The Financial Conduct Authority (FCA) has published its ninth quarterly consultation paper (CP 15/19) in which it proposes to amend:

  • certain sections of its Handbook to reflect the new UK Corporate Governance Code 2014 (2014 Code); and
  • other miscellaneous provisions in the Listing Rules (LRs) and the Disclosure and Transparency Rules (DTRs).

Click here to read CP 15/19 or read on for the key points to note.

UK Corporate Governance Code

The FCA proposes to amend the LRs (and other Handbook references) to reflect the latest edition of the 2014 Code which was published by the Financial Reporting Council in September 2014. The 2014 Code applies to reporting periods beginning on or after 1 October 2014. The proposed amendments include:

  • an updated definition of the 2014 Code in the Glossary;
  • redrafting LR 9.8.6(3)R so that an issuer is required to include in its annual financial report statements by the directors of the appropriateness of adopting the going concern basis of accounting and the longer term viability of the company, as is now required under the 2014 Code. Consequently, it is proposed that the relevant LRs are amended so that the issuer must ensure that the auditors review the updated statements; and
  • transitional provisions which clarify that for the relevant entities with an accounting period ending on or before 30 September 2015, the existing LR provisions will apply.

Scientific research based companies

The FCA has identified certain inconsistencies in the drafting of certain LRs which apply concessions to the eligibility requirements for scientific research companies seeking a premium listing. Several amendments have been made to remove any ambiguities including:

  • drafting amendments to clarify how a scientific research company could satisfy the existing 'concession' requirements for those companies that do not have published or filed three-year financial records;
  • a minor amendment to clarify that the requirement that historical financial information must represent at least 75% of the new applicant's business for the full period also applies to scientific research companies for the reduced period that is covered by the published or filed historical financial information since the inception of the applicant's business.

Headline codes for primary information providers

DTR 8, Annex 2 sets out headlines codes that must be used by FCA approved primary information providers when disseminating regulated information. The FCA has reviewed the headline codes and is proposing a number of minor amendments, together with new headline codes to meet stakeholder demand.

Electronic settlement compatibility

The EU Central Securities Depositaries Regulations (CSDR), which came into force in September 2014, requires that relevant securities that are the subject of transactions on a trading venue must be recorded in book-entry form and consequently, must be capable of being settled in dematerialised form. This requirement is applicable to both premium and standard listed issuers. Currently, the equivalent requirement in the Listing Rules applies to premium listed issuers only. As the FCA considers that CSDR supercedes the same requirements in the LRs, and in order to clarify that CSDR will apply to both premium and standard listed issuers, the FCA is proposing to delete the equivalent requirements in the LRs.

Next steps

Responses to the consultation must be submitted to the FCA by 5 August 2015.