Primary Market Bulletin 44

The Financial Conduct Authority, FCA, has published the 44th version of its Primary Market Bulletin. This latest bulletin deals with the FCA’s new disclosure and reporting requirements of listed companies as regards diversity and inclusion, the status of the FCA’s consulted Technical Note (TN 606.1) as regards the need to publish a prospectus for security issues which are issued as part of a scheme arrangement, and the use of multi-media when publishing regulated information. The key content is briefly summarized below; for more detailed, comprehensive information, please refer to the original document.
(1) New disclosure and reporting requirements of listed issuers as regards diversity and inclusion: In this context, the FCA briefly addresses who is in-scope of the new reporting and disclosure requirements, namely „UK and overseas issuers with equity shares, or certificates representing equity shares, admitted to the premium or standard segment of the FCA’s Official List, excluding open-ended investment companies and shell companies“. The FCA further elaborates on its expectations as regards the disclosure of listed issuers. Such disclosures must at least contain an indication as to whether or not the company has met the target of
– 40% of the Board of Directors are women;
– at least one senior position in the Board of Directors is occupied by a woman; and
– at least one member of the Board of Directors has got a minority ethnical background.
Additional details must be provided on the composition of the board in terms of sex, gender, and ethnic background, the approach taken for collecting any such data, and on a company’s diversity policy, including its targets, and how it is applied throughout the firm. If a company does not have any such policy, it must explain why not. In this context, the FCA also describes steps that firms should take to prepare for the upcoming disclosure and reporting requirements.
(2) Security issues as part of a scheme arrangement: Although the FCA does not agree with the respondents opinion, that such issuances do NOT constitute a traditional public offer and thus should not require the disclosure of a prospectus, the FCA will refrain from implementing the above noted technical note. Hence, security issues that are issued as part of a scheme arrangement, will NOT require the publication of a prospectus. The FCA also states in this context that the currently consulted reform to the UK prospectus regime would also exempt securities issues as part of a scheme arrangement from the definition of „public offer“.
(3) Using multi-media when publishing regulated information: The FCA reemphasizes that firms MUST disclose any regulated information via Primary Information Providers (PIPs). Whether or not PIPs integrate the ability to attach recordings, speeches, video clips, or similar content, such „additional disclosures“ CANNOT and will not replace the regulated dissemination obligations of listed issuers. The use of multi-media to publicize inside information can only function as a „add-on“ to go beyond what’s required by law: and that is: the information must be communicated in an „unedited full text“ and must be distributed by PIPs in same fashion in an industry typical standard. Additionally, firms must be aware that they are NOT permitted to make disclosures that may also serve marketing purposes.