Equity Capital Markets
1. FCA publishes observations on assessing issuer disclosure obligations which arise from a cyber incident
The Financial Conduct Authority has published Primary Market Bulletin 66 which includes its observations, following discussions with issuers and advisers, on issuer disclosure obligations, particularly under the UK Market Abuse Regulation (MAR), which may arise in the context of a cyber incident. Headline observations include:
Initial assessment and disclosure:
Not every cyber incident will be inside information but the FCA suggests that it may be prudent to begin from the assumption that information relating to an incident could be inside information and then undertake an assessment relative to the scale and nature of the incident, its reputational impact, and any immediate or anticipated disruption to the issuer's operation or financial position.
The FCA also reminds issuers that, before making a disclosure under MAR, they are afforded a short period of time if it is necessary to clarify the situation, for example the nature, scale and immediate impact of the incident.
In addition, if the incident affects an issuer’s ability to interact with its customers or clients and it makes proactive or reactive communications in response, it should also consider its disclosure obligations. Indeed, it may need to issue a holding announcement, if it believes there is a danger of inside information leaking before the facts and their impact can be confirmed.
Delaying disclosure under MAR
The FCA observes that the ability to delay disclosure may be particularly relevant if an issuer is negotiating with attackers and the outcome of those negotiations would be jeopardized by immediate disclosure.
Vulnerabilities in cyber security systems may, in themselves and even without an active incident, constitute inside information, immediate disclosure of which could make an attack more likely and therefore be prejudicial to an issuer's legitimate interests.
The ability to delay the disclosure of inside information relies on the ability of the issuer to keep it confidential. On the basis that it is likely that an attacker is also in possession of that same information, an issuer will need to continually assess whether it remains confidential.
Subsequent disclosures
An issuer should carefully and continuously monitor whether changes in its circumstances mean it becomes obliged to make an announcement under MAR.
If the incident is ongoing and new information comes to light, then inside information may arise. This might concern the ongoing impact on the issuer’s operations, the likely duration of the incident, and reputational issues that may damage customer or investor confidence.
Even when an incident is fully resolved, inside information may arise where there is a material impact on the issuer’s financial position. This could include: the costs and impact of remediation, increased cyber protection costs, and the need for the issuer to revise its previously stated outlook or financial targets.
The FCA reminds issuers that justifying non-disclosure of information by offsetting negative and positive news is not acceptable.
Sharing inside information with government departments, law enforcement, regulatory or crime agencies
The FCA acknowledges that issuers may be required, requested, or choose to share knowledge of impending or actual cyber incidents with government departments, law enforcement, regulatory or crime agencies in jurisdictions relevant to them. In doing so, an issuer sharing details of a cyber incident which amount to inside information will need to consider whether this is lawful under MAR – that is where the disclosure is necessary and the person disclosing the information is acting in the normal exercise of their employment, profession or duties.
Further guidance is included on when this may be permissible and the issues to be considered when doing so. In addition, the FCA encourages issuers to inform recipients that the information they are about to receive is or could be inside information, and that they should keep it confidential and be aware of their own obligations under MAR. It may also be prudent to document the information that has been disclosed, whether the issuer considers it inside information, and their justification for disclosing it.
Other issues of note
The Bulletin also covers various other issues including a consultation on a Technical Note (803.1) which focuses on the FCA's expectations as regards comply or explain in the context of its new sustainability disclosure requirements. This consultation dovetails with the FCA's publication of its Policy Statement (PS26/19) on which further details can be found in Item 6 below.
AGMs in 2027
2. LSE publishes Dividend Procedure Timetable for 2027
The London Stock Exchange has published its Dividend Procedure Timetable for 2027, which it expects issuers, both on the Main Market and AIM, to follow when declaring dividends. By way of reminder, where a dividend timetable does not follow the Timetable, it must be approved by the LSE's Corporate Actions team in advance of the announcement of the dividend. The Timetable also prescribes the content of such announcements.
From 11 October 2027, the UK will move to a T+1 settlement cycle. The Timetable notes that, while Record dates will remain unchanged, from that date associated Ex Dividend dates and the Record date will fall on the same business day. As a transitional measure, securities will not be marked Ex Dividend during the period from 4 October to 18 October 2027, to allow the market to move to the new settlement cycle. The first Ex Dividend date on a T+1 basis will be 22 October 2027.
For further details on the move to a T+1 settlement cycle, see AGC Update, Issue 75 – Item 5.
3. Glass Lewis publishes 2026 AGM season review
Glass Lewis has published its 2026 review of the UK Proxy Season.
Key trends identified include:
Remuneration
- The competitiveness of UK remuneration remained a key consideration for FTSE 350 companies, with quantum increases the most prevalent policy amendment during 2026 and with benchmarking against peers being cited by two-thirds of companies proposing such increases.
- Eight companies introduced hybrid plans, mainly those operating in sectors where performance can be volatile or cyclical. The majority of these proposals received more than 20% votes against.
- There was a notable reduction in dissent (20% voting against) in relation to the approval of remuneration reports. No remuneration reports were defeated. The proposals receiving the highest levels of dissent were linked to significant increases in fixed pay, excessive incentive payouts and insufficient responses to previous shareholder concerns.
Diversity and director re-election
- The FTSE Women Leaders Review’s 40% target for board representation became due at the end of 2025, increasing expectations for FTSE 250 companies.
- Average board gender diversity levels at FTSE 350 companies increased to 44% in 2026 (2025: 43%). Nonetheless, a third of FTSE 250 companies fell short of the 40% target, resulting in Glass Lewis making 18 negative voting recommendations.
- The re-election of two nomination committee chairs received significant shareholder dissent, likely reflecting concerns around failure to meet gender diversity targets and limited disclosure regarding the actions taken to address these shortfalls.
- Other issues leading to negative voting recommendations in the context of director re-elections included: less than 75% attendance at board meetings (10 negative recommendations); poor chair succession planning and insufficient board ethnic diversity (7 negative recommendations each); poor remuneration practices (5 negative recommendations); and insufficient response to shareholder dissent (4 negative recommendations).
Shareholder activism
- Shareholder activism continued to gain momentum, while Glass Lewis suggests that uncertainty remains around the future of virtual-only general meetings - this despite the UK government committing to clarify the law on the subject as part of its Modernising Corporate Reporting reform agenda (for more on which, see AGC Update, Issue 86 – Item 1).
- Glass Lewis highlights Saba’s activist campaign targeting UK investment companies as part of which it successfully ousted the boards of two investment trusts and (unsuccessfully) put forward its own nominees at an internally-managed REIT for the first time.
Meeting format
- In-person meetings remained the most common general meeting format (75.1% of the FTSE 350), with virtual-only meetings remaining uncommon (2.7%) – likely reflecting uncertainty over regulatory reform and shareholder views on the format.
For a reminder of Glass Lewis' proxy voting policy guidelines for 2026, see AGC Update, Issue 76 – Item 5.
By way of reminder, Glass Lewis has announced that it will retire its Benchmark Policy voting guidelines from September 2027, adopting instead a new framework based on multiple research perspectives enabling customised voting approaches.
Georgeson has also published its 2026 European AGM Season Review which includes an overview of UK AGMs in the FTSE 100.
Narrative and Financial Reporting
4. FRC publishes Annual Review of Corporate Reporting
The Financial Reporting Council has published its Annual Review of Corporate Reporting for 2025/2026. As in past years, the report provides information that is particularly relevant to preparers and auditors of financial statements, as well as investors.
Example disclosures which represent good quality application of reporting requirements that companies should consider when preparing their annual reports and accounts are included. The 'Highlights' section also provides an overview of the FRC's activities and findings in 2025/26, the FRC's expectations for reports next year and key reporting developments. The review concludes with a helpful reminder of the scope of the FRC's Corporate Reporting Review (CRR) Team's work and how companies should interact with them.
Overview of findings
The review found that the quality of corporate reporting by FTSE 350 companies has been maintained, while the gap in quality between larger listed companies and other companies is narrowing. The proportion of FRC reviews leading to substantive enquiry letters also fell for the second consecutive year, reflecting a positive trend in reporting quality across the FRC’s risk-based sample.
The review identifies cash flow statements, financial instruments, impairment of assets, fair value measurement and revenue as the most common areas where substantive questions were raised during the year.
Looking ahead, the FRC highlights the need for companies to prepare for significant forthcoming reporting developments, including implementation of IFRS 18, revisions to FRS 102 and the introduction of Provision 29 of the UK Corporate Governance Code 2024.
Monitoring activities and outcomes
The number of restatements prompted by the review work of the FRC's CRR team fell for the second year in a row, consistent with the number of reviews which resulted in substantive queries. However, four restatements affected profit (2025: one), with the majority of restatements continuing to arise in companies outside of the FTSE 350.
In more detail:
- The CRR performed 248 reviews this year compared with 222 last year, in part because more reviews were more targeted thematic reviews.
- Reviews of FTSE 350 companies, which are selected over a five-year cycle, made up slightly less than 50% of this work.
- 'Substantive letters' – which are written when the CRR needs additional information or explanations – were sent in only 28% of reviews, compared with 37% last year. 20% of reviews of FTSE 350 companies resulted in a substantive letter being sent (2025: 26%) as compared to 35% for companies outside the FTSE 350 (2025: 44%).
- 'Required references' – where interaction with the CRR is required in subsequent annual reports in light of more significant changes being required – fell to 14 (2025: 18).
Selected other issues
The FRC has historically reported on the 'top ten' issues raised in the CRR's review work. Following feedback, it has limited this year's review to the top five in order to enable it to also highlight useful insights in selected other areas including:
- Sustainability: The FRC notes a continued fall in the number of substantive queries raised. These were confined to compliance with the Climate-related Financial Disclosures (CFD) in the Companies Act 2006. That said, the FRC did raise a 'notable' number of observations in relation to TCFD, CFD and SECR reporting.
Specifically, in relation to TCFD and CFD disclosures, the FRC raised most observations in relation to the 'metrics and targets' pillar, including, in TCFD disclosures, insufficient explanation of performance against targets and the basis for not disclosing material Scope 3 emissions, and, for CFD reporting, a lack of clarity over which emissions were covered by targets and limited descriptions of climate-related key performance indicators.
The FRC reminds reporters that relevant disclosures should be clear, concise and entity-specific and that all CFD disclosure requirements should be provided in the strategic report as opposed to cross-referencing to information disclosed elsewhere. - Alternative performance measures: The FRC observed improved reporting but takes the opportunity to remind companies that APMs should be reconciled to the closest line items, subtotals or totals presented in the financial statements and not presented in ways that give them greater prominence than amounts stemming from the financial statements.
- Corporate governance reporting: No substantive issues were raised in relation to governance reporting where the CRR's focus was on the adequacy of explanations for departures from the UK Corporate Governance Code. That said, the FRC notes that it raised a small number of observations where it was felt that governance reporting could be improved.
- Structured digital reporting: The CRR worked with the FRC's Digital Reporting & Taxonomies team for the first time this year. The Review sets out a number of areas for improvement in digital reporting, including the need for more consistent tagging and in relation to the use of custom extensions, and ensuring better 'anchoring' of those extensions.
Expectations for 2026/2027 reports
The review also sets out the FRC's key expectations for companies when preparing their next annual reports and accounts. Companies should ensure that:
- There is a sufficiently robust review process in place to identify common technical compliance issues.
- Effective oversight and control is maintained when AI is used in the corporate reporting process.
- The report and accounts, as a whole, tell a consistent and coherent story throughout the narrative reporting and financial statements as well as being clear, concise and understandable.
- Accounting policies disclosed are company-specific, including all material and relevant information.
- The strategic report includes a fair, balanced and comprehensive review of the company's development, position, performance and prospects.
- Findings from the FRC's thematic review reports (which are linked to from the Review) are considered, to the extent relevant.
- Sufficient assessment and preparation is undertaken for any upcoming changes in reporting standards.
For a reminder of the FRC's review for 2024/2025, see AGC Update, Issue 71 – Item 8.
Economic Crime and Corporate Transparency
5. First directors fined for failing to verify their identity
Three directors have become the first to be fined for failing to verify their identity at Companies House. The convictions were secured by the Insolvency Service during proceedings brought at the City of London Magistrates' Court.
By way of reminder, it is now an offence for an individual to act as a director of a UK incorporated company or as a member of a UK Limited Liability Partnership if they have not verified their identity within the stipulated timeframe.
Newly appointed directors have been required to verify their identity with Companies House before acting as a director from 18 November 2025. Existing directors are required to verify during a 12-month transition period, when filing the company’s next confirmation statement.
The sanctions imposed were as follows:
- Jill White of White (Reading Properties) Limited was fined £317 for taking part in board decisions and signing company accounts while remaining unverified.
- Marc Dillion, a director of the same company, had verified his own identity but was prosecuted after failing to take reasonable steps to prevent White from continuing to act as a director while unverified, despite being aware of the legal requirement. The Court stated that he had a legal responsibility to ensure the company did not allow an unverified individual to continue acting as a director. He was fined a total of £515.
- Modinat Banjo, director of J Isogony Apparel Limited, continued acting as a director despite also failing to complete the mandatory identity verification process. She signed and delivered company accounts while remaining unverified. She was similarly convicted after failing to file a confirmation statement within the statutory period. She was fined £197.
For a reminder of identity verification requirements for directors, LLP members and persons with significant control, see AGC Update, Issue 73 – Item 1.
The successful prosecutions underscore the fact that the identity verification requirements are a cornerstone of the reforms being introduced under the Economic Crime and Corporate Transparency Act, seeking to ensure that those setting up, running and controlling companies are who they claim to be. They also demonstrate that directors have responsibilities not only for their own compliance but also for ensuring that unverified individuals do not continue acting as directors on behalf of a company.
Sustainability
6. FCA publishes rules and draft guidance on aligning listed issuer sustainability disclosures with ISSB standards
The UK Financial Conduct Authority (FCA) has published Policy Statement PS26/19 containing its rules requiring listed issuers to make climate and sustainability disclosures against the UK Sustainability Reporting Standards (UK SRS) on a 'comply or explain' basis. The new rules replace existing climate-related financial disclosures and apply to accounting periods starting on or after 1 January 2027, with first reporting in 2028.
The rules follow the FCA's January 2026 consultation on amending the UK Listing Rules (UKLR) to align listed issuers’ sustainability disclosures with the UK SRS.
Most of the requirements proposed in the consultation have been adopted. A key change is that all categories of disclosures will be subject to a 'comply or explain' approach, whereas the consultation had proposed that climate disclosures (other than in relation to Scope 3 emissions) would be mandatory.
Transitional reliefs are available, including in relation to Scope 3 emissions and non-climate related sustainability (S1) disclosures.
As noted in Primary Market Bulletin 66 | FCA, the FCA is also consulting on a technical note to help issuers apply the 'comply or explain' approach.
We will issue a detailed overview of the Policy Statement and the consultation as soon as possible.
7. Simplified ESRS and Voluntary Standards regulations published in EU Official Journal
Delegated Regulation (EU) 2026/1563 (Simplified ESRS Regulation), which seeks to simplify the original EU Sustainability Reporting Standards (ESRS), was published in the EU Official Journal on 21 September 2026. This follows its July 2026 adoption by the EU Commission and the two-month scrutiny period by the EU Parliament and Council. The Simplified ESRS Regulation includes minor amendments and corrections from the version adopted by the Commission. The Simplified ESRS Regulation enters into force on 10 November 2026 and applies to financial years beginning on or after 1 January 2027.
For financial years beginning between 1 January and 31 December 2026, the Simplified ESRS Regulation allows reporting entities to choose whether to use:
- the original ESRS including the phase-in reliefs introduced by Delegated Regulation (EU) 2025/1416;
- the original ESRS including the phase-in reliefs introduced by Delegated Regulation (EU) 2025/1416 and with the eight reliefs introduced by Annex 1 to the Simplified ESRS Regulation; or
- the simplified ESRS.
Importantly, reporting entities must specify which version of the ESRS is used. From financial years starting from 1 January 2027, use of the Simplified ESRS is mandatory.
Delegated Regulation (EU) 2026/1560 (Voluntary Standards Regulation) has also been published in the Official Journal. It introduces voluntary reporting standards for entities with 1,000 employees or less in the preceding financial year (protected undertakings) that are not in-scope of the Corporate Sustainability Reporting Directive (CSRD) but which may face information requests from larger business partners that are in-scope of the reporting requirements. The Voluntary Standards Regulation enters into force three days after publication in the Official Journal and applies from financial years beginning on or after 1 January 2027. EFRAG has updated its non-mandatory guidance on the Voluntary Standard and plans to update its digital template in November 2026 to reflect changes in the Voluntary Standard.
For background information on the ESRS simplification process, the changes made to simplify the original ESRS and the concept of the value chain cap, which was introduced as part of the Omnibus 1 package to prevent trickle down of the burden of reporting obligations to smaller business partners, see EU adopts simplified ESRS and sustainability reporting standard for voluntary use.
8. EU publishes regulation on data centre rating scheme and call for evidence on data centre sustainability standards
The EU Commission has published a package of documents to enhance energy efficiency and sustainability of EU data centres. The package includes (i) a call for evidence on a proposed regulation to establish minimum performance standards (MPS) to reduce the energy consumption and environmental footprint of data centres; and (ii) a delegated regulation establishing a rating scheme and sustainability label for data centres with a capacity above 500kW.
The call for evidence seeks views on (i) the need for, and feasibility of, MPS for EU data centres and on the most appropriate way to establish them; (ii) which indicators should have MPS; and (iii) the thresholds that should be set. Responses should be submitted on or before 14 December 2026. The Commission is expected to adopt a proposal for an MPS Regulation under the Energy Efficiency Directive ((EU) 2023/1791) covering the energy efficiency, water use, waste heat reuse, and other selected sustainability criteria for data centres, in Q2 2027.
The rating scheme delegated regulation, which complements the reporting scheme for data centres introduced in 2024, is now subject to a two-month scrutiny by the EU Parliament and Council before entering into force. The first sustainability labels for data centres are expected to be displayed in 2027.
Apart from being of interest to data centre owners and operators and cloud service providers, the data centre rating scheme and MPS call for evidence will also be of interest to companies that wish to understand the sustainability footprint associated with their data centre use including for reporting under the CSRD and to support procurement decisions.
Authors: Will Chalk, Partner; Shan Shori, Expertise Counsel; Becky Clissmann, Sustainability Counsel and Marianna Kennedy, Senior Associate.
If you would like to receive future Ashurst Governance & Compliance updates, please click here.
