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Registration Services' Regulatory Roundup - April 2017

19 April 2017

Welcome to your latest Roundup of what is happening in the share registration and company secretarial worlds.

Financial Conduct Authority (FCA)

Changes to the Disclosure Guidance and Transparency Rules to reflect Market Abuse Regulation requirements

The Financial Conduct Authority has made changes to the Disclosure Guidance in DTR 2.5 in order bring it into line with the European Securities and Markets Authority's (ESMA) guidelines issued under the Market Abuse Regulation.  

The main changes, which came into force on 24 February 2017, are:

  • To clarify that the ESMA Guidelines contain a non-exhaustive and indicative list of the situations where a delay of the disclosure of inside information may be legitimate and situations in which delayed disclosure is likely to mislead the public. The FCA also reminds companies that it is the expectation that, although the list is non-exhaustive, the conditions which allow the delay of disclosure of information should be narrowly interpreted.
  • Removal of the statement that delaying disclosure of inside information is only likely to be allowed where there is an ongoing negotiation that would be jeopardised by early disclosure. 

More information is available here.

MiFID II Consultation paper V

On 31 March the FCA issued the 5th MiFID II consultation paper.  The paper includes details relevant to specialist types of designated investment firms and will be of particular interest to clients in the Banking and Investment sectors.  The paper asks for feedback on a series of questions with regards the application of MiFID II to certain services and standards as well as the proposed timing of implementation.  The FCA has requested responses by 12 May for chapters 3 & 4 and 23 June for chapter 2 of the paper.

More information is available here.

Payment Services Regulator (PSR) regulatory fees - decision

The FCA also outlined its decisions following responses to its previous consultation paper on the allocation, calculation and collection of the PSRs fees, requesting comments by May 12.  The consultation impacts participants in regulated payments systems under FSBRA including Payment Service Providers.

More information is available here.

The London Stock Exchange  

Issues guidance on the importance of environmental, social and governance reporting

The London Stock Exchange Group (LSEG) has issued guidance, setting out recommendations for good practice in Environmental, Social and Governance reporting (ESG). 

The global guide responds to demand from investors for a more consistent approach to ESG reporting, which is now a core part of the investment decision process. The guide has also been sent to more than 2,700 companies that have securities listed on LSEG’s UK and Italian markets.  The reasons stated by the LSEG for publishing the guidance include making companies more aware of the importance of providing high quality ESG information, engaging investors on sustainability-related issues, helping companies and investors to navigate the complex landscape of ESG reporting, supporting the consolidation of sound global reporting standards and enabling investors to make better informed investment decisions.

The guidance is separated into eight reporting priorities:

  • Strategic relevance
  • Investor materiality
  • Investment grade data
  • Global frameworks
  • Reporting formats
  • Regulation and investor communication
  • Green revenue reporting
  • Reporting for debt issuers

The LSE guidance is available here

Common Reporting Standard (CRS) returns

Adopted by the EU on 1 January 2016, the first CRS returns are required to be made to HMRC in May 2017.  Equiniti has developed an in-house CRS solution to ensure that all of the required investor data for our impacted clients has been captured and stored appropriately and we are preparing to make our first returns to HMRC next month.  

The McGregor-Smith Review

Race in the Workplace

The McGregor-Smith Review carried out by Baroness McGregor-Smith states that “We should live in a country where every person, regardless of their ethnicity or background, is able to fulfil their potential at work.”

This independent review sets out recommendations for employers in the public and private sectors to improve diversity within their organisations.  The review sets out a roadmap to success to help leaders focus on requirements that will help them to move towards a more diverse workforce and makes a number of recommendations.  These include gathering information, raising awareness, training in unconscious bias, mentoring and examining recruitment processes.  The Review also recommends businesses with more than 50 employees to:

  • Publish a breakdown of their workforce by race and pay band on their website and in their annual report;
  • Draw up five-year aspirational diversity targets and measure progress annually; and
  • Nominate a board member to deliver on these targets.

The Government has responded to the review and stated that it prefers voluntary action from companies but will monitor progress and act if it feels this is necessary.  

Companies with 250 employees or more will be well aware of the requirement to publish gender pay information by 4 April 2018 which means that data must start to be captured on 5 April 2017.  As companies are now having to gather this pay data it would seem sensible to extend the data capture to include ethnic pay data. 

Both the McGregor-Smith Review and the Government response are available here

Prism Briefing – MSA Gender Pay Gap and Payment Practices Reporting

An examination of reporting requirements outside of the Annual Report

Click here for the latest Prism Cosec Briefing.

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