Down the Wire

The latest news on law and regulation in the capital markets

The Competition and Markets Authority (CMA) has launched a detailed study into the statutory audit market. The initiative follows growing concerns about the quality and resilience of statutory audits, in particular as a result of the collapse of construction firm Carillion and retailer British Home Stores, and the criticism of those responsible for reviewing the companies’ accounts, as well as recent poor results from reviews of audit quality. The CMA’s study will sit alongside the current independent review led by Sir John Kingman into the Financial Reporting…
The London Stock Exchange has published a newsletter, Inside AIM, to address some of the questions it has received from nominated advisers in relation to the corporate governance changes that take effect from 28 September 2018. By way of background, from 28 September 2018, AIM companies will be required to disclose details of a recognised corporate governance code they have decided to apply. Companies will have to explain how they comply with their chosen corporate governance code…
The London Stock Exchange (LSE) has published amended AIM Rules for Nominated Advisers (Nomad Rules). The Nomad Rules set out the eligibility requirements, ongoing obligations and certain disciplinary matters in relation to nominated advisers (Nomads). The revised rules will come into effect on 30 July 2018. The main rule changes being introduced are: Additional eligibility criteria for Nomads to provide evidence to the LSE about their resources and that they are able to comply with the…
The 2018 UK Corporate Governance Code has been published today by the Financial Reporting Council. The 2018 Code puts the relationship between companies, shareholders and stakeholders “at the heart of long-term sustainable growth in the UK economy”. It is shorter and sharper than the previous Code and is structured by high-level Principles and more detailed Provisions.  The supporting Principles from the previous Code have been removed and, in some cases, been incorporated into the new Principles or Provisions, while others…
The UK will be getting a revised Corporate Governance Code, most likely effective January 2019. The House of Commons Library has published a briefing paper on Corporate Governance Reform. The briefing paper provides an overview of the corporate governance framework in the UK, including the history of the UK corporate governance code (UKCG Code) and the interaction of the UKCG Code with directors’ duties under the Companies Act 2006 (CA 2006). The paper also provides…
There is increasing concern about the public availability of residential addresses in a digital world. A balance needs to be struck between ensuring that the information on the company register is of practical use in achieving corporate transparency but, at the same time, ensuring that the information does not become a tool for abuse, such as identity fraud. To achieve this balance, the government has passed The Companies (Disclosure of Address) (Amendment) Regulation.  As from 26…
On 25 April 2018 the Quoted Companies Alliance published a revised version of its 2013 corporate governance code. Key changes from the 2013 version include: The principles have been redrafted so there are now 10, rather than 12. A new principle has been added requiring companies to promote a corporate culture that is based on sound ethical values and behaviours. The principles and the necessary disclosure sections have been merged so that the necessary disclosures…
The International Organization of Securities Commissions (IOSCO) has published a consultation report inviting input to a possible Good Practices Report on how issuer audit committees can promote and support external audit quality. IOSCO acknowledges the crucial role independent, high quality audits play in supporting investors’ confidence in a company’s financial report. To that end, IOSCO proposes several ways in which the audit committee can promote quality audits: recommend an external auditor independently of management, with…
The London Stock Exchange has published AIM Notice 50 which, amongst other things, announces the implementation of updated versions of the AIM Rules for Companies and the AIM Rules for Nominated Advisers from 30 March. Marked up versions of both are also available on the LSE’s website. In providing feedback on the changes proposed in AIM Notice 49, the LSE has said that respondents were supportive of the proposed new obligation for an AIM company to disclose on…
At the request of the Department for Business, Energy & Industrial Strategy, the Investment Association (IA) has launched a public register of FTSE All-Share companies showing occasions where these companies have experienced substantial shareholder dissent i.e. where companies have received votes of 20% or more against any resolution or which have withdrawn a resolution before their AGM. The purpose of the register is to identify companies who receive a high vote against or withdraw a resolution, and to…