Primary Market Bulletin 43

The Financial Conduct Authority (FCA) has issued a new version of its Primary Market Bulletin, Bulletin #43. This time, the bulletin deals with the FCA’s new „multi-factor authentication“ requirement for access to FCA systems, including its Electronic Submission System, a possible exemption from requirements under the FCA’s Disclosure Guidance and Transparency Rules Sourcebook (DTR) as regards periodic financial reporting of third-country issuers, and responses to the FCA’s consultation on Streamlining transparency rules on structured digital reporting of annual financial statements by companies (CP23/2).
1. New multi-factor authentication: The FCA states that it has and will further enhance system security by introducing multi-factor authentication when logging onto the following systems – as cited:
– Connect, Reg Data, Online Invoicing (Fees Portal) and/or Shared Intelligence Service (SIS) and
– Electronic Submission System (ESS).
Multi-factor authentication means that each time a user logs into the system, it will be requested to submit a one-time code. The code will be generated via one of the following three methods – as cited:
– An authenticator app.
– A text message.     
– An automated phone call.
Implementation has already begun for the Connect, Reg Data, Online Invoicing (Fees Portal) and/or Shared Intelligence Service (SIS) and will follow in March for the EES.
Once a user logs in for the first time after introduction, it will be asked to turn on the new multi-factor authentication, so the FCA.
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2. Periodic financial reporting obligations of third country issuers and exemptions therefrom:The FCA has recently received several questions concerning the recognition of annual, semi-annual, and consolidated financial reports that were prepared in accordance with the Generally Accepted Accounting Principles (GAAP) of the People’s Republic of China. As a consequence, the regulator now clarifies that all reports prepared in accordance with the Chinese GAAP – regardless of which financial years they cover – are deemed to be satisfying the UK listing and transparency rules. Therefore, issuers with offices outside the UK complying with Chinese GAAP are exempt from the following rules:
– DTR TP 1(36) and DTR TP 1(38) which require the reporting of financial statements in accordance with EU-adopted IFRS
– DTR 4.1.6R(1) and DTR 4.2.4R(1) which require consolidated or condensed financial statements and accounts of parent companies to be prepared in accordance with UK-adopted IFRS and UK law.
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3. The FCA’s consultation on Streamlining transparency rules on structured digital reporting of annual financial statements by companies: In this context, the FCA only reminds stakeholder of the close of the comment period and encourages feedback on this matter.
To recall, in the consultation the FCA sought feedback on
– the implementation of own rules as regards the reporting in the „Single Electronic Format“ thereby repealing the application of the currently applied EU Retained ESEF Regulation;
– imposing a new obligation on issuers requiring them to tag their annual financial statements using a ‘generally accepted taxonomy’ for annual corporate reporting in UK regulated markets; and
– issuing guidance on ‘generally accepted taxonomies’ in a new Technical Note.