EQ Monthly Bulletin - January 2024

Economic Crime and Corporate Transparency Act 2023

A number of draft regulations have been published relating to provisions contained in the Economic Crime and Corporate Transparency Act 2023 (ECCTA). These include:

• draft Limited Liability Partnerships (Application of Company Law) Regulations 2024 which will amend the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 and the Limited Liability Partnerships Act 2000 to ensure that certain of the amendments made to the Companies Act 2006 by the Economic Crime and Corporate Transparency Act 2023 also apply (with modifications) to LLPs. The draft Regulations will come into force when section 1 (registrar’s objectives) of ECCTA enters into force. Further details are available from The Limited Liability Partnerships (Application of Company Law) Regulations 2024 (legislation.gov.uk). This regulation will become effective when section 1 of ECCTA comes into force.
• a number of draft regulations for the rectification of office addresses by the Registrar of Companies (the Registrar). The draft regulations include the Registered Office Address (Rectification of Register) Regulations 2024 which can be viewed at The Registered Office Address (Rectification of Register) Regulations 2024 (legislation.gov.uk). It includes amendments to the existing processes in the event of an address being hijacked and which is deemed not to be an appropriate address within the meaning of the amended section 86(2) of the Companies Act 2006. The Service Address (Rectification of Register) Regulations 2024, which enable the Registrar to change the registered service address of a company's directors, secretaries or registrable Person with Significant Control or Relevant Legal Entity (relevant person) to an address nominated by the Registrar where they are satisfied that the registered service address does not meet the requirements of section 1114(1) and (2) of the CA 2006.

Full details are available from The Service Address (Rectification of Register) Regulations 2024 (legislation.gov.uk). The Principal Office Address (Rectification of Register) Regulations 2024, which enable the Registrar to change the registered service address of a relevant person where they are satisfied the address is not in fact the relevant person's principal office. More details are available from The Principal Office Address (Rectification of Register) Regulations 2024 (legislation.gov.uk). These regulations will come into force when section 105,106 and 107 of the ECCTA come into force.

• the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024 which will make a number of amendments to legislation which is considered to be consequential, supplementary or supplemental to the ECCTA. This includes provisions in amongst others the Companies Act 2006, European Economic Interest Grouping Regulations 1989 and the Overseas Companies Regulations 2009. This regulation will be effective when section 1 of ECCTA comes into force.

Additionally, in a blog post on the Companies House website, the Registrar advised of a number of changes in company law which will be effective in March 2024. These include greater powers to be given to Companies House to query information and to conduct stronger checks on company names that may give a false or misleading impression to the public. New rules will be introduced to require companies to provide an appropriate address for their registered office which will mean that PO Box numbers will no longer be acceptable.

Companies will also need to provide a registered email address to Companies House although there are indications that for groups of companies a single email address will be acceptable. There will also be a requirement for companies to provide a statement that on incorporation they will be carrying on lawful purposes and there will also be an annual attestation of this added to the confirmation statement. The full blog post can be viewed at A new year and a new challenge for Companies House   - Companies House (blog.gov.uk)

Financial Conduct Authority

The Financial Conduct Authority has published a consultation paper (CP23/31) seeking views on its detailed proposals for broad reforms to the UK listing regime, and summarising feedback received in response to consultation paper CP23/10.

The consultation paper confirms the FCA's intention to broadly maintain the approach outlined in CP23/10 of replacing the existing standard and premium segments with a single UK listing category for equity shares in commercial companies (commercial companies) and provides details of the proposed approach to the commercial companies category, including in key areas such as eligibility, significant and related party transactions and dual class share structures.

The consultation paper also includes further details of:

The proposal to create a UK Listing Rules sourcebook (UKLR) which will replace the existing Listing Rules. A first tranche of the draft UKLR instrument, setting out the core requirements for the commercial companies’ category and sponsor requirements is included in the consultation paper. The second tranche of the draft instrument will be published during the consultation period in Q1 2024.

Proposals to amend current sponsor competence requirements (LR 8) to widen the range of experience that can be taken into account for this purpose. The FCA plans to implement these changes separately in the spring of 2024 ahead of the proposed timeline for the wider UKLR reforms.

Proposals concerning the sponsor's role in the UKLR regime, such as when a sponsor must be appointed and the rules applicable to sponsor firms, including the sponsor's role.

The proposed approach to categories for other types of equity and non-equity listing, including proposals to address existing standard listed issuers. The consultation paper also explains the proposed new category for shell companies and the intended approach to closed-ended investment funds and sovereign controlled companies.

The consultation period for responses concerning sponsor competence closes on 16 February 2024, and the consultation period for the other UKLR proposals closes on 22 March 2024.

The consultation paper can be viewed via this link: CP23/31: Primary Markets Effectiveness Review: Feedback to CP23/10 and detailed proposals for listing rules reforms (fca.org.uk)

Environmental, Social and Governance- Launch of industry code of conduct for ESG ratings

The International Capital Market Association (ICMA) and the International Regulatory Strategy Group (IRSG) have launched a voluntary code of conduct for Environmental, Social and Governance (ESG) ratings and data products providers. In the first half of 2023, the UK government consulted on whether and how the Financial Conduct Authority (FCA) regulatory perimeter should be extended to include ESG ratings providers. The FCA continues to work closely with the government as it considers its next steps.

The code is intended to provide a benchmark for any providers that fall outside the scope of potential future regulation. Its aim is to foster a trusted, efficient and transparent market, by introducing clear standards for ESG ratings and data products providers and clarifying how such providers can interact with wider market participants. Based on IOSCO’s recommendations, the Code sets out six principles to improve the availability and quality of information provided to investors at product and entity levels; enhance market integrity through increased transparency, good governance and sound systems and controls; and (improve competition through better comparability of products and providers.

The Code can be accessed here: Code of Conduct for ESG Ratings and Data Products Providers (icmagroup.org)