Essential Corporate News: Week ending February 5, 2021

FCA: Changes to Listing Rules for Open Ended Investment Companies - Handbook Notice 84

On January 29, 2021, the Financial Conduct Authority (FCA) announced a number of changes to the FCA Handbook, including the addition of a new section in the Listing Rules, LR 16A, titled “Open-ended investment companies: Standard listing”. These changes have been introduced by the FCA’s Listing Rules (Open-ended Investment Companies) Instrument 2021.

In summary, this Instrument makes changes to the Listing Rules and other relevant parts of the FCA Handbook to create a more proportionate listing regime for open-ended investment companies (OEICs) in standard listing by disapplying or amending existing premium listing requirements that: 

• are disproportionate because they prescribe transparency and safeguards, including rights to shareholders, that are already present in underlying funds regimes under which the OEIC is already authorised or recognised; or 
• are not relevant or are inoperable for OEICs because they do not take account of the specific features of OEICs’ business models or structures. 

The FCA consulted on its proposals in March 2020 in CP 20/5. All OEICs that already have a premium listing will automatically become standard listed under the amended provisions in new LR 16A when the final rules come into force. This will be January 4, 2022 so that OEICs with cross-listings have plenty of time to engage with other jurisdictions where a UK premium listing was made a condition of that listing. This is to ensure overseas listings can be retained following the move to a standard listing in the UK.

(FCA: Changes to Listing Rules for Open Ended Investment Companies - Handbook Notice 84, 29.01.2021)

IIRC: Updated International IR Framework

In January 2021, the International Integrated Reporting Council (IIRC) published an updated version of its International IR Framework, last published in 2013. This latest version applies to reporting periods commencing January 1, 2022.

The IIRC wants integrated thinking to be embedded within mainstream business practice in the public and private sectors, facilitated by integrated reporting as the corporate reporting norm. The purpose of the IR Framework is to establish Guiding Principles and Content Elements that govern the overall content of an integrated report, and to explain the fundamental concepts that underpin them. The Framework identifies information to be included in an integrated report for use in assessing the organisation’s ability to create value but does not set benchmarks for such things as the quality of an organisation’s strategy or the level of its performance.

The IIRC states that an integrated report differs from other reports and communications in a number of ways. In particular, it focuses on the ability of an organisation to create value in the short, medium and long term, and in so doing it:

• Has a combined emphasis on conciseness, strategic focus and future orientation, the connectivity of information and the capitals and their interdependencies. 
• Emphasises the importance of integrated thinking within the organisation.

(IIRC: Updated International IR Framework, 01.2021)