FCA: Primary Market Bulletin 51

On 24 September 2024, the FCA published Primary Market Bulletin 51 (PMB 51) finalising various changes to the knowledge base in light of the updated listing regime which came into force in July.

The updated content reflects feedback from the consultation in Primary Market Bulletin 48 (PMB 48) as well as the subsequent publication of final form UK Listing Rules. The FCA has included tables in PMB 51 identifying which Technical Notes have been finalised (or deleted) as proposed in PMB 48, which have been finalised with amendments and which have been carried forward to a future Primary Market Bulletin.

The FCA notes it intends to continue with its phased approach to consulting on changes to the knowledge base and plans to update and consult on further Technical and Procedural Notes in future Primary Market Bulletins. Pending such updates, the FCA expects firms and other market participants to interpret references to the previous Listing Rules purposively in light of the rule changes.

Separately, PMB 51 includes reminders of the deadlines for commenting on its consultation on improvements to the National Storage Mechanism (27 September 2024) and the Financial Reporting Council’s discussion paper on opportunities for the future of digital reporting (1 November 2024).

(FCA, Primary Market Bulletin 51, 24.09.2024) 

FRC: Annual Review of Corporate Reporting

On 24 September 2024 the Financial Reporting Council (FRC) published its Annual Review of Corporate Reporting (Review) which describes the activities and findings of its corporate reporting review function for the 12 months to 31 March 2024. Its aim is to help companies improve their corporate reporting by highlighting the key areas for improvement and matters on which companies should focus on during the coming year, with a particular focus on the top ten areas where the FRC has challenged companies most frequently, or where requirements are complex or changing. Points noted in the Review include:

• While the quality of FTSE 350 reporting has been maintained, the FRC has observed some evidence of a widening gap in reporting quality between the FTSE 350 and other companies.
• There is continued need for improvement in relation to impairment and cashflow statements (queries in these areas arose in over 10% of all cases opened this year).
• There were comparatively few compliance issues in premium listed companies’ reporting against the Taskforce for Climate-related Financial Disclosures (TCFD) framework. However the FRC notes that similar climate-related disclosures are now mandated for a much wider range of companies under the Companies Act 2006 and it intends to publish a thematic review of these disclosures in winder 2024/2025.
• The FRC will continue to take a proportionate and targeted approach to monitoring and it does not expect companies to provide information in their annual reports that is not material or relevant to users.

The FRC has set out its key expectations for 2024/25 annual reports and accounts. As well as expecting companies to take account the top ten issues identified in the report, it also expects companies to consider good quality reporting requirements in the thematic reviews it has published, as well as to do the following:

• Pre-issuance checks - ensure the company has a sufficiently robust review process in place to identify common technical compliance issues.
• Risks and uncertainties – ensure clear and consistent disclosures about uncertainty and risk are given that are sufficient for users to understand the positions taken in the financial statements.
• Narrative reporting – ensure the strategic report includes a fair, balanced and comprehensive review of the company’s development, position, performance and future prospects.

Directors should be taking a step back and consider whether the annual report and accounts tell a consistent and coherent story throughout the narrative reporting and financial statements. Disclosures should be clear, concise, understandable and company-specific and only include material and relevant information.

(FRC, Annual Review of Corporate Reporting, 24.09.2024)

(FRC, Press release – FRC publishes Annual Review of Corporate Reporting, 24.09.2024)