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EQ Monthly Bulletin January 2024

EQ Monthly Bulletin - February 2024

Thursday, 22 February 2024

Keeping you up-to-date with industry changes and news impacting the world of share registration and employee share plans.

Welcome to our Monthly EQ Bulletin.

The main focus of this month’s Bulletin is the publication of the revised UK Corporate Governance Code and Guidance Notes by the Financial Reporting Council (FRC) with most of the changes in the revised code coming into force, with effect, from 1 January 2025.

The FRC has also published a thematic review of reporting by the UK’s largest private companies which includes subsidiaries of quoted companies.

Institutional Shareholder Services have published their proxy voting guidelines which are effective for meetings being held on or after 1 February 2024.

A consultation on a proposed Cyber Governance Code of Practice is currently ongoing with views on the proposed code needing to be received by 19 March 2024.

Finally, the Public Offers and Admission to Trading Regulations 2024 have been published which is part of the reform of the UK Prospectus Regime.  

Happy reading and as always, if you have any questions on the content of this month's Bulletin, please contact your Client Relationship Lead.

In This Edition

Revised UK Corporate Governance Code

On 22 January 2024, the Financial Reporting Council (FRC) published the updated UK Corporate Governance Code.). The 2024 revision of the Code is limited in scope and particularly addresses the issue of internal controls contained in Provision 29 which states that the board should monitor and report on the company’s risk management and internal control framework and, at least annually, conduct a review of its effectiveness. The monitoring and review should cover all material controls, including financial, operational, reporting and compliance controls. The FRC has emphasised that a Board should determine what should comprise its material internal controls, the needs for each business may vary and that the level of maturity of non-financial controls for some businesses may not be, or need to be, as mature as for their financial controls.

Several other amendments have been made to the Code and these include:

  • Section 1 – Board leadership and company purpose. New Principle C – governance reporting should centre on board decisions and their outcomes in relation to a company’s strategy and objectives.
  • Section 1, Provision 2 – updated to include that boards should assess how a desired culture has been embedded.
  • Section 3 – Composition, succession and evaluation. The list of diversity characteristics previously included have been removed.
  • Section 3, Provision 23 – updated to allow for companies implementing additional initiatives alongside their diversity and inclusion policy.
  • Section 5 – Remuneration, Provision 37 changed to outline that directors’ contracts and / or other agreements that encompass director remuneration should incorporate malus and clawback.
  • Section 5, Provision 38 – new provision for a company to place a description of its malus and clawback provisions in its annual report.

Most of the changes will be effective from 1 January 2025, although the new provision relating to internal controls takes effect in 2026.

Additionally, on 29 January 2024, the FRC published Guidance on the implementation of the Code and, for the first time, is fully digital and is intended to be updated as any significant issue arises that may impact on how the Code is implemented. The Guidance is not part of the Code and is not mandatory but is intended to be a separate, helpful, collection of information designed to help the application of the Code to different company’s needs.

The FRC has held some webinars on the Code which are available to view online, as well as a summary of changes to the Code and a Code mythbuster.

Reporting by the UK’s largest private companies

The Financial Reporting Council (FRC) has published a thematic review focussing on reporting by the UK’s largest private companies. The review examined the annual report and accounts of 20 companies with year ends between September and December 2022 with revenues ranging from £1.5 billion up to £24 billion, employing between 1,000 and 145,000 people. The companies were split into three broad categories – parent companies of privately owned groups which prepared consolidated accounts; subsidiary companies of overseas entities which prepared either intermediate level consolidated accounts or individual accounts, and subsidiaries of UK listed companies which prepared accounts under FRS101.

The review found that the quality of reporting was mixed especially in relation to how companies explained material matters which were judgemental and complex.

The review details the FRC’s expectations when drafting annual reports and accounts which include the following:

  • The strategic report should contain a balanced analysis focused on the elements of development, performance and position that are key for an understanding of the company.
  • Explain the nature of the company’s operations and how the company fits into the wider group structure, to enable users to fully understand the business and the context in which it operates.
  • Provide specific details of judgements taken and clearly explain the rationale for the conclusion reached.
  • Conduct a critical review of the annual report and accounts prior to finalisation, including considering whether the report as a whole is clear, concise and understandable, as well as checking for internal consistency and more detailed presentation and disclosure matters.

The review also notes that better reporting does not necessarily require greater volume.

The review is available from Reporting by the UK’s largest private companies (

Proxy voting guidelines

Institutional Shareholder Services (ISS) have published their proxy voting guidelines for 2024 which are effective for meetings being held on or after 1 February 2024.

Changes to the guidelines include in Part 2 an update that has been made to the recommendation to vote against the chair of the nomination committee (or other directors on a case-by-case basis) in connection with the gender and ethnic diversity of the board (to remove the guidelines that applied to companies with financial years beginning on or after 1 April 2022. A footnote has also been added to Part 2 relating to the recommendation on board independence to provide that a significant shareholder is recognised as a holding of 3% or more.

The guidelines are available from UK-and-Ireland-Voting-Guidelines.pdf (

Cyber Governance Code of Practice

The Department for Science, Innovation and Technology (DSIT) has invited businesses and organisations to provide feedback on a proposed Cyber Governance Code of Practice, to understand if the cyber risks are presented and explained in a way that is straightforward and can be implemented. Most organisations are reliant in some way on digital technologies to create and conduct business operations. Therefore, cyber risk is a material risk and boards should entwine cyber risk management with existing business risk management practices. 

The proposed code focuses on the most critical areas that leaders must engage with, making it easier for directors, non-executive directors and senior leaders to understand what actions are required to manage their cyber security risk. The call for votes closes at 11.59 p.m. on 19 March 2024.

The call for views can be accessed here: Cyber Governance Code of Practice: call for views – GOV.UK (

The Public Offers and Admission to Trading Regulations 2024

The Public Offers and Admission to Trading Regulations 2024 (the Regulations) have been published. The new Regulations provide a framework for the replacement of the existing UK Prospectus Regime (which is based on the EU Prospectus Regulation). Currently, only a limited number of provisions in the new Regulations came into force on 30 January 2024 which includes granting the Financial Conduct Authority (FCA) powers to make rules for the new Prospectus regime. The bulk of the Regulations will be effective once the FCA has consulted on and finalised the new rules. It is anticipated that the consultation will take place in summer 2024 with the new rules being made in the first half of 2025. The current Prospectus regime will be revoked using provisions in the Financial Services and Markets Act 2023 when the new rules come into effect.

The Regulations can be viewed at The Public Offers and Admissions to Trading Regulations 2024 (

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