Essential Corporate News – Week ending May 12, 2023

FCA: New regime for public offers and admissions to trading

On May 5, 2023 the Financial Conduct Authority (FCA) published a "new regime for public offers and admissions to trading" page on its website in relation to the new UK prospectus framework and the FCA’s work in this area. 

The FCA notes that, based on the draft legislation published by HM Treasury as part of the Edinburgh reforms, there are a number of areas of focus for engagement and where the FCA is likely to make future rules. These include:

• Whether or how to set prospectus requirements for companies seeking admission to regulated markets.
• Whether or not to set prospectus requirements on issuers raising further capital on regulated markets.
• How issuers may include forward-looking information in prospectuses.
• How the FCA may approach setting prospectus requirements for issuers seeking to admit securities to junior markets (MTFs).
• What rules the FCA should set for firms that choose to operate a ‘public offer platform’ to allow companies to raise capital from investors without being admitted to a public market.

The page includes a calendar of events and publications which will be updated throughout the FCA’s engagement process. 

The FCA expects to publish its first engagement papers during May 2023 and will then hold a series of online focus groups to encourage dialogue and feedback (the page will be updated with details of these groups and how to join). 

After the engagement process, the FCA intends to provide feedback on key points raised and to work on developing specific rule proposals which it plans to consult on in 2024.

(FCA, New regime for public offers and admissions to trading, 05.05.2023)

DBT: Amendment to Retained EU Law (Revocation and Reform) Bill

On May 10, 2023 Kemi Badenoch, Secretary of State for the Department for Business and Trade (DBT) published a Written Statement announcing that amendments are being tabled to the Retained EU Law (Revocation and Reform) Bill (Bill).

The purpose of the Bill is to end the special status of retained EU law and, as the Bill is currently drafted, almost all retained EU law is automatically revoked at the end of 2023, unless a statutory instrument is passed to preserve it. However, the Written Statement notes that with the growing volume of retained EU law being identified, and the risks of legal uncertainty posed by sunsetting instruments made under EU law, it has become clear that the programme was becoming more about reducing legal risk by preserving EU laws than prioritising meaningful reform. 

As a result, the Government is tabling an amendment for Lords Report, which will replace the current sunset provision in the Bill with a list of the retained EU laws that it intends to revoke under the Bill at the end of 2023. The aim of this is to provide certainty for business by making it clear which regulations will be removed from the statue book, instead of highlighting only the retained EU law that would be saved. The Written Statement notes that in addition to the list of around 600 pieces of retained EU law that are proposed to be revoked directly through the Bill, the Financial Services and Markets Bill and the Procurement Bill will revoke around a further 500 pieces of retained EU law.

The amendments to be moved include a new Schedule to be inserted before Schedule 1 of the Bill, which sets out the subordinate legislation (Part 1) and retained direct EU legislation (Part 2) to be repealed on  December 31, 2023.

In addition, the EDBT has published a policy paper, Smarter regulation to grow the economy, described as the first in a series of regulatory reform announcements, focusing on how regulation across the UK economy can be improved to reduce burdens, push down the cost of living and drive economic growth. It covers key reforms to the better regulation framework, how the UK will ensure that regulators help drive economic growth and further reforms to the UK’s existing stock of regulation.

The DBT has also updated the retained EU law dashboard. Going forward, the Government will continue to update this catalogue on a quarterly basis as Government departments work to identify where more legislation can be amended, repealed or replaced.

(DBT, Written Statement, Regulatory Reform Update, 10.05.2023)

DBT: Ethnicity pay reporting – Guidance for employers

On April 17, 2023 the Department for Business and Trade (DBT) published guidance for employers on how to measure, report on and address any ethnicity pay differences within their workforce.

Employers with 250 or more employees have been required to publish gender pay gap figures since 2017 and while employers are not required to collect, analyse or publish information on ethnicity pay,  many choose to do so. The new guidance follows a commitment made by the Government in Inclusive Britain, published in March 2022, to issue guidance to support employers to calculate their ethnicity pay and to take meaningful action on the findings.

The guidance explains how employers can report on their ethnicity pay and how to:

• Collect employees’ ethnicity data;
• Gather the required payroll data for ethnicity pay calculations;
• Make ethnicity pay calculations;
• Analyse and understand the results of these calculations; and
• Develop an action plan to address any identified disparities.

The aim of the guidance is to develop a consistent, methodological approach to ethnicity pay reporting, which can then lead to meaningful action, and much of it, including the methodology for the calculations, mirrors the approach set out in the guidance for gender pay gap reporting. The aim of this is to help employers to avoid having to run different processes to collect pay data for both sets of calculations although the guidance points out that, for a number of reasons, ethnicity pay reporting is much more complex than gender pay reporting. 

(DBT, Ethnicity pay reporting – Guidance for employers, 17.04.2023)