Corporate Update Bulletin - 24 April 2025

Welcome to the latest edition of Corporate Update, our fortnightly bulletin offering a five-minute read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.

In this issue:

• News
• Legislation
• Case Law
• Publications

News

'Stop-the-Clock' Directive adopted and published in Official Journal

On 14 April 2025, the EU Council adopted Directive (EU) 2025/794 (also known as the ‘Stop-the-Clock’ Directive) - earlier than previous suggestions of early May - following its formal adoption by the European Parliament at first reading on 3 April 2025. The Directive was published in the Official Journal on 16 April 2025 and came into force on 17 April 2025. Member States must transpose it into national legislation by 31 December 2025.

Introduced as part of the European Commission’s ‘Omnibus I’ package (aimed at simplifying EU sustainability legislation), the Directive sets out a two-year postponement to sustainability reporting requirements under the Corporate Sustainability Reporting Directive (EU) 2022/2464 (CSRD) for companies that are required to comply from financial year 2025 or 2026. It also postpones the transposition deadline for the Corporate Sustainability Due Diligence Directive (EU) 2024/1760 (CSDDD) to 26 July 2027, as well as the first phase of its application to in-scope companies (including non-EU companies) by one year to 26 July 2028.

Government publishes final Cyber Governance Code of Practice

The Department for Science, Innovation and Technology (DSIT) has published its Cyber Governance Code of Practice, alongside supporting materials. The Code is aimed at boards and directors of medium and large public and private organisations and outlines the actions leadership should take to manage cyber risks and reduce the impact of attacks.

While tailored for larger organisations, small businesses are also encouraged to adopt the Code’s principles, with further guidance available from the National Cyber Security Centre (NSCC) website. The Code complements the Cyber Essentials scheme, and together these set out the government’s recommended minimum standard for cyber risk management. While the Code is currently voluntary, DSIT has suggested it may consider legislative action if uptake is limited or there are insufficient improvements in cyber governance.

London Stock Exchange launches discussion on the future of AIM

On 7 April 2025, the London Stock Exchange announced the publication of Discussion Paper: Shaping the Future of AIM, which seeks feedback on proposed changes to the AIM Rules for Companies. The paper is part of the broader effort to support the continued development of AIM in the context of UK capital markets reform and global market trends. Among other things, the discussion paper invites views on:

• AIM’s role within the broader UK capital markets ecosystems, with questions around current measures to encourage investment in equities, such as recent government initiatives and fiscal incentives available to investors in qualifying AIM companies, including business property relief and an exemption from stamp duty;
• streamlining the role of nominated advisers (nomads) to reduce costs and avoid duplication with work carried out by other professional advisers; and
• whether adopting a corporate governance code could be substituted with a simplified list of governance requirements set out by AIM.

The paper also explores more comprehensive reforms of the AIM Rules, aimed at removing unnecessary burdens and reducing costs while maintaining investor confidence, including proposals to: (i) raise the threshold for a substantial transaction from 10% to 25%; (ii) introduce new exemptions from existing disclosure requirements for related party transactions; and (iii) recognise a broader range of local accounting standards than currently permitted.

IoD establishes Commission to explore the evolving role of NEDs

On 10 April 2025, the Institute of Directors (IoD) launched a Commission, chaired by Baroness Evans, to examine the role of non-execute directors (NEDs) in the UK. This follows the publication of the IoD’s voluntary code of conduct for directors in October 2024. The Commission will assess whether NEDs are truly adding value to boards and governance and will make recommendations to boards and policymakers on improving NEDs effectiveness. It will run until July 2025, with findings due in the Autumn.

FCA publishes statement on intended approach to regulatory framework for PISCES

On 10 April 2025, the Financial Conduct Authority (FCA) published a statement setting out its intended approach to finalising the regulatory framework for the Private Intermitted Securities and Capital Exchange System (PISCES), the new regulated platform designed to support the intermittent secondary trading of shares in private companies. The statement outlines the FCA’s anticipated response to feedback received on its Consultation Paper 24/29 (CP 24/29), which proposed the initial framework for the PISCES sandbox. While the FCA have not made any material framework revisions, it has put forward ‘technical’ changes to better align PISCES with private market norms. These include amendments to the proposed set of core disclosure requirements, legitimate omissions, permissioned trading events and operator oversight. Notably, the final rules are not expected to include obligations to disclose post-trade transactions by directors and major shareholders.

The FCA intends to publish the final policy statement and regulatory rules for PISCES in June 2025, with applications for operators opening shortly after. Legislation to formally establish PISCES as a ‘financial markets infrastructure’ is expected to be presented to Parliament by May 2025.

Financial Services Regulatory Initiatives Forum publishes updated Regulatory Initiatives Grid

On 14 April 2025, the Financial Services Regulatory Initiatives Forum released the eight edition of its Regulatory Initiatives Grid, reflecting the key changes in priorities following the new government’s formation. The Grid is published twice a year to assist the financial services and wider corporate sector manage regulatory change by outlining proposed reforms to regulation in the coming two years. This is the first full update since November 2023 following the postponement of the May 2024 edition as a result of the general election.

This edition confirms that the FCA (i) is aiming to publish final rules and policy statements in relation to the new public offers and admissions to trading regime in summer 2025, to take effect in early 2026; and (ii) will publish its final rules relating to the PISCES sandbox once the relevant statutory framework is in force. Other notable updates include:

• ISSB Standards: Following the publication of the ISSB disclosure standards in 2023 and the government's expected consultation in H1 2025, the FCA is aiming to consult on (a) new disclosure requirements for UK-listed companies, and (b) enhancing its expectations for listed issuers’ transition plan disclosures, in the third quarter of 2025.
• T+1 settlement cycle: The UK will move to a T+1 settlement cycle by 11 October 2027, and a new entry has been added to the Grid to reflect this.
• Non-financial misconduct: The next steps are to be announced by June 2025 following the FCA’s 2023 consultation on non-financial misconduct.

Insolvency Service publishes new guidance on director disqualification sanctions

On 8 April 2025, the Insolvency Service published guidance relating to director disqualification sanctions, which prohibit individuals designated under the UK sanctions regime from acting as, or being involved in the management, promotion or formation of, a company. The guidance explains the scope of these sanctions - a breach of which is an offence under section 11A of the Company Directors Disqualification Act 1986 – and sets out the process for applying for a license to act as a director for persons subject to these sanctions.

Companies House publishes further guidance on identity verification

On 8 April 2025, Companies House published (i) Guidance: Verify your identity for Companies House, and (ii) Guidance: Tell Companies House you have verified someone's identity, to assist individuals in verifying their identity with Companies House and Authorised Corporate Service Providers (ACSPs) in informing Companies House when they have verified an individual’s identity. These reflect the fact that from 8 April 2025, individuals can verify their identity directly with Companies House or through an ACSP.

FCA publishes Primary Market Bulletin 55

On 17 April 2025, the FCA published Primary Market Bulleting 55 (PMB 55), its newsletter for primary market participants. In this edition, the FCA is consulting on making consequential changes to five remaining Technical Notes which still refer to the pre July-2024 Listing Rules, which it aims to finalise by July 2025.

Except in relation to Technical Note 710 (Sponsor Services: Principles for Sponsors), the FCA has also finalised the Technical and Procedural Notes which were consulted on in PMB 53, amending 44 Technical and Procedural Notes and deleting one Technical Note and one Procedural Note. In relation to amendments to TN 710 which were initially consulted on in PMB 48, the FCA proposed further changes in PMB 53 following feedback and are still considering the changes following further feedback. The FCA is also proposing to update Technical Note 507.1: ‘Structured digital reporting for annual financial statements prepared in accordance with International Financial Reporting Standards’ to reflect the fact that a new European Single Electronic Format taxonomy has been published.

Legislation

Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025 laid

On 3 April 2025, the Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 were laid before Parliament, along with an explanatory memorandum. The regulations (i) repeal most of the disclosures added to the directors' remuneration reporting regime in 2019 as part of the implementation of EU SRD II (the Shareholder Rights Amending Directive); and (ii) introduce changes to the audit regulatory framework with effect from 11 May 2025. These reforms are part of the government's broader effort to streamline non-financial reporting. The regulations are largely unchanged from the draft regulations published in March.  

The Department of Business and Trade has also published a guidance note to the regulations to provide additional clarification on when the changes will apply in respect of directors’ remuneration reports, policies and payments, and also to clarify how one of the changes impacts on future reporting comparing boardroom and employee pay. The guidance provides that changes to directors’ remuneration reports will apply to the first remuneration report published for a financial year beginning on or after 11 May 2025 while changes to directors’ remuneration policies will apply to any new policies approved by shareholders on or after 11 May 2025. Policies approved before that date will continue in force until the company receives shareholder approval for a new policy. Any policy prepared in accordance with the pre-11 May 2025 requirements that is not due to be approved until after that date, should be amended to fit with the new regulations before the shareholder vote.

Case Law

Syspal Capital Ltd v Truman [2025] EWCA Civ 469

Court of Appeal considers proper interpretation of articles determining when leaver provisions are triggered

In this case, the Court of Appeal considered the interpretation of leaver provisions in a company’s articles of association, specifically the point at which a transfer notice is deemed to be served when a shareholder ceases to be employed. The articles included a provision which provided that the shareholder was deemed to have served a transfer notice when the shareholder ceased to be employed as an employee, director or consultant and “[did] not continue in that capacity” in any other group company. The respondent shareholder had first been dismissed and ceased to be employed as an employee (in October 2022) and only resigned as director later (in May 2023). The dispute centred on whether the phrase “does not continue in that capacity” in that article referred to the shareholder ceasing to be employed in any role (i.e either as employee, director or consultant) or only when the shareholder ceased all roles within the group. The timing of the notice was critical because it determined whether the shareholder’s shares would be valued at market value (if triggered by his earlier dismissal as employee) or at fair value (if triggered by his later resignation as director of a group company).

The appellant (Syspal Capital) argued that the transfer notice was triggered upon ceasing any single role of employment, but the Court of Appeal upheld the first instance decision and confirmed that, on proper construction of the article, the transfer notice was only triggered once a shareholder ceased all roles within the group. In the Court’s view, this interpretation made greater commercial sense, aligning with the article’s purpose of giving an employed member a clean break from the company’s day-to-day operations. The narrower interpretation had the potential to force the shareholder to sell at a lower, market, price while still remaining involved in the business. 

Publications

PISCES - a new liquidity mechanism for private companies

Slaughter and May has published a briefing about the new PISCES regime under which it will be possible to trade existing shares in private companies on an intermittent basis. The briefing summarises the key features and benefits of the PISCES regime, particularly from the perspective of private companies and their existing shareholders, based on the draft regulatory framework published by the FCA in December 2024 and how platforms are expected to operate in practice.

ESG developments in 2025 - Q2 update

Slaughter and May has refreshed its Timeline of ESG Developments in 2025 for the with new key dates in the second quarter of 2025 to look out for, and updates to timings, to support with horizon scanning efforts.