EQ Monthly Bulletin - December 2025

In This Edition:

• Investment Association – Letter to Rem Co Chairs
• Companies House – Guidance on Approach to Non-Compliance with Identity Verification
• Companies House – Revised Forms and Guidance
• Department for Business and Trade – Guidance on the Register of People with Significant Control
• FRC – Thematic Review of Reporting by Smaller Listed Companies
• HM Treasury – Policy Note on T+1 Settlement and Draft Regulation

Investment Association – Letter to Rem Co Chairs

On 12 November 2025, the Investment Association (IA) wrote to remuneration committee chairs confirming that there will be no changes to the IA Principles of Remuneration for 2026.

The Principles of Remuneration build on the remuneration expectations set out in the UK Corporate Governance Code and so should be read in conjunction with them.

The IA suggests the following areas for improvement:

• Company specific rationale: explanations for why an approach is appropriate for the company
• Use of benchmarking to justify increases: should be robust and well explained
• Hybrid schemes: Investors expect companies to adopt these schemes only where they have a significant US footprint or compete for global talent.  Detail should be provided on the scheme’s alignment with the company’s business model
• Changes to existing awards: best practice for performance conditions and underpins to stay in place for the lifetime of awards, only adjusted or waived in exceptional circumstances and shareholders should be consulted in advance

The letter further details that bonus deferral mechanisms should not be completely removed once an executive has built up a significant long-term shareholding and non-executive director fees may be paid in shares bought at market price.

The IA letter to remuneration committee chairs can be viewed here: rem-committee-chair-letter-final_.pdf

Companies House – Guidance on Approach to Non-Compliance with Identity Verification

On 17 November 2025, Companies House published guidance on its approach to non-compliance with mandatory identity verification (IDV) requirements.

The approach will include the following:

• If individuals do not comply with the requirements by their due date – Companies House has three main routes for enforcement action – prosecution, referral to the Insolvency Service, and financial penalties (which may be issued to the individual or to the company)
• Addressing fraud and criminal activity – Companies House will use its strongest powers and work with law enforcement
• Informing individuals of their obligations – using a wide range of communication methods, including direct letters and e mails 
• Nudging and guiding people to comply – by signposting and advising

Companies House has a range of other enforcement methods available, including:

• Directing a company to take or refrain from taking action
• Annotating the register
• Disqualifying directors

If a case is not selected for prosecution, directors may still be committing an offence under section 167M of the Companies Act 2006 by continuing to act without IDV.

Companies House has discretion to extend the IDV date for a PSC for up to 14 days.

Further information is available via the Companies House website here: Companies House approach to non-compliance with mandatory identity verification - GOV.UK

Companies House – Revised Forms and Guidance

On 18 November 2025, Companies House published updated forms and guidance reflecting the enforcement of identity verification and changes required by the Economic Crime and Corporate Transparency Act 2023.

For details of all new forms and guidance, please see the Companies House website: Guidance for limited companies, partnerships and other company types - GOV.UK

Department for Business and Trade – Guidance on the Register of People with Significant Control

On 19 November 2025, the Department for Business and Trade (DBT) published updated non-statutory guidance on the register of people with significant control (PSC) following changes to the PSC regime on 18 November 2025.

Changes include:

• Updates to reflect the removal of the need to maintain a local PSC register
• Removal of references to the former option to hold PSC information on the central register at Companies House
• Removal of the Annex from the guidance that formally sets out prescribed wording to be included in the PSC register
• A new section on identity verification of PSCs
  The guidance can be viewed here: Register of People with Significant Control

FRC – Thematic Review of Reporting by Smaller Listed Companies

On 19 November 2025, the FRC published a report on its thematic review of reporting by smaller listed companies in the UK (those outside of the FTSE 350).

The FRC encourages the following:

• Ensure consistency between revenue information provided in the accounting policy, related notes and strategic reporting, focusing particularly on matters including the revenue recognition accounting policy
• Appropriately classify cash flows as operating, investing, or financing, to exclude non-cash transactions from the cash flow statement
• Clearly explain significant judgements and estimates and key assumptions and ensure consistent narrative reporting
• Disclose the nature and extent of risks arising from financial instruments
• Remove irrelevant detail, keep accounting policies up to date and avoid duplication

The full report is available here: Thematic Review: Reporting by the UK’s smaller listed companies

HM Treasury – Policy Note on T+1 Settlement and Draft Regulation

On 20 November 2025, HM Treasury published a policy note mandating T+1 settlement in the UK and a draft version of the Central Securities Depositories (Amendment) (Intended Settlement Date) Regulations 2026.

The draft Order sets out how the government will deliver T+1 settlement from 11 October 2027, including:

• Settlement date should be “no later than the first business day after the day on which the trading takes place”
• Maintains some existing exemptions – the T+1 requirement will not apply to certain transactions, including those negotiated privately and executed on a UK trading venue, bilateral trades, and first transactions where transferable securities are subject to initial recording in book-entry form
• Introduces an exemption for securities financing transactions (SFTs)

The deadline for a response to the draft Order is 27 February 2026.

HM Treasury have published a dedicated website which can be viewed here:  Accelerated Settlement (T+1) - GOV.UK