EQ Monthly Bulletin - April 2025

In This Edition:

• Accelerated Settlement Technical Group’s report
• Risk Coalition
• European Commission
• Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025
• UK Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025
• Reporting on Payment Practices and Performance Regulations 2017
• The Parker Review Committee
• Primary Market Bulletin No 54
• The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 4) Regulations 2025
• FTSE Women Leaders Review for 2025
• Going Concern Basis of Accounting and Related Reporting
• AIM 100 Directors’ Remuneration Report
• Financial Reporting Council published its Strategy for 2025 – 2028
• Equality (Race and Disability) Bill
• Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024
• Transparency in Supply Chains Guidance

Accelerated Settlement Technical Group’s report

On 19 February 2025, the UK government published its response to the Accelerated Settlement Technical Group’s report, confirming plans to transition to the UK’s securities settlement cycle from the current two-day standard (T+2) to a one-day standard (T+1) by 11 October 2027.

Key aspects of the government’s response:

• Legislative Changes – the government will introduce secondary legislation to amend the existing UK Central Securities Depositories Regulation, changing the settlement requirement from T+2 to T+1.  This legislation is intended to align the UK with other major financial markets.
• Implementation date – The transition to T+1 is scheduled for 11 October 2027.
• Industry collaboration – the Accelerated Settlement Taskforce will oversee the implementation process.

The Financial Conduct Authority, the Bank of England and HM Treasury have all expressed strong support for this transition.

Further consultation and secondary legislation to follow prior to October 2027 compliance.

The government response is available here: Government response to Technical Group report - GOV.UK

Separately, the FCA has published a webpage on T+1 settlement, explaining that it expects firms to engage with the recommendations to understand those that are relevant to them, this is available here: About T+1 settlement | FCA

Our Industry Director updates continue to provide  insight into industry matters. The latest Q1 update is available here.

Risk Coalition

The Risk Coalition published their cross-sector, principles-based guidance on 21 February 2025.  The guidance is designed to enhance risk governance for boards and their committees with risk responsibility.  It aims to assist leaders across various industries in understanding and implementing effective risk governance practices, to improve the quality and effectiveness of the organisations’ risk management framework.

Key objectives:

• Establishing common understanding – define the purpose, role and activities of board risk committees and risk functions to ensure clarity and consistency across sectors.
• Providing a benchmark – offer a standard against which the effectiveness of board risk committees and risk functions can be objectively assessed.
• Raising standards – enhance the overall standard of risk governance and oversight within organisations.
• Filing guidance gaps – address the absence of coherent, principles-based good practice guidance for risk governance, especially in sectors lacking in detailed regulation.
  The guidance aligns with the revised UK Corporate

Governance Code’s emphasis on internal controls and risk management frameworks.  

Raising Your Game is available via this link: Raising your Game — The Risk Coalition

European Commission

On 26 February 2025, the European Commission introduced the “Omnibus Package,” a set of proposals aimed at simplifying the European Union’s sustainability reporting and due diligence regulations to enhance the business environment and competitiveness.

Key components:

Corporate Sustainability Reporting Directive (CSRD) Amendments:

• Scope adjustment – the threshold for mandatory sustainability reporting has been raised, now applying to companies with over 1,000 employees, up from the previous 250 employees, or €50 million turnover.  This will reduce the number of companies required to report.
• Implementation timeline – the application dates for the CSRD have been postponed, providing companies with additional time to adapt to the new requirements.

Corporate Sustainability Due Diligence Directive (CSDDD) Amendments: 

• Simplified due diligence obligations – the proposals aim to streamline due diligence processes, making it easier for companies to identify and address adverse human rights and environmental impacts within their operations and supply chains.
• Alignment of CSDDD with CSRD – The amendments seek to harmonize the two directives’ thresholds and timelines, to ensure consistency across sustainability regulations.
  EU Taxonomy Regulation Adjustments
• Reporting simplification – measures to simplify reporting obligations under the EU Taxonomy Regulations, reducing complexity for companies in classifying their economic activities as environmentally sustainable.

The proposal sets a two-year postponement to sustainability reporting requirements under the CSRD for all companies that are required to comply from financial year 2025 or 2026 depending on their size. It also postpones the transposition deadline for the CSDDD to 26 July 2027, as well as the first phase of its application to in-scope companies by one year to 26 July 2028.

Further information can be found via the European Commission’s press release: Commission proposes to cut red tape and simplify business environment - European Commission

Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025

The Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025 were enacted on 24 February 2025 and introduce significant changes to the UK’s Register of Overseas Entities (ROE), enhancing transparency and providing mechanisms for protecting personal information.

Key provisions:

• Access to trust information – previously, certain trust details, such as information about settlors and beneficiaries, were held privately within the ROE. The new regulations permit public access to this information, effective from 31 August 2025. This move aims to increase transparency concerning beneficial ownership.
• Protection of personal information – individuals whose information is recorded in the ROE can apply to Companies House to have their details protected from public disclosure. This provision is relevant to those who believe that making their information public could lead to serious risks.
• The Regulations came into force on 28 February 2025, except for public access to information, which will come into force on 31 August 2025.

The Regulations can be accessed here: The Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025

The Explanatory Memorandum can be accessed here: The Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025

UK Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025

On April 3, 2025, the UK Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025 was laid before parliament. These regulations aim to streamline directors’ remuneration by removing certain overlapping requirements introduced in 2019 to comply with EU legislation.

The regulation repeals the requirements implemented by the Companies (Directors’ Remuneration Policy and Directors Remuneration Report) Regulations 2019 which implemented the EU’s revised Shareholder Rights Directive. Many of these requirements overlapped with the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (2008 Regulations).

Within its Explanatory Memorandum, the Government has made clear that UK listed companies must:

1. Disclose annually the remuneration of each director broken down by salary, any bonus, any long-term share incentive award, pension and other taxable benefits, and the ratio of their CEO’s pay to the company’s upper, median and lower quartile pay, subject to an advisory shareholder vote. And:
2. Publish a triennial directors’ remuneration policy subject to a binding shareholder vote.

The changes remove existing requirements in Schedule 8 to the 2008 Regulations to disclose certain information in the remuneration report and remuneration policy.  Additionally, the regulations propose clarifications to the powers of the UK audit regulator concerning overseas audits involving non-UK companies and their auditors.

The Regulations apply to financial years beginning on or after 11 May 2025.

The regulations can be accessed here: The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025

The explanatory memorandum can be accessed here: retained_eu_law_draft_explanatory_memorandum_the_companies_regulations_2025.pdf

For more detailed information: Directors’ Remuneration And Audit – The Impact On UK-Listed Companies

Reporting on Payment Practices and Performance Regulations 2017

The Department for Business and Trade (DBT) updated its guidance on 5 March 2025 for companies and limited liability partnerships (LLPs) required to report under the Reporting on Payment Practices and Performance Regulations 2017. This guidance outlines the statutory duty for large UK businesses to report biannually on their payment practices, policies, and performance concerning supplier payments.

New reporting requirements (effective from 1 January 2025):

• Total payments – businesses must disclose the total sum of payments made during the reporting period.
• Disputed payments – they must report the percentage of payments not made within agreed terms due to disputes.

Construction contracts (effective from 1 April 2025):

• Entities using qualifying construction contracts must state whether their payment practices include retention clauses. If such clauses are used, additional information regarding these practices is required.

Threshold changes:

• The criteria defining medium-sized companies have been revised:
  • Annual turnover: increased from £36m to £54m
  • Balance sheet total: increased from £18m to £27m
  • Employee count: remains at 250 employees
• Businesses meeting two or all three of these criteria are obligated to report their payment practices.

These regulations apply to large UK companies and LLPs that, on their last two balance sheet dates, exceed two or all three of the specified thresholds.

The guidance can be accessed via this link: Duty to report: guidance to reporting on payment practices and performance - GOV.UK

The Parker Review Committee

The Parker Review Committee published its 2025 update assessing the ethnic diversity within UK business leadership, focusing on FTSE 350 companies and select private companies.

Key findings:

• FTSE 100 Companies – as of December 2024, 95 out of 100 FTSE 100 companies had at least one ethnic minority director on their boards.
• FTSE 250 Companies – significant progress was made, with 204 out of 236 reporting companies having at least one ethnic minority director, up from 175 the previous year.
• Senior Management Representation – within the FTSE 100, ethnic minorities constituted 11% of senior management position.

Challenges and recommendations:

• FTSE 250 lag – despite improvements, 46 FTSE 250 companies either lacked ethnic minority representation on their boards or did not respond to the survey, indicating room for further progress.
• Private companies – among the largest private companies, 26 had all-white boards or failed to provide data, highlighting the need for enhanced diversity efforts in the private sector.
• Future targets – the Review encourages FTSE 350 companies and the top 50 private companies to set their own ethnic diversity targets for senior management by December 2027.

The full report can be accessed here: The-Parker-Review-March-2025.pdf

Primary Market Bulletin No 54

The Financial Conduct Authority (FCA) published its Primary Market Bulletin No 54 on 14 March 2025, addressing issues related to market integrity and regulatory enhancements.

The FCA has observed a rise in deliberate leaks of material information during active merger and acquisition (M&A) transactions. Under the UK Market Abuse Regulation (UK MAR), disclosing inside information without proper authorisation is unlawful and can result in unlimited fines or injunctions.

The Bulletin also announces the publication of Policy Statement PS24/19, which summarises feedback on the consultation regarding the National Storage Mechanism (NSM). The FCA outlines final rules and guidance aimed at enhancing the NSM, with new metadata requirements for issuers set to take effect on 3 November 2025. Further information on these requirements will be published in due course.

The Bulletin can be accessed via this link: Primary Market Bulletin 54 | FCA

The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 4) Regulations 2025

The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 4) Regulations 2025 were published on 14 March 2025 and bring specific provision of the Act into force. 

Key provisions and commencement dates:

• Effective 18 March 2025 – Parts 1 and 2 of the Act – certain provisions within these sections are enacted, focusing on reforms related to Companies House and limited partnerships.  
• Effective 1 September 2025 – Failure to Prevent Fraud Offence – a new corporate offence holding organisations criminally liable if they fail to prevent fraud by an associated person.  

Amendments to previous regulations

• Correction of prior commencement regulations – this amendment rectifies procedural oversight to ensure proper implementation of the Act’s measures.

The Regulations can be accessed here: The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 4) Regulations 2025

FTSE Women Leaders Review for 2025

The FTSE Women Leaders Review for 2025 was published on 25 February 2025, highlighting significant progress and ongoing challenges in achieving gender balance within UK corporate leadership.

Key findings:

• Board representation – women now occupy 43.4% of board positions across FTSE 350 companies, an increase from 40.2% in the previous year.
• Leadership roles – female representation in senior leadership roles rose to 35.5%, up from 33.5% the prior year.
• FTSE 100 companies – within the FTSE 100, women hold 44.7% of board positions and 36.6% of senior leadership roles.

The report emphasises the need for continued efforts to reduce barriers preventing women from attaining top decision-making roles, although representation has improved, executive leadership positions remain male dominated.

The full review can be accessed here: Contents

Going Concern Basis of Accounting and Related Reporting

The FRC has published its Going Concern Basis of Accounting and Related Reporting non mandatory guidance, bringing together company law, accounting standards, auditing standards, listing rules, the UK Corporate Governance Code and other relevant regulation into one place.

The guidance is intended for all UK companies except small and micro entities. It encourages directors to take a broader view, over the long term, of the risks and uncertainties that may impact on the business.

The guidance can be found here: Guidance on the Going Concern Basis of Accounting and Related Reporting

AIM 100 Directors’ Remuneration Report

The AIM 100 Directors’ Remuneration Report was published by BDO on 6 March 2025, providing analysis of executive and non-executive director pay in AIM 100 companies. The report highlights an increase in median salaries and bonuses, especially for CEOs and CFOs, indicating a shift towards performance-driven compensation structures.

Key insights include:

• Median salary levels – detailed figures on median salaries for CEOs, CFOs and other C-suite executives.
• Performance related bonuses – an observed increase in performance-related bonuses.
• Remuneration trends and pay structures – analysis of the prevailing remuneration trends and pay structures.
• Gender diversity – analysis of the improvements in gender diversity on AIM 100 boards while recognising areas for further development.

The full report can be viewed here: BDO-AIM-100-Directors-Remuneration-Report-March-2025.pdf

Financial Reporting Council published its Strategy for 2025 – 2028

The Financial Reporting Council published its Strategy for 2025 – 2028 following extensive consultation with stakeholders.
Central to the refreshed strategy is a commitment to serving the public interest while actively supporting UK economic growth through smart, targeted, and proportionate regulation.

The four key objectives of the strategy are:

1. The standards and expectations set will enhance corporate governance, corporate reporting and investor stewardship in a manner that supports UK economic growth and investment.
2. Proportionate regulation of accounting, audit, assurance and actuarial work.
3. Building on existing understanding of corporate reporting and the audit and actuarial markets and, by being agile, identify and prepare for opportunities and challenges on the horizon.
4. Continuously learning, improving, and considered by others as a respected, effective and highly engaged regulator.

The FRC’s strategy will build on the approach it adopted in its recent review of the UK Corporate Governance Code where it stripped back guidance and unnecessary requirements and put much more focus on Boards owning their own governance, using the flexibility within the Code to comply or explain with the provisions.

The plan can be accessed via this link: FRC Backs Growth in New Three-Year Plan

Equality (Race and Disability) Bill

On 18 March 2025 the UK government published a consultation on the proposed Equality (Race and Disability) Bill, aiming to introduce mandatory ethnicity and disability pay gap reporting for companies with 250 or more employees.

Building on the framework established by the 2017 gender pay gap reporting regulations, the proposed bill intends to extend transparency obligations to encompass ethnicity and disability pay gaps. 

Under the proposed reporting framework, employers would be required to report on:

• Mean and median differences in average hourly pay – to provide a comprehensive view of pay disparities.
• Pay quartiles – distributing employees into four equally sized groups based on their hourly pay to highlight representation across pay scales.
• Bonus pay differences – reporting mean and median differences in bonus payments, plus the percentage of employees receiving bonuses.
  Additionally, employers would need to disclose the overall breakdown of their workforce by ethnicity and disability, including the percentage of employees who chose not to disclose this information.  

The consultation closes on 10 June 2025.

The consultation can be accessed via this link: Equality (Race and Disability) Bill: mandatory ethnicity and disability pay gap reporting - GOV.UK

Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024

Following changes introduced in the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024, the FRC published updates to relevant existing publications and a summary document, outlining the changes to provide clarity for those reporting in line with the updated framework.

The provisions are designed to reduce the reporting burden on companies by:

• Increasing the turnover and balance sheet criteria that help determine whether a company is a micro-entity or small, or medium-sized, or large by approximately 50%. This threshold will see many companies benefit from lighter touch financial reporting, non-financial reporting and audit requirements.
• Removing several reporting requirements from the directors’ report where overlap with other reporting requirements or little material value to users of company reporting has been identified.

The Summary document can be accessed here: Changes to company thresholds

Updated Scoping Tables that set out Companies Act 2006 disclosure requirements for the strategic report, the directors’ report and the energy and carbon report can be accessed here: Scoping Tables

The Overview of the Financial Reporting Framework can be accessed here: Overview of the financial reporting framework

Amendments to the Financial Reporting standards can be accessed via these links:

• FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland
• FRS 105 The Financial Reporting Standard applicable to the Micro entities Regime
• FRC Factsheets

Transparency in Supply Chains Guidance

The Home Office issued its updated Transparency in Supply Chains Guidance on 24 March 2025 regarding compliance with Section 54 of the Modern Slavery Act (the Act).

The new guidance reflects advancements since the introduction of the Act in 2015 and implements the government’s commitment to update the guidance in response to the House of Lords MSA 2015 Committee’s report in December 2024.

The guidance aims to explain how businesses should comply with the letter and the spirit of section 54 and the government’s expectations of companies’ statements.
Notable changes include:

• Content of Modern Slavery Act statements – provides more practical detail on the type of content that may be included in a statement, under each of the six headings in section 54(5).  This new section forms more than half of the total guidance.
• Stakeholder engagement – emphasises the importance of companies’ conducting both internal and external engagement in all areas of their approach to tackling modern slavery.

The guidance can be viewed here: Slavery and human trafficking in supply chains: guidance for businesses - GOV.UK