/10/24).
Corporate Transparency
30. Government guidance on preventing fraud
The UK government published the long-awaited guidance on the 'failure to prevent fraud offence' in the Economic Crime and Corporate Transparency Act 2023. The offence applies to all UK companies, limited liability partnerships and limited partnerships that meet the statutory test for being a "large" organisation (meeting at least two out of the following three criteria: more than 250 employees; more than £36 million turnover; or more than £18 million in total assets).
The offence will mean that in-scope organisations can be held criminally liable and exposed to a potentially unlimited fine where an employee, agent, subsidiary or other 'associated person' acting on its behalf commits fraud intending to benefit the organisation.
For more information please see article 1 of AGC 58 (12/11/24).
31. Companies House guidance on civil penalties and enforcement policy
The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 enable the Registrar of Companies to impose financial penalties for many offences under the Companies Act 2006 as an alternative to commencing criminal proceedings. Companies House published guidance on its approach to issuing financial penalties, and the statutory procedure that it will follow in doing so, including the issue of prior warning notices and the timeframes for making representations.
For more information please see article 6 of AGC 56 (3/10/24).
32. Companies House ECCTA transition plan
Companies House published an outline transition plan in connection with the reform of its role following the enactment of the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The plan includes an intended timetable for the remainder of the ECCTA reforms.
For further information please see article 6 of AGC 57 (22/10/24).
33. Other ECCTA developments
Draft regulations were made to ensure that further amendments made by ECCTA to company law will also apply in a modified way to LLPs.
New draft regulations were also issued giving Companies House the power to allocate unique identifiers. (UID regulations) to individuals associated with other business entities such as LLPs and limited partnerships, ensuring that identity verification operates effectively for such entities as well as for companies.
Revised draft regulations were also published extending the circumstances in which individuals, such as directors or PSCs, may apply to protect their usual residential addresses.
For more information please see article 2 of AGC 58 (12/11/24).
34. UK corporate re-domiciliation report
A government commissioned independent expert panel published its report on UK corporate re-domiciliation, a process permitting a company incorporated in one jurisdiction to become a company incorporated in another jurisdiction whilst retaining its legal personality. The panel strongly supports the introduction of a two-way re-domiciliation regime to allow non-UK registered corporate bodies to become UK companies, and UK companies to re-domicile overseas.
For further information please see article 9 of AGC 57 (22/10/24).
ESG
35. UK sustainability disclosure requirements come a step closer
The Financial Reporting Council, as the secretariat to the UK Sustainability Disclosure Technical Advisory Committee, published the Committee’s recommendations to the Secretary of State for Business and Trade on endorsement of the first two IFRS Sustainability Disclosure Standards (S1 and S2) that were published in 2023 by the International Sustainability Standards Board. 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).
For more information please see article 9 of AGC 60 (24/12/24).
36. IFRS sustainability reporting standards
The IFRS Foundation published a guide for companies that are voluntarily applying the International Sustainability Standards Board sustainability reporting standards S1 and S2 which cover general disclosures and climate-related disclosures respectively.
For more information please see article 9 of AGC 56 (3/10/24).
The IFRS published guidance to support the implementation of its sustainability disclosures standard S1. For more information about the ISSB standards, see Disclosures required under the IFRS's Sustainability Disclosure Standards (ISSB S1 and S2).
For more information please see article 10 of AGC 59 (5/12/24).
37. European Commission FAQs on sustainability reporting
The European Commission published a set of frequently asked questions on sustainability reporting under the Corporate Sustainability Reporting Directive and the Sustainable Finance Disclosure Regulation.
For more information please see article 11 of AGC 59 (5/12/24).
38. Sustainability reporting assurance
The Financial Reporting Council published its initial feedback from its March 2024 market study into sustainability reporting assurance, exploring how the market for sustainability assurance is functioning and developing in the UK.
For further information please see article 8 of AGC 57 (22/10/24).
39. Government response to regulation of ESG ratings providers
The government published a response to its consultation (see our briefing here) on a regulatory regime for ESG ratings providers.
For more information please see article 8 of AGC 59 (5/12/24).
40. EU initiates corporate sustainability infringement proceedings
The European Commission commenced infringement procedures against 17 Member States that have yet to transpose the Corporate Sustainability Reporting Directive ((EU) 2022/2464) (CSRD) into national law. The deadline for member states to transpose the Directive was 6 July 2024.
For further information please see article 7 of AGC 57 (22/10/24).
41. Reporting for non-EU groups on CSRD
The European Financial Reporting Advisory Group 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.
For more information please see article 12 of AGC 60 (24/12/24).
42. Scaling transition finance
The Transition Finance Market Review (TFMR) published a report providing recommendations to scale transition finance. The TFMR was set up to consider what the UK financial and professional services ecosystem needs to do to become a leading hub for transition financial services (see AGC Update Issue 48).
For more information please see article 6 of AGC 58 (12/11/24).
43. TNFD guidance on nature transition planning
The Taskforce on Nature-related Financial Disclosures published a discussion paper outlining draft guidance for corporates and financial institutions on developing and disclosing nature transition plans.
For more information please see article 7 of AGC 58 (12/11/24).
44. IFRS progress reports on corporate climate-related disclosures
The International Financial Reporting Standards Foundation published a report on progress on corporate climate-related disclosures, which considers companies’ adoption of standards issued by the International Sustainability Standards Board.
For more information please see article 6 of AGC 59 (5/12/24).
Corporate Cases
45. Acquisitions: interpretation of material adverse effect condition
In a recent case the High Court found that a buyer was not discharged from its obligation to complete the acquisition of a company by the terms of a no material adverse effects condition in the share purchase agreements governing the transaction.
For more information please click here and read article 1.
Other Ashurst Q4 20024 Publications
A selection of a few other Ashurst publications published in the third quarter of 2024 are accessible below.
Corporate
46. Ashurst and Practical Law Corporate Update Q4 2024 (16/1/24)
This briefing features a selection of articles first published in Q4 2024 in the company law section of PLC Magazine, the leading monthly magazine for business lawyers advising companies in the UK.
Debt Capital Markets
47. EU Prospectus Regulation Revised (19/11/24)
On 14 November 2024 an amending Regulation was published in the Official Journal as part of the EU's "Listing Act" package. Amongst other things, the Regulation makes important amendments made to the EU Prospectus Regulation which are highlighted in our briefing.
Dispute Resolution
48. Privilege under English law (19/12/24)
This guide provides an overview of the principles governing the ability of a party to keep communications with its lawyer confidential under the English law of privilege. It reviews the main heads of privilege which can be claimed, how privilege can be lost, and how to ensure that communications that are privileged, stay privileged.
