PLC QTRLY - Q1 2025

This is our regular quarterly update to help our listed company clients and other market participants keep up to date with key developments relevant to issuers on the Main Market and AIM market of the London Stock Exchange.

New regulations streamline directors' remuneration reporting

On 31 March 2025, the Companies (Directors' Remuneration and Audit)(Amendment) Regulations 2025 were made and were subsequently laid before Parliament together with an explanatory memorandum.

The regulations repeal most of the directors’ remuneration reporting requirements for quoted companies which were added in 2019 to implement EU law, on the basis that they duplicate or overlap with pre-existing and continuing UK reporting requirements.

The changes include:

• Removing the requirements to disclose in the directors' remuneration report or directors' remuneration policy:
  
  
  • A comparison of each director's annual pay change with the average employee pay change.
    
    
  • Each director's total fixed pay and total variable pay.
    
    
  • Any changes to exercise price or date for any share options awarded to directors.
    
    
  • Any vesting or holding periods for share-based awards.
    
    
  • Any deferral periods related to the award of directors' performance pay.
    
    
  • The duration of directors' service contracts.
    
    
  • Information about the remuneration policy decision-making process.
    
    
• Removing the requirement for the remuneration report to be available on the company website for ten years.
  
  
• Reverting to allowing payments to directors that do not comply with the remuneration policy to be approved by shareholder resolution, rather than requiring a shareholder vote to amend the remuneration policy.
  
  
• Removing unquoted traded companies from the directors’ remuneration reporting requirements.

FCA publishes warnings and guidance about leaks on M&A transactions

On 14 March 2025, the FCA published Primary Market Bulletin 54, addressing strategic leaks and unlawful disclosures on M&A transactions.

The bulletin notes that the FCA has seen an increase in instances where material information on live M&A transactions appears to have been deliberately leaked to the press (for example, details of discussions between the board of an offeree company and a potential offeror following an approach for a possible offer, or where the offeree board has rejected an approach but an increased offer is likely). In many cases, the information leaked constituted inside information under the UK Market Abuse Regulation (MAR) and resulted in a significant effect on the share price of the offeree company and/or the offeror.

The FCA is also concerned about leaks which occur inadvertently, by hinting at market sensitive information (even if specific details are not mentioned), noting that both inadvertent and strategic leaks can cause significant movement in share prices and trigger the improper dissemination of information, damaging the smooth operation and integrity of markets.

The bulletin reminds issuers and advisers that MAR expressly prohibits the unlawful disclosure of inside information and that, if breaches occur, the FCA can impose unlimited fines, order injunctions, or prohibit regulated firms or approved persons.

The FCA advises firms to take precautions when dealing with inside information and to adopt a strong stance to combat any form of unlawful disclosure, noting that written policies and procedures for identifying and handling inside information can have limited effectiveness if they are not accompanied by culture and practices which actively discourage leaks.

UK prospectus regime and Listing Rules: FCA consultation on further changes

On 31 January 2025, the FCA published a consultation paper on further changes to the public offers and admissions to trading regime and the UK Listing Rules. This consultation was a follow up to the publication of the Public Offers and Admission to Trading Regulations 2024 in January 2024, which provide a new framework to replace the UK Prospectus Regulation and give the FCA greater discretion to set rules on prospectus requirements (see PLC QTRLY Q1 2024), and the FCA's July 2024 consultation on proposed new Prospectus Rules (as reported in PLC QTRLY Q3 2024).

The proposed changes largely relate to non-equity securities. The most significant proposed change relating to equity securities is the removal of the requirement to submit an application to list further shares of the same class. Under this proposal, issuers will be able to make a single application to list all securities of a class (including both existing securities and future issuances) and future issuances of the same class will be treated as automatically listed once issued. However, issuers will still need to apply to the relevant exchange for their listed securities to be admitted to trading.

The FCA has also published a separate consultation paper on further proposals for firms operating public offer platforms, setting out its proposed approach to authorising and regulating such firms.

The consultations closed on 14 March 2025 and the FCA expects to publish its final rules in summer 2025.

Board and leadership diversity updates

Fourth FTSE Women Leaders review

On 25 February 2025, FTSE Women Leaders published the fourth FTSE Women Leaders Review, highlighting continued progress during the year towards achieving greater gender balance on the boards and leadership teams of FTSE 350 companies and 50 of the UK's largest private companies.

Key findings for FTSE 350 companies included:

• 43.3% of board positions were held by women (up from 42.1% in 2023). 81% of FTSE 100 companies and 70% of the FTSE 250 met or exceeded the 40% target for women on boards, with less than a year to go until the December 2025 deadline.
  
  
• The percentage of women in senior leadership positions (a company's executive committee and its direct reports) was 36.6% for the FTSE 100 (up from 35.2% in 2023) and 34.2% for the FTSE 250 (up from 33.9% in 2023). 29% of FTSE 100 companies and 28% of the FTSE 250 met or exceeded the 40% target for women in leadership roles.
  
  
• The number of women chairs increased to 60 (up from 53 in 2023), the number of women senior independent directors increased to 192 (up from 162 in 2023) and the number of women finance directors increased to 57 (up from 48 in 2023). However, the number of women CEOs reduced by one to 19.

Parker Review 2025 update report

On 11 March 2025, the Parker Review published its update report on improving the ethnic diversity of UK business.

The report sets out findings from its latest voluntary census on the ethnic diversity of the boards and senior management of FTSE 350 and large UK private companies as at 31 December 2024, including the following:

• 95% of FTSE 100 companies had ethnic minority representation on their boards (down from 96% in 2023). 82% of FTSE 250 companies met the target to have ethnic minority representation on their board by December 2024 (up from 70% in 2023).
  
  
• Ethnic minority directors represented 19% of all FTSE 100 directors and 15% of all FTSE 250 directors.
  
  
• On average, 11% of FTSE 100 senior management positions and 9% of FTSE 250 senior management positions were held by people with ethnic minority backgrounds.

FTSE Russell announces changes to FTSE UK Index Series methodology

FTSE Russell has announced two changes to the FTSE UK Index Series methodology which will take effect from the September 2025 index review:

• Securities which trade in non-GBP currencies (such as Euros or US dollars) will be considered for potential inclusion in the FTSE UK Index Series, if otherwise eligible. However, inclusion will still require a UK nationality and a listing in the equity shares (commercial companies) or closed-ended investment fund categories. FTSE Russell notes that there are no companies immediately eligible for inclusion in September as a result of this change but that the change may have a longer term impact on the composition of its indices.
  
  
• The fast entry thresholds will be lowered to allow companies which rank 225th or above and have an investable market capitalisation of £1 billion to be included within the FTSE 100 or FTSE 250, as appropriate, after the close on their fifth day of trading following an IPO.

T+1 settlement implementation plan and government response published

On 6 February 2025, the Accelerated Settlement Technical Group published its UK implementation plan for the first day of trading for T+1 settlement, recommending that the first day of UK cash securities trading for settlement on a T+1 cycle should be 11 October 2027. This date aligns with the timing proposed by ESMA for the EU moving from T+2 to T+1 settlement.

The implementation plan also includes a T+1 Code of Conduct containing the scope of T+1 (the categories of instruments and transactions to be covered and any exemptions), a timetable of recommended actions to enhance market practices and a set of expected behaviours necessary for UK market participants to meet their T+1 legislative obligations.

On 19 February 2025, the government published its response to the implementation plan, accepting all recommendations and confirming that it will legislate for a move to T+1 settlement in the UK from 11 October 2027. Firms should therefore prepare for this date to be the first day of trading under a T+1 standard.

The FCA has published an explanation of the impact of the planned move to T+1 settlement.