In our round-up, we summarise the recent key developments in domestic and European regulation affecting the UK equity capital markets.
Proposed new AIM Rules for companies and Nomads
On 27 January 2014, the London Stock Exchange (LSE) published AIM Notice 38, which announced its consultation on proposed changes to the AIM Rules for Companies and the AIM Rules for Nominated Advisers. Many of the changes deal with minor administrative matters, but there are some substantive points to note. Click here for a summary of the key proposals.
FCA publishes consultation on sponsor competence and other changes to the Listing Rules and Prospectus Rules
On 30 January 2014, the Financial Conduct Authority (FCA) publishedconsultation paper CP 14/2 which sets out proposals to amend the Listing Rules in relation to sponsor competence, including the proposed introduction of a new Procedural note and Technical note in the UKLA Knowledge Base. In addition, the FCA proposes to introduce new Prospectus Rules to make it clear that an applicant is responsible for submitting a compliant and factually accurate prospectus. Responses to the consultation are requested by 30 April 2014. The FCA has noted that it expects to publish its feedback in the last quarter of 2014. We will cover the consultation in more detail in next month's corporate newsletter.
New UKLA administration fee for late filing of financial reports
In December 2013, the FCA published its quarterly consultation paper 13/18 (QCP), which, amongst other things, proposed a charge of £250 to be imposed on issuers for the late filing of their financial reports pursuant to their obligations under the Disclosure and Transparency Rules. The charge is intended to recover administration costs incurred by the UKLA in dealing with late filing of periodic financial reports, which to date are absorbed by the fees paid by all issuers, rather than those issuers which are generating the work. The new charge would be added to the application and administrative fees in relation to Listing Rules in FEES 3 Annex 4. It would come in to effect from 1 April 2014. Section 3 of the QCP outlines the proposal. Responses must be received by 6 February 2014.
Consequential changes to the Listing Rules take effect following implementation of the new reporting regulations
On 13 December 2013, the FCA published its Policy Statement 13/11, which sets out the final version of the consequential changes to the Listing Rules resulting from the BIS Directors' remuneration reporting regulations and narrative reporting regulations. Click here to read our article on the proposals published by the FCA on 28 August 2013 in the consultation paper CP 13/7.
The FCA has proceeded with all its proposals in CP 13/7, save for the proposed implementation date of the new Listing Rules which was originally proposed for 1 January 2014. The new Listing Rules came into effect on 13 December 2013 for listed companies with a financial year ending on or after 30 September 2013 that have not published their financial report on or before 13 December 2013. The FCA notes that companies already preparing their annual financial report in compliance with the existing Listing Rules and the new BIS Directors' remuneration reporting regulations can continue to publish that report after 13 December 2013 in compliance with both sets of requirements, if they choose to do so.
ESMA publishes updated version of its Prospectuses Q&As
On 15 January 2014, ESMA published version 21 of its Prospectuses: Q&Aswhich incorporates two new questions:
Q91: Article 24(3) of the Prospectus Regulation recognises the possibility for issuers to have an individual summary relating to several securities, provided that the securities differ only in some very limited details, such as the issue price or maturity date, and the information in respect of the different securities must be clearly segregated. Consequently, ESMA sets out two different formats of individual summaries relating to several securities which it considers acceptable.
Q92: The question queries which registration document is applicable when a listed issuer proposes to issue convertible or exchangeable debt securities where the underlying securities are the issuer's shares. ESMA clarifies that in such situations, where the underlying shares are already issued and admitted to trading on a regulated market, a debt registration document can be used.
Reforms to quarterly reporting requirements coming soon
On 5 December 2013, the Chancellor, George Osborne, delivered hisAutumn Statement. Amongst other things, the government announced its intention to introduce an element of the directive amending the Transparency Directive (2004/109/EC) in advance of the November 2015 deadline for implementation, so as to remove the requirement for listed companies to publish quarterly reports. The government plans to bring forward secondary legislation early this year to allow the FCA to implement this change following public consultation.
Introduction of the new T+2 standard settlement period
The standard settlement period is being shortened in accordance with the Central Securities Depositary Regulation which aims to harmonise EU securities settlement periods. On 2 December 2013, Euroclear UK & Ireland announced the shortening of the standard settlement cycle for the UK and Irish capital markets from T+3 (trade date plus 3 business days) to T+2 (trade date plus two business days) from 6 October 2014. Click here to read the London Stock Exchange statement, which was released on the same date which provides information regarding the impact of the shortened period on its market and trading services.