The FCA has published its 12th quarterly consultation paper.

The FCA is proposing the following changes to the Listing Rules, the Disclosure Rules and Transparency Rules and the Prospectus Rules:

  • to modify the LR to make the link between the definition of a reverse takeover in LR 5 and the aggregation provisions in LR 10 clearer. The aim is to ensure that transactions cannot be artificially broken up to avoid being classified as a reverse takeover. This is in line with the FCA’s policy that it will consider the substance of a transaction over its legal form. Therefore, it is proposing to amend LR 5.6.4R to state that issuers must apply the aggregation provisions in LR 10.2.10R, in addition to the class tests, when calculating the percentage ratio of a transaction.
  • to amend the DTR to implement a prescribed reporting format for the annual reports on payments to governments prepared under the Transparency Directive (2004/109/EC) (TD) in accordance with DTR 4.3A. (This relates to issuers who are active in the extractive or logging of primary forest industries who are required to prepare an annual report on payments made to governments in the countries in which they operate.)

The FCA considers that there is a clear benefit to requiring a report under the TD to be prepared in XML format which uses the same data schema as is required under the Accounting Directive. This will ensure that issuers who fall within scope of both the AD and TD reporting requirements can prepare a report which meets the requirements of both Directives in one format. For those issuers who are not required to use the reporting format prescribed in the UK for the AD reports on payments to governments, the introduction of a prescribed reporting format for the TD reports on payments to governments will impose an additional administrative burden. However, to achieve a level playing field and comparability of reporting the FCA proposes prescribing the reporting format for all TD issuers who are required to prepare a report on payments to governments.

  • to amend the PR to reflect further European Securities and Markets Authority (ESMA) publications. In particular, the FCA is proposing to update the list of documents in PR 1.1.6G that need to be considered together when determining the effect of the Prospectus Directive. This will reflect that there are now four ESMA opinions regarding the PR.

The consultation closes on 18 May 2016.