The Financial Conduct Authority (FCA) has published Primary Market Bulletin No.33 (PMB No.33) featuring Brexit-related changes for EEA audit firms, details of their new online portal for submitting major shareholdings notifications (TR-1 Form), their review work on issuers’ compliance with major shareholding notifications and their response to feedback received on Delayed Disclosure of Inside Information.
Delayed disclosure of inside information
Our article on PMB No. 31 summarises the FCA’s review on delayed disclosures of inside information. Since then the FCA has received feedback and confirms the following:
Major shareholding notifications
DTR 5 and Total Voting Rights (TVR) announcements: an issuer in scope must, at the end of each calendar month during which an increase or decrease has occurred, disclose to the public (i) the total number of voting rights and capital in respect of each class of share which it issues (ii) the total number of voting rights attaching to shares of the issuer which are held by it in treasury.
Between 1 January 2017 and 1 July 2020 the FCA conducted a review of TVR announcements and although the level of compliance was generally good, they noted the following:
The FCA also identified 138 instances where major shareholders had not disclosed their new positions after the change to the TVRs, assuming a 3% disclosure threshold.
From a practical perspective therefore:
New process for submitting TR-1: Since 22 March 2021, all TR-1 notifications in relation to voting rights held in an issuer admitted to trading on a UK regulated market must be submitted to the FCA via the major shareholdings notification portal using the FCA's Electronic Submission System. Investors are no longer able to send TR-1 Forms via email. If an investor is not registered to use the portal, they should follow the instructions on this page: Register to submit a notification to the FCA.
Short selling disclosure: following the FCA’s first enforcement action, in October 2020, for the failure to disclose in a timely manner net short positions in a listed issuer, the FCA has used PMB No.33 to remind investors of the importance of net short position disclosures.
Disclosure of payments to governments by issuers in the extractive industries – following a review in 2020, the FCA has identified a number of points including:
The FCA have highlighted that unless market practice improves they will look at stronger interventions, including enforcement investigations.
Auditors from EEA States
If you are a third country (including EEA) issuer with transferable securities admitted to trading on a UK regulated market and your auditors are from an EEA State, they will have to register as 'third country auditors' with the FRC (further information) in time for the publication of annual financial statements for financial years beginning on or after 1 January 2021.
Primary Market Bulletin No.33