HM Treasury’s Edinburgh Reforms, and in particular how the government will make its proposed changes to the existing prospectus and public offers regime, are likely to be of interest to many in-house lawyers. Publication of directives on corporate sustainability reporting and the gender balance of boards of listed companies are noteworthy too.
Edinburgh Reforms
On 9 December 2022, HM Treasury published documents forming part of the so-called Edinburgh Reforms. Firstly, an illustrative statutory instrument, Financial Services and Markets Act 2000 (Public Offers and Admissions to Trading) Regulations 2023, to show how the government will make its proposed changes to the existing prospectus and public offers regime using the powers set out in the Financial Services and Markets Bill. It covers most of the changes announced by the government in March in the outcome of its consultation on the UK prospectus regime, including those relating to:
- Its proposed new public offer architecture.
- Admissions to trading on regulated markets.
- Admissions to trading on multilateral trading facilities operating primary markets.
Secondly, a policy statement on building a smarter financial services framework for the UK that sets out its approach to the repeal of financial services retained EU law.
Corporate governance
The Corporate Sustainability Reporting Directive has been published in the Official Journal. Under the Directive, affected companies will have to report information on a full range of ESG issues relevant to their businesses. Member states must bring into force the laws, regulations and administrative provisions necessary to comply with Articles 1 to 3 of the directive by 6 July 2024. Article 4 shall apply from 1 January 2024 for financial years starting on or after 1 January 2024.
On 13 December, the FRC published a report on what makes a good annual report and accounts from its perspective as an improvement regulator. The report identifies the characteristics associated with high quality annual reports and accounts, as well as providing examples and analysis of them. The report includes a process map to assist with accounts preparation.
Institutional Shareholder Services has published updates to its UK proxy voting guidelines for 2023. The amendments to the guidelines relating to the remuneration report and to climate accountability are substantially similar to those consulted on earlier in the month. Additional changes relate to gender and ethnic diversity, and audit committees, among others. The updates will be effective for meetings held on or after 1 February 2023.
Women on boards
The directive on the gender balance of boards of listed companies was published in the Official Journal of the EU on 7 December. Under the directive, among other things, EU member states must require that at least 40% of non-executive director positions, or at least 33% of all director positions, in listed companies are held by members of the under-represented sex by 30 June 2026. Member states must adopt the required national measures by 28 December 2024.
Economic Crime and Corporate Transparency Bill
On 29 November the Economic Crime and Corporate Transparency Bill completed its committee stage in the House of Commons. Amendments made to the Bill during this stage relate to, among other things:
- Company names.
- Identify verification.
- Promoting the integrity of the register.
The Bill is effectively the second part of a legislative package aimed at preventing the abuse of UK corporate structures and tackling economic crime.
Flexible working
The government has responded to its consultation on flexible working and proposes several amendments to the law, including making the right to request flexible working a day one right. The underpinning principle is that there is no one-size-fits-all approach to flexible working. The government will introduce secondary legislation, when Parliamentary time allows, and will develop enhanced guidance to raise awareness and understanding of how to make and administer temporary requests for flexible working. It will also issue a call for evidence to better understand how informal flexible working works in practice.
The Office of Tax Simplification is expected to publish a report of the findings from its review of hybrid and distance working before the end of December.
Dates for your diary
1 January
- Specialisation and Research and Development Agreements Block Exemption Orders 2022 enter into force.
- Taxonomy Complementary Climate Delegated Act on gas and nuclear activities begins to apply.
4 January
Subsidy Control Act 2022 enters into force.
6 January
- Government response to report on post-Brexit free trade agreements expected.
- Deadline for responses to IPO consultation on legislative changes to address barriers to digital transformation.
- Deadline for submission to DCMS Committee consultation on non-fungible tokens and the blockchain.
- European Commission consultation on Digital Markets Act implementing provisions closes.
11 January
ICO consultation on its draft guidance on monitoring at work ends.
16 January
Sections 7 and 8 of the Economic Crime (Transparency and Enforcement) Act 2022 (relating to updating information on the register) come into force.
20 January
Second readings for the Asylum Seekers (Permission to Work) Bill 2022-23 and the Employment (Allocation of Tips) Bill 2022-23 expected on this date.
23 January
Deadline to respond to the European Commission’s proposed Directive and Regulation on legal protection of designs.
25 January
Law Commission call for evidence on decentralised autonomous organisations closes.
26 January
ICO consultation on its draft guidance on information about workers’ health ends.
30 January
CMA consultation on its Annual Plan 2023/24 closes.
