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Corporate Update is our fortnightly bulletin highlighting the latest legal and regulatory developments which we consider to be of relevance to in-house corporate counsel. If you would like to subscribe to this bulletin as a regular email, please click here.
In this issue
News
Companies House publishes updated rules on electronic filing
On 21 January 2022, Companies House published new rules governing electronic filing which replace the Registrar's (Electronic Form) Rules 2012. These rules apply to any document delivered to the Registrar in electronic form on or after 21 January 2022. The new rules set out the requirements for using Companies House’s various filing facilities including its online platform Companies House Service (CHS) and the WebFiling, software filing and shared filing services. The rules specify the electronic format to be used for each document, as well as authentication and delivery requirements.
Interim report on use of electronic execution of documents
The Industry Working Group on Electronic Execution of Documents (IWG), comprising a multi-disciplinary group of business, legal and technical experts, has published an interim report which analyses the current use of electronic execution of documents in England and Wales, sets out best practice guidance and makes recommendations for future analysis and reform. Cross-border issues are not dealt with in the Interim Report but will be addressed in the final report, expected later in 2022.
FCA publishes consultation on guidance on approach to compromises for regulated firms
The Financial Conduct Authority (FCA) has published for consultation guidance on its approach to compromises (schemes of arrangement, restructuring plans and voluntary arrangements) which are used by regulated firms to settle their liabilities with creditors and/or shareholders. The guidance seeks to clarify the FCA’s general approach to compromises, including the factors it will consider when deciding if and what actions it will take in line with its statutory objectives to protect consumers and markets. This consultation comes amid an increasing number of firms developing proposals using compromises to deal with significant liabilities to consumers. The consultation is open until 1 March 2022.
FRC publishes research on audit quality
The Financial Reporting Council (FRC) has published a paper setting out the findings from a YouGov research project that analyses the views of Audit Committee Chairs of Public Interest Entities (listed companies, credit institutions and insurers) (ACCs) on the key drivers of audit quality, based on 50 interviews of ACCs. A key finding from the research was the disparity of views and approaches amongst ACCs in relation to audit quality and the difficulty among ACCs in differentiating audit quality from the quality of service provided by the auditor. The FRC suggests that the research findings lend support to the sweeping audit reforms as proposed in the government's March 2021 White Paper on restoring trust in audit and corporate governance.
Market Insights
QCA publishes investor sentiment survey
The Quoted Companies Alliance (QCA) has published its latest Mid and Small-Cap Survey report. The report indicates an emerging disparity between how investors and companies view public markets. While investors see current market conditions as appealing for small and mid-caps, companies are reported to disagree. The report highlights a difference between how small and mid-caps should be defined in terms of market capitalisation, with companies generally skewing towards lower amounts when compared to investors. There was also a difference in views when asked about the minimum market capitalisation before a company should consider listing on the London Stock Exchange’s Main Market, with most investors suggesting £100 million, while companies suggested £500 million.