UK Quoted Company Newsletter Q2 2024

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 second quarter of 2024.

Rules and Regulation

1. FCA's final rules for a reformed listing regime

The FCA published its final rules for a new UK listing regime and Policy Statement 24/6. The new UK Listing Rules and accompanying transitional provisions will take effect from 29 July 2024. The rules follow an extensive consultation process, kickstarted by Lord Hill's UK Listing Review in 2021, which sought to enhance the attractiveness of UK capital markets.

In summary, there is a large degree of continuity flowing from the FCA's position set out in its December consultation - CP 23/31 - with some notable amendments. Importantly, the new rules retain the philosophy of a shift towards a more disclosure-based framework, whilst seeking to maintain robust levels of investor protection in key areas.

For more information please read our briefing by clicking here (11/7/24).

2. FCA knowledge base changes 

The FCA published Primary Market Bulletin 48, which addresses a number of changes to the FCA's knowledge base flowing from the proposed listing regime reforms set out in CP 23/31.

For more information please see article 1 of AGC 52 (9/5/24).

3. FCA Primary Market Bulletin 49

The FCA published Primary Market Bulletin 49, which addresses: compliance with the Listing Rules in relation to long term incentive plans; annual financial reporting - structured digital formatting; diversity disclosures under the Listing Rules; and the updated consultation timeline for ISSB Standards and transition plans.

For more information please see article 3 of AGC 53 (3/6/24).

4. Capital-raising arrangements - additional HMRC guidance

Further guidance was added to HMRC's Stamp Taxes on Shares Manual to clarify what constitutes a capital-raising arrangement for the purpose of the Finance Act 2024 exemption from the 1.5% charge to stamp duty or SDRT that otherwise applies on transfers to depositary receipt issuers and operators of clearance services. 

For more information please see article 2 of AGC 52 (9/5/24). 

Corporate Governance

5. Lightening the non-financial reporting burden 

As part of its focus on 'Smarter Regulation', the government published a consultation proposing various changes to the non-financial reporting regime in order to ease the burden on medium-sized companies.

For more information please see article 2 of AGC 53 (3/6/24).

6. CGI report on sustainability committees

The Chartered Governance Institute of UK & Ireland (CGI) published a report - Governing sustainability: Are sustainability committees the answer? - intended to support organisations across different sectors to overcome the challenges of overseeing sustainability.

For more information please see article 6 of AGC 53 (3/6/24).

Corporate Transparency

7. Companies House guidance on the register of overseas entities

Companies House published guidance on applications to remove an overseas entity from the register of overseas entities (RoE). If an overseas entity is not, or is no longer, a registered owner of relevant property or land in the UK, it can apply to be removed from the RoE.

For more information please see article 7 of AGC 52 (9/5/24).

8. Economic Crime and Corporate Transparency Act 2023

As we have previously reported, the Economic Crime and Corporate Transparency Act 2023 features significant new measures aimed at improving corporate transparency and tackling economic crime. Our most recent update highlights that the identity verification of directors and PSCs is likely to commence sometime in the first half of 2025. The update is available by clicking on the following link - AGC Update, Issue 53 (see item 1).

For previous updates please click on the following links: AGC Update, Issue 50 (see item 2), AGC Update, Issue 47 (see Item 1) and New economic crime and corporate transparency law: Key implications for UK businesses, 10/11/23.

9. Guidance for organisations considering ransom payments

The National Cyber Security Centre (NCSC) and three insurance industry bodies have produced joint guidance to help organisations faced with ransomware demands. The guidance seeks to minimise the overall impact of a ransomware incident on organisations and help reduce disruption and cost to businesses, the number of ransoms paid by UK ransomware victims, and the size of ransoms where victims choose to pay.

For more information please see article 10 of AGC 53 (3/6/24).

10. Court decision highlights money laundering risks in global supply chains

In a landmark judgment, the Court of Appeal found that the National Crime Agency's decision not to investigate cotton goods imported from the Xinjiang Uyghur Autonomous Region of China, which were allegedly produced using slave labour, was unlawful. This judgment could have a range of potentially significant consequences for businesses and the investigation of money laundering offences in the UK, which are set out in our briefing available here.

ESG

11. UK sustainability disclosure requirements and reporting standards

The UK government published an update on the implementation of the UK's Sustainability Disclosure Requirements and a policy paper containing a framework and Terms of Reference for developing UK sustainability reporting standards. 

For more information please see article 8 of AGC 53 (3/6/24).

12. TPT sector guidance on climate Transition Plans 

The Transition Plan Taskforce (TPT) published two types of sector guidance to complement the TPT Disclosure Framework, namely the 'TPT Sector Summary' and the 'TPT Sector Deep Dives'. The TPT Sector Summary provides an overview of transition plan guidance for 30 financial and real estate sectors while the TPT Sector Deep Dives provide sector-specific guidance to interpret the Disclosure Framework for seven sectors.

For more information please see article 3 of AGC 52 (9/5/24).

13. EU Corporate Sustainability Due Diligence Directive gets final approval

The EU Council formally adopted the Corporate Sustainability Due Diligence Directive which establishes a corporate environmental and human rights due diligence duty for in-scope companies operating in the EU.

For more information please see article 9 of AGC 53 (3/6/24).

14. Greenwatch briefing

We published the latest in our series of briefings focused on the issue of greenwashing from an international perspective. 

For more information please see article 7 of AGC 53 (3/6/24).

15. Payment practices reporting - construction contracts

The draft Reporting on Payment Practices and Performance (Amendment) (No 2) Regulations 2024 were published. The Regulations amend the Reporting on Payment Practices and Performance Regulations 2017 (2017 Regulations) (SI 2017/395) to require qualifying companies to publish information about their payment practices and policies in relation to retention clauses in construction contracts they have with suppliers. Similar requirements will also apply to LLPs. 

For more information please see article 5 of AGC 53 (3/6/24).

Corporate Cases

16. W&I insurance: conflict between insured obligation and policy exclusion

The Court of Appeal held that a buyer of a business failed to show that an inconsistency in a warranty and indemnity (W&I) insurance policy that it was insured under was the result of a clear drafting error which the court should correct by interpretation.

For more information please click here and read article 1.

17. Acquisitions: warranty claims contingent on final determination of earn out

The High Court held that breach of warranty claims brought by a buyer of shares against the seller were not time-barred by a contractual limitation in the share purchase agreement in circumstances where the buyer was unable to quantify the claims until an earn-out was determined.

For more information please see click here and read article 2.

18. Shareholders’ agreement: breach of exit clause

The High Court held that a minority shareholder in a company was unfairly prejudiced when the company breached an exit clause in a shareholders’ agreement requiring it to work in good faith towards a sale of the company by a specified date.

For more information please see click here and read article 3.

Other relevant Q2 20024 publications

Corporate

19. Ashurst Global Guide to Public M&A (12/6/24)

The new edition of this guide provides an introduction to the rules which apply to public M&A transactions in a range of jurisdictions, including the UK, Australia, Belgium, China, France, Germany, Hong Kong, Indonesia, Ireland, Italy, Japan, Luxembourg, Singapore, Spain and the United States. In each jurisdiction we cover how to structure and implement an offer and the key issue areas to be aware of.

20. Ashurst and Practical Law Company Q2 2024 (16/7/24)

The articles in this briefing were first published in Q2 2024 in the company law section of PLC Magazine, the leading monthly magazine for business lawyers advising companies active in the UK.

21. UK Public M&A Update Q2 2024 (16/7/24)

This briefing reviews key developments in the UK public M&A market for the second quarter of 2024 including: (i) Possible offer announcements being used tactically; (ii) Flexible structuring; and (iii) Ashurst's UK public M&A mandates.

Debt Capital Markets

22. Ashurst Quarterly Debt Capital Markets Update Q2 2024 (9/7/24)

This briefing addresses key developments in the first quarter of 2024 including: (i) UK Digital Securities Sandbox; (ii) Electronic Global Notes and Electronic Signatures; (iii) EU Prospectus Regulation; (iv) UK Sustainability Disclosure Requirements and Sustainability Reporting Standards; (iv) Commercial Paper and Certificates of Deposit – Proposals for Reform; and (v) EU Corporate Sustainability Due Diligence Directive.

Competition

23. Antitrust, Regulation & Foreign Investment Q2 2024 (16/7/24)

This newsletter recaps some of the key developments of Q2 2024 including: (i) The UK Digital Markets, Competition and Consumers Act 2024; (ii) The continued interest of regulators in competition issues in labour markets; and (iii) the UK Competition Appeal Tribunal approving a settlement distribution plan for the first time. 

24. DMCC Act: Key changes to the UK's merger control regime (18/6/24)

This briefing summarises the reforms arising from the Digital Markets, Competition and Consumers Act (DMCC Act), which includes significant changes to the UK's voluntary merger control regime. The reforms enhance the CMA's jurisdiction to review transactions, in particular so-called "killer acquisitions", while also giving the CMA and merger parties more flexibility during the investigative process. The DMCC Act also significantly increases the CMA's ability to fine undertakings for failures to comply with statutory requests, undertakings or enforcement orders.

Employment

25. What to expect following Labour winning the UK General Election (5/7/24)

This briefing addresses the Government's plans to implement a range of new employment laws. 

Finance

26. The UK Digital Securities Sandbox Takes Shape (15/4/24)

This article reports on the consultation by the Bank of England and the Financial Conduct Authority on the implementation of the Digital Securities Sandbox which supports the issuance, trading and settlement of transactions in securities using distributed ledger technology.