Newsflash – FCA publishes guidance for companies in the light of Covid-19

March 2020

The Financial Conduct Authority (FCA) has published a special edition of its Primary Market Bulletin 27 – Coronavirus update. This lays out some of the FCA’s expectations of issuers at the moment, including what they need to prioritise.

This is a rapidly-moving situation and the FCA continues to liaise with the FRC, PRA, BEIS and others regarding other actions that may need to be taken.

Topics included in the Primary Market Bulletin are:

  • Ongoing disclosure under the Market Abuse Regulation (MAR)
  • Market volatility and suspension of trading
  • The importance of transaction notifications
  • Delays in corporate reporting
  • Shareholder meetings
  • Corporate transactions and admissions

Ongoing disclosure under the Market Abuse Regulation
Regarding ongoing disclosures, the FCA highlights that directors should be aware that their company’s own operational response to coronavirus may itself meet the requirements for disclosure to the market under the Market Abuse Regulation. Directors should carefully consider disclosure requirements.

Market volatility and suspension of trading
The FCA provides a reminder of the importance of using announcements to the market in preference to requests for suspension where possible. It includes the details of the contact details for the Primary Market Monitoring team should a suspension be needed.

The importance of transaction notifications
Individuals who may be required to report transactions are reminded that the requirements persist and about the relevant contact details.

Delays in corporate reporting
The FCA recognises the challenges faced by companies and highlights that it expects issuers to put in place contingency plans to minimise the impact of logistical issues. It provides an example that “non-essential” parts of the annual report and the reporting cycle could be deprioritised.

If the required legal timetable for public reporting is unlikely to be met, the FCA advises issuers to:

  • Take appropriate advice
  • Contact the FCA to discuss
  • Engage with the company’s auditor (which itself should contact the FRC if appropriate)

The FCA highlights that the deadlines under the Disclosure Guidance and Transparency Rules - that annual financial reports must be made public by four months after the end of each financial year and that half-yearly financial reports must be made public by 3 months after the period end - have not changed.

Shareholder meetings
The FCA highlights that as a result of coronavirus, AGMs may need to involve the use of virtual methods, and that this is particularly relevant for premium listed companies that are required to engage with shareholders on certain matters.

Guidance on options for company AGMs in light of the spread of Covid-19 has been published this week. The guidance note explores five options for AGMs and encourages companies to work on contingency plans. It includes helpful consideration points for these plans as well as information about the legal status of each of the five options, reflecting current UK company law and associated regulation. The guidance note has been prepared by ICSA and Slaughter & May with the support of the FRC, GC100, Investment Association and the QCA.

Corporate transactions and admissions
The FCA will continue to review these in line with established principles.

Primary Market Bulletin 27 can be found here.

Guidance Note on AGMs and the impact of Covid-19 can be found here.

In addition to publishing this Bulletin, the FCA has put back the timetable for certain of its consultations and research. The new deadline for responses to the consultation on proposals to enhance climate-related disclosures is 1 October 2020.

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