The FCA have published temporary measures on the publication of half-yearly financial reports along with commentary on (i) addressing coronavirus-related uncertainties in the ‘going concern’ assessment and (ii) their expectations of market conduct in the context of increased capital raising events and around inside information, particularly in light of alternative working arrangements due to coronavirus.
DTR 4 listed companies (i.e. Main Market companies whose home state is the UK) will be allowed an additional one month to publish their half yearly financial reports (from three to four months) without facing enforcement action for breach of DTR 4.2.2R.
Due to the pandemic companies’ financial statements may need to include remarks in the auditors opinion on the ‘going concern’ assessment and issuers are concerned how this will be perceived in the market. The FCA considers that in these unusual times/circumstances, previous market practice needs to adjust and the market should not draw unduly adverse inferences from these disclosures, nor from issuers changing their financial calendars to extend the filing of their yearly or half yearly financial reports.
The FCA, along with other institutional bodies, continue to encourage companies to make reasonable efforts to provide the usual degree of engagement with shareholders at this time. This includes considering ‘soft pre-emption rights’ so shareholders can participate, where possible, in any capital raising.
The FCA has also published Market Watch 63 which set out its expectations around the identification and handling of inside information in light of increased capital raisings and new working arrangements. It reminds issuers of the importance of identifying inside information and what constitutes inside information may have changed in light of coronavirus. In particular, issuers should:
During this period, the FCA have highlighted that they will be monitoring, amongst other things, inside information disclosures and price movements to identify any behaviours which may impact the integrity and orderly functioning of the market.
Primary Market Bulletin Issue No.28
Market Watch Issue 63