Welcome to the weekly highlights from the Lexis®PSL Corporate team for the week ending 9 March 2017, which provide news updates and a comprehensive list of dates for your diary and. This week’s edition features: the FCA’s Quarterly Consultation Paper No. 16 (CP17/6), the AFME’s report on challenges associated with raising risk capital for SME high growth companies in the EU, PERG’s 'Good practice reporting guide for portfolio companies', the FRC’s new report on audit quality, analysis of the trend of rising shareholder activism, Tax analysis of the Spring Budget 2017 and Employment analysis considering how employers can prepare for the gender pay gap reporting obligations. This analysis is part of the Lexis®PSL Corporate team’s news offering. Some of the links require a LexisPSL subscription. If you are not a subscriber, you can take a free trial here. Headlines Equity capital markets The Financial Conduct Authority (FCA) has published Quarterly Consultation Paper No. 16 (CP17/6), in which it consults on proposed miscellaneous amendments to the FCA Handbook. The FCA is proposing to make changes to, amongst other things, the Market Conduct sourcebook (MAR) relating to ESMA’s guidelines on commodity derivatives, the Prospectus Rules (PR) 1.2.3R in anticipation of the Prospectus Regulation coming into force and minor amendments to the Listing Rules (LR) Appendix 1, PR Appendix 1 and the Glossary and the Recognised Investment Exchanges sourcebook (REC) 3.9 and MAR 5.6 and minor amendments to REC 2.3. The deadline for comments is 3 April 2017 with respect to the proposed changes to PR 1.2.3R, and 3 May 2017 with respect to the other proposals. AFME recommends single EU framework for start-ups The Association for Financial Markets in Europe (AFME) has published a new report examining challenges associated with raising risk capital for small and mid-size (SME) high-growth companies in the EU. The aim of the report is to inform policymakers about the challenges facing Europe’s high growth companies in obtaining crucial early stage financing. The report identifies the main barriers preventing the creation and growth of businesses in Europe and makes the following recommendations to address them: establishing a single EU framework for start-ups with standard rules across EU Member States; improving awareness among entrepreneurs of how to gain and retain risk capital investors; creating a single market for business angel investors by aligning best practices and ensuring consistent tax incentives; creating access to better exit opportunities for business angels and crowdfunders; providing incentives for investing in VC funds; encouraging investment in the asset class and promoting pension savings in the EU28 generally; developing the venture debt market in Europe to provide the necessary funding for VC-backed businesses to reach their next milestone; building a favourable environment for access to capital markets by small businesses via the development of SME advisory ecosystems of issuers, advisors, entrepreneurs, academics and European centres of innovation; and further initiatives to tackle the decline in initial public offerings (IPOs). Private equity Private Equity Reporting Group updates good reporting guidance The Private Equity Reporting Group (PERG) has published the latest version of the 'Good practice reporting guide for portfolio companies'. The aim of the guide is to assist private equity owned portfolio companies to improve the transparency and disclosure in their financial and narrative reporting by highlighting good practice examples. The updated report includes examples of good practice aimed at helping portfolio companies with their narrative reporting, as well as details on how to comply with the 2014 changes to the Walker Guidelines on disclosure and transparency in private equity. Audit FRC outlines best practice for audit quality procedures The Financial Reporting Council (FRC) has published a report on audit quality. The new report states that audit companies must improve quality control procedures by looking at examples of good practice, in particular, strong leadership and better culture are required in audit firms to achieve improvements faster and get greater consistency of quality. It sets out examples of good quality including a ‘three lines of defence’ model to help understand how audit quality procedures interact. Corporate governance Shareholder activism—a rising global tide In the analysis, Nick O’Donnell, partner at Baker McKenzie, examines the continuing rise in shareholder activism and considers current trends along with how in-house lawyers might respond. This analysis follows an FTI Consulting update, published on 16 February 2017, which found that the UK is exposed to a high risk following an increase in investor activism outside the United States. The author analyses the meaning of 'shareholder activism', the common goals, the key strategies and the tactics used by activist shareholders, the type of companies or sectors that are vulnerable to this trend and advice that in-house lawyers can provide to their boards in order to reduce the risk of aggressive shareholder activism. For details see News Analysis, Shareholder activism—a rising global tide. Relevant updates from other practice areas Tax Spring Budget—Tax analysis This analysis provides a summary of the key business tax announcements made in the Chancellor’s Spring Budget on 8 March 2017. For details see News Analysis, Spring Budget 2017—Tax analysis. Employment Are employers ready for gender pay gap reporting? In this analysis, Akua Reindorf, barrister at Cloisters, and Jane Russell, barrister at Essex Court Chambers, explain what the gender pay gap reporting requirement means in practice for employers. They consider the steps which employers should be taking to ensure compliance with the forthcoming gender pay gap reporting requirements. For details see News Analysis: Are employers ready for gender pay gap reporting? Dates for your diary Date Subjects covered 10 March 2017 Deadline for national competent authorities subject to ESMA's guidelines on the Market Abuse Regulation for persons receiving market soundings to notify ESMA. 17 March 2017 Deadline for the government's call for evidence seeking views on possible reasons for the increase in limited partnerships and whether changes are needed to the wider framework. Following a recent increase in the number of limited partnerships registered in Scotland in comparison to those registered in England, Wales and Northern Ireland, the government has expressed concerns that some of them are being used for criminal activity. A call for evidence has been launched seeking views on possible reasons for the increase and whether changes are needed to the wider framework. 17 March 2017 Deadline for the European Commission's public consultation into the Capital Markets Union (CMU). The CMU is the EU-wide plan to strengthen capital markets and investment in the long term. Evidence-based feedback and specific operational suggestions are sought. 24 March 2017 Deadline for the government's open call for evidence on the extent to which the identification doctrine is deficient as a tool for enforcement against larger companies. 30 March 2017 Deadline for comments on FRC consultation on views on which corporate reporting issues it should research in the immediate future. Questions include whether the FRC should continue with its research activities at the current level, or increase or decrease the extent of its work in this area. 31 March 2017 Deadline for comments on FRC consultation on proposed amendments to FRS 101—Reduced Disclosure Framework. In the consultation paper, Financial Reporting Exposure Draft (FRED) 66, the FRC proposes limited amendments to FRS 101 in relation to IFRS 16 Leases. FRED 66 asks respondents whether they agree that qualifying entities should be required to continue to provide detailed analyses of leases. 31 March 2017 The European Union (Notification of Withdrawal) Bill is expected to receive Royal Assent by this date.