Following on from the Final Recommendations of the Walker Review in December 2009, the Financial Reporting Council (FRC) issued its Final Report on the review of the Combined Code together with a Consultation Paper on the proposed changes to the Code. A review of the Code was originally scheduled for 2010 but was brought forward in light of the economic climate and the Walker Review. One of the key reasons for the FRC instigating a review of the Code in parallel with the Walker Review was so that it could examine the extent to which the Walker recommendations should apply to all listed companies, rather than just the financial institutions which were the focus of the Walker Review. Alongside the Final Report, the FRC has issued a Consultation Paper on its proposed amendments to the Code – the consultation period ends on 5 March 2010.

The key outcomes of the review as regards the structure and application of the Code in the Final Report are:

  • a single Code will be maintained for all companies;
  • the Code will be renamed but the “comply or explain”approach will remain the basis of the Code;
  • a new Stewardship Code will be established for institutional investors; and
  • some amendments to the Code which, with a few notable exceptions, are mostly in tone and emphasis.  

It is proposed that the revised Code will apply to accounting periods beginning on or after 29 June 2010.

For more details please see our e-bulletin http://www.herbertsmith.com/NR/rdonlyres/0DB7D671-9D87-497A-B3A1-DC1674DC76A/13613/FRCReviewoftheCombinedCodefinalreport1Dec09.html.