Steve Banfield
Industry Director at EQ
Following 33 consecutive meetings as chair of the Registrars’ Group (we don’t meet in August) it was a bittersweet moment as I stood down, by rotation, at our May AGM. It will certainly give me some time back each month, but I will miss the role. I remember the anxiety only too well my first-time orchestrating proceedings, but I also remember how the support of the other committee members helped me through. I have thoroughly enjoyed my time as Chair and am looking forward to when my tenure comes around again. Of course, as every chair will attest, the role of the group secretary is critical, and having the EQ Company Secretarial Services perform the role certainly made my job as chair easier as they circulated committee papers well in advance of the meetings, captured accurate minutes and identified, captured, allocated and followed through actions, to conclusion. Our last meeting focused on the work of the group over the past year, the engagement we’ve had with regulators, industry working groups, forums and govt. and the industry related consultations we and our subcommittee groups have responded to.
We also considered the focus of the next 12 months, the impact of general election and a potential new government in the UK, which brings a certain amount of turbulence to the market, especially when it comes to passing legislation and announcing policy. The timing of the summer election is likely to create more certainty than the spectre of a winter election, as there will unlikely be any unexpected policy decisions to cause market shocks. The election polling is such that the financial market is expecting a Labour majority, and with the current shadow chancellor announcing that there will be no major financial risks taken, this may smooth the way for the IPO markets to open up in the second half of the year. Our group is closely following the work of the Capital Markets Industry Taskforce (CMIT) and all of the related activity that they are engaged in, specifically focused on ensuring that regulatory reform focuses on making the UK markets an attractive option for companies to list, grow and stay.
This leads me nicely to the City Week conference, bringing together the great and the good from industry, government, and regulators to consider how to make London a leading listing venue. We heard from Bim Afolami, the current Economic Secretary to the Treasury, the London Stock Exchange and the FCA, there were panels made up of CEOs of city advisors and heads of financial institutions who were all sharing their thoughts on how London could position itself as a leading Capital Market.
The main takeaway was the message that the reform agenda, which includes changes to the listing rules, the governance and stewardship codes, the way investment research is conducted, a potential consultation on the prospectus regime next year and the introduction of PISCES, a public market that private companies can access, were not only a great message to convey to current and prospective listed companies, but were now beginning to be noticed and replicated in other jurisdictions. The conference also sought to dispel the rumours of price differentials between the UK and US markets, citing examples of similar struggles the US market, which is also facing an election year, is experiencing. The topic of the US, UK and European markets move to T+1 was also discussed, in particular timing, with the US making the change in May 2024, and the UK and Europe seeking to adopt by the end of 2027.
We are also still awaiting the final recommendations of the Digitisation taskforce, which we had originally been expecting in ‘March of this year,’ then we had started to hear ‘May or June of this year,’ but now we are hearing it should be ‘this year.’ Our latest understanding is that the taskforce will seek to host round tables with cross industry representation, although we do not have any insights as to when these mat take place, or who the invitees will be.
The big question remains how much the July 4 General Election will impact the City reform agenda and even if it will remain a priority for the government, post-election? It is no secret that there has been a stand-off between the FCA and UK government with regard the level to which the UK markets should relax regulation and it will be interesting to see if this continues with the new government. For example, a Labour government might have a lower risk appetite and lean more toward the preservation of investor protection. This may also result in the long-awaited transition of the FRC to ARGA.
On the theme of investors, it is at this time of year that shareholders get to have their say at annual general meetings. In 2023 we saw a marked increase in the threat of protests, especially for those companies in the mining, energy, banking, and defence sectors. This has not gone-away, yet disruption at the events is less than in previous years, in the main due to well-planned events and well drilled security teams. Identification of potential protestors made it easier to manage their activity in the room, limiting their ability to disrupt the meeting. As you are unable to prevent a shareholder attending a meeting, you can never prevent disruption completely, but planning appropriately can help the meeting run as smoothly as possible on the day.
I’d like to call out the work done by Lisa Graham, our meetings manager, who along with her team, has supported many events so far this year. Their experience certainly shines through. Click here to discover more about Lisa in EQ’s #TheEQExperts series spotlighting our talented colleagues.
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