Quarterly Listed Company Update – What's new and what's next?

As a reminder, the new UK Listing Rules, which came into effect last July, require issuers to provide the FCA with up-to-date contact details for at least two of its executive directors or, if there are no executive directors, at least two directors, by 29 January 2025.

The form is available here. Completed forms should be posted to the address noted in the form or emailed to listingapplications@fca.org.uk.

In November 2024, the FCA published Primary Market Bulletin 52 which provides some helpful guidance for issuers on inside information and investor meetings, further details of which are set out in our client note. In December 2024, Primary Market Bulletin 53 was published which summarises the updates being made to the FCA's Knowledge Base to reflect the updated Listing Rules and other recent changes.

On 26 November 2024, the FRC published its penultimate annual Review of Corporate Governance Reporting examining reporting under the UK Corporate Governance Code 2018 (the "Code"), as companies prepare to transition to the revised UK Corporate Governance Code 2024 (the "Revised Code"). The FRC considered that the overall quality of reporting by FTSE 350 and Small Cap companies remains strong. There remains a need for more concise and outcomes-focused disclosure, which is a key aim of the Revised Code, and enhanced reporting on risk management and internal controls. The FRC also identified the following areas for improvement: the quality of explanations provided by companies departing from the Code, reporting on the effectiveness of risk management and internal control systems and the quality of reporting on shareholder engagement. The FRC was generally pleased with the reporting on principal risks, stakeholder engagement and director 'over-boarding'. Some companies demonstrated early adoption of the FRC's minimum standards for audit committee reporting, referenced in the Revised Code. 

On 27 November 2024, the FCA announced the imposition of a £123,500 fine on András Sebők, a former senior manager at Wizz Air Holdings plc. The fine was for trading in the company's shares on 18 separate occasions during closed periods before the announcement of financial results in breach of Article 19(11) Market Abuse Regulation ("MAR") and failing to notify Wizz Air and the FCA of 115 transactions in Wizz Air shares in breach of Article 19(1) MAR. It is the first time a person discharging managerial responsibilities has been fined for dealing during a closed period. In relation to the Article 19(11) MAR breach, Mr Sebők's failure to notify Wizz Air of the trades resulted in the company being unable to announce the transactions to the market in a timely manner. The company was also unable to approve or reject the personal account dealing because Mr Sebők did not adhere to the requirement for prior authorisation in Wizz Air's internal share dealing code.

The FCA announced, on 25 November 2024, that it had fined Barclays £40 million in total for breaches of the Listing Rules. The fine relates to two capital raisings by Barclays in 2008, both of which included certain Qatari entities as key investors. Barclays failed to disclose certain arrangements with these key investors. More specifically, Barclays entered into advisory agreements (the "Agreements") with Qatar Holdings LLC at the same time as the capital raisings but failed to the disclose the fees to be paid under the Agreements and their connection to the Qatari entities’ participation in the capital raisings. This ultimately resulted in Barclays sending circulars to its shareholders which did not contain all the information necessary to allow the shareholders to make a properly informed decision as to the voting action required of them. Further, the FCA also determined that Barclays failed to take reasonable care to ensure that information in announcements and prospectuses was not misleading, false or deceptive and did not omit anything likely to affect the import of such information and that it failed to act with integrity towards Barclays' actual and potential shareholders, in breach of the Listing Principles.

The Economic Crime and Corporate Transparency Act 2023 introduced a new 'failure to prevent fraud' offence ("FTPF Offence"). Under the FTPF Offence, which will come into force on 1 September 2025, organisations which lack reasonable fraud prevention procedures can be held criminally liable if an employee, agent, subsidiary or other "associated person" commits fraud with the intention of benefitting the organisation. On 6 November 2024, the Home Office published guidance in relation to the FTPF Offence, which provides some recommended procedures that organisations can put into place to prevent fraud and to avail themselves of a defence if a FTPF Offence occurs. For further details on the FTPT Offence, see our client briefing.

On 22 November 2024, the Pre-Emption Group published a report which examines adoption of the Pre-Emption Group's November 2022 Statement of Principles (the "Revised Principles") in relation to the disapplication of pre-emption rights by FTSE 350 companies for annual general meetings held between 1 August 2023 and 31 July 2024. In general, the report highlights growing confidence in the Revised Principles with 67.1% of FTSE 350 companies seeking enhanced disapplication authority compared to 55.7% in the previous year. In addition, 64.1% requested authority for a specified capital investment (compared to 65.7% in the previous year) and 99.4% had all disapplication resolutions passed by shareholders (compared to 98.3% in the previous year) with an average of only 4.7% votes against.

Following legislation (the "Regulations") laid before Parliament on 10 December 2024, revisions to company size thresholds that determine non-financial reporting requirements under the Companies Act 2006 come into force from 6 April 2025. The rationale behind the revisions is to take account of inflation since financial thresholds for company size classifications were last set in 2013. The Regulations will achieve this by increasing by around 50% the annual turnover and balance sheet thresholds for classification as a micro-entity, small or medium-sized company in relation to financial years beginning on or after 6 April 2025. Amendments to the thresholds for large companies will not be made. The increased thresholds will also apply to limited liability partnerships. Separately, the Regulations remove several reporting requirements for Directors' Reports contained in annual reports. These relate to those that overlap with other reporting requirements or provide little material value to investors and other users of annual reports.

ISS and Glass Lewis have each recently published updated proxy voting guidelines for 2025. We have summarised the key changes made to the 2024 guidelines below.

Updates to ISS Proxy Voting Guidelines

The updates below apply for shareholder meetings held on or after 1 February 2025:

• The guidelines clarify that the FCA requirement is for listed companies to report against gender and ethnic diversity targets, rather than meet them.
  
  
• References to "premium" and "standard" listings have been replaced with the new UKLR single "equity shares (commercial companies)" category.
  
  
• Changes have been made to reflect The Investment Association's updated Principles of Remuneration, which include additional guidance for the disclosure of malus and clawback provisions (for further information on the IA's updated Principles of Remuneration, see our Q&A document).
  
  
• The Capital Requirements Directive section has been removed to reflect that UK banks and investment firms are no longer be subject to the variable-to-fixed remuneration cap.
  
  
• An update has been made to recognise a new version of the QCA Corporate Governance Code, including the recommendation to put remuneration reports and remuneration policies (should a binding vote not be mandated) to annual advisory shareholder votes.

Updates to Glass Lewis Proxy Voting Guidelines

The key updates that Glass Lewis has made for 2025 are below:

• The policy on director tenure has been updated to include consideration of the rationale for extending a board chair's tenure beyond nine years on a case-by-case basis.
  
  
• Glass Lewis will now generally recommend against the re-election of the chair of the nomination committee:
  • at main market boards where that board has failed to appoint at least two gender diverse directors; and
  • at FTSE 350 boards where that board has failed to appoint at least one ethnically diverse director.

On 18 December 2024, the FRC, as the secretariat to the UK Sustainability Disclosure Technical Advisory Committee (the "TAC"), published the TAC's recommendations to the UK Government in relation to the first two IFRS Sustainability Disclosure Standards (S1 and S2) that were published in 2023 by the ISSB. Having technically assessed both standards, the TAC recommended endorsement of them as a basis for the UK Sustainability Reporting Standards (the "UK SRS"), with some minor amendments. The Government will now consider the recommendations and a decision on endorsement, together with a consultation on drafts of the UK SRS are expected in Q1, following which the FCA can consult on reporting requirements for listed companies.