Corporate weekly highlights—6 June 2019

This week’s edition of Corporate highlights includes our Market Tracker Trend Report—Trends in UK Equity Capital Markets (June 2019), an FCA policy statement relating to the implementation of the revised Shareholder Rights Directive and a further FCA policy statement relating to the implementation of the Prospectus Regulation.

In this issue:

Equity Capital Markets

Market Tracker Trend Report—Trends in UK Equity Capital Markets (June 2019)

Corporate analysis: Market Tracker’s annual report on trends in UK Equity Capital Markets reviews IPOs and secondary fundraisings from 2016 through to 2018 on both the Main Market and AIM. The report also looks at legal and regulatory developments in 2018 and the first quarter of 2019, and analyses current hot topics including the effect of recent reforms to the Main Market IPO process and the impact of Brexit on risk factors in prospectuses.

A copy of the report can be found here.

Highlights of the report include:

  1. a three-year comparison of IPO and secondary offering activity on the Main Market and AIM, with a focus on transaction volume, gross proceeds and market capitalisation

  2. analysis of the headline IPOs during 2018

  3. industry sector review, summarising emerging sector trends in new listings

  4. geographical trends in new listings and a comparison of country of incorporation and country of operation

  5. summary and analysis of recent changes to the Main Market IPO process and its impact

  6. in-depth look at cancelled and postponed IPOs in 2018

  7. overview of the impact of Brexit on ECM activity, and

  8. a detailed look at recent and upcoming legal and regulatory developments

This report includes expert commentary and market insight from leading practitioners, including:

  1. Mark Austin, Partner, Freshfields Bruckhaus Deringer LLP

  2. Rosalie Chadwick, Head of Corporate Finance, Pinsent Masons LLP

  3. Jamie Corner, European Counsel, Davis Polk & Wardwell London LLP

  4. Dan Hirschovits, Partner, Davis Polk & Wardwell London LLP

  5. Clive Hopewell, Partner, Head of International Capital Markets, Bird & Bird LLP

  6. Alexander Keepin, Partner, Corporate Finance and Head of Mining, Bryan Cave Leighton Paisner LLP

  7. James Spinney, Head of Capital Markets, Strand Hanson

  8. Julian Stanier, Corporate Finance Partner, Pinsent Masons LLP

  9. Marcus Stuttard, Head of AIM & UK Primary Markets, London Stock Exchange Group

  10. Tim Ward, CEO, Quoted Companies Alliance

  11. Martin Webster, Corporate Finance Partner, Pinsent Masons LLP

  12. Alasdair Weir, Senior Associate, Pinsent Masons LLP

  13. Simon Witty, Partner, Davis Polk & Wardwell London LLP

FCA publishes PS19/12 and near-final Handbook rules to implement the Prospectus Regulation

The FCA has published a policy statement (PS19/12) setting out the near-final rules on the changes the FCA plans to make to the Handbook to align it with the Prospectus Regulation. It also summarises the feedback received to the consultation paper (CP19/6) and the FCA's response. The consultation closed on 28 March 2019.

For further information, see: LNB News 31/05/2019 38.

FCA fines Cathay International, its CEO and finance director for breaches of the Listing Principles and DTRs

The FCA has published decision notices concerning Cathay International Holdings Limited and two of its directors, Mr Jin-Yi Lee and Mr Eric Siu. The FCA considers that Cathay breached the FCA’s Listing Principles and Disclosure Rules and Transparency Rules and has imposed a fine of £411,000. In the FCA’s view, Mr Lee was knowingly concerned in the company’s breaches and so has been fined £214,300. The FCA also considers that Mr Siu was knowingly concerned in one of the company’s breaches and so has been fined £40,200.

For further information, see: LNB News 03/06/2019 21.

The London Stock Exchange publicly censures and fines Real Good Food

On 30 May 2019, the London Stock Exchange (LSE) announced in AIM Disciplinary Notice 21 that it had publicly censured Real Good Food plc and fined it £450,000 (discounted to £300,000 for early settlement) for breaches of rules 10, 13, 17, 19 and 31 of the AIM Rules for Companies.

For further information, see: LNB News 30/05/2019 30.

Corporate Governance

ICSA consultation on effectiveness of independent board evaluation in the UK listed sector

ICSA: The Governance Institute (ICSA) has published a consultation aimed at assessing the quality of independent board evaluation in the UK listed sector, as well as ways in which it might be improved. The review is being carried out at the request of the Department for Business, Energy and Industrial Strategy (BEIS). The deadline for responses to the consultation is 5 July 2019.

For further information, see LNB News 31/05/2019 33.

FCA publishes final rules implementing the revised Shareholder Rights Directive

The Financial Conduct Authority (FCA) has published a policy statement (PS19/13) following its consultation paper (CP19/7) on proposals to (i) implement requirements of the revised Shareholder Rights Directive (SRD II) and (ii) improve shareholder engagement. The policy statement summarises the feedback the FCA received to the consultation—which closed on 27 March 2019—and the FCA’s response to it. It also sets out the final rules.

For further information, see: LNB News 31/05/2019 49.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary

DateDevelopment
7 June 2019Closing date for the call by the Department of Business, Enterprise & Industrial Strategy (BEIS) for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing in February 2019 the terms of reference for an independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The Brydon Review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audit on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs, as well as serve the interests of other stakeholders and the public interest.
For further information, see: LNB News 10/04/2019 85.
10 June 2019HM Treasury has issued a consultation document on the steps that the UK government proposes to take to meet the UK’s obligation to transpose the Fifth Money Laundering Directive (MLD5) into national law and on the potential costs and benefits of the changes considered.
In implementing MLD5, the government is catering for the scenario where an implementation period is in place after the UK leaves the EU. During this implementation period common rules will remain in place, meaning that EU law will continue to have effect in the UK in the same way as now until the end of an agreed implementation period. This would require the UK to implement MLD5 by January 2020.
For further information, see: LNB News 15/04/2019 77.
10 June 2019EU Member States shall by this date bring into force the laws, regulations and administrative provisions necessary to comply with the majority of the requirements of Directive EU 2017/828 amending the Shareholder Rights Directive (the Amending Directive).
The principal amendments to be made by the Amending Directive relate to identification of shareholders; facilitation of the exercise of shareholder rights; investor engagement policy; directors' remuneration and related party transactions.
For further information, see: LNB News 14/03/2017 117LNB News 03/04/2017 138LNB News 05/04/2017 148LNB News 20/05/2017 1.
10 June 2019Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 come into force.
These Regulations are laid to implement in part Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement in the UK. Articles 9a and 9b of the Directive are implemented to ensure that the implementation works with the framework already in place in UK legislation with regards to directors’ remuneration.
For further information, see LNB News 09/04/2019 6.
10 June 2019Proxy Advisors (Shareholders’ Rights) Regulations 2019 come into force.
These provisions are made to transpose Article 3j of the revised EU Shareholder Rights Directive (SRD II) into UK law, in line with the UK’s obligations as a member of the EU. Article 3j of SRD II places requirements on proxy advisors, which primarily offer voting services and/or advice to shareholders in publicly listed companies, to make certain disclosures about the way in which they conduct their business.
For further information, see: LNB News 14/05/2019 53.
11 June 2019BEIS launched a consultation on 11 March 2019 seeking views on the recommendations made by the Independent Review of the Financial Reporting Council (FRC) to create a new regulator responsible for audit, corporate reporting and corporate governance. The consultation will close at 11:45 pm on 11 June 2019.
For further information, see: LNB News 12/03/2019 12.

Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—31 May 2019.

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