PLC QTRLY - Q2 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.

AIM: Consultation on the future of AIM and changes to AIM Rules

On 7 April 2025, the London Stock Exchange released a discussion paper seeking feedback on the future of AIM and proposed changes to boost growth and liquidity. The discussion paper sought views on both the overall market framework of AIM and possible changes and simplifications to the AIM Rules, including:

• Effectiveness of recent government initiatives to encourage investment in equities and consideration of other options to enhance growth and liquidity.
• Simplification of the AIM admission process, including potential changes or alternatives to the current admission documents.
• A new regime for working capital statements, potentially aligning with the new Main Market approach or removing the requirement for a working capital statement in certain circumstances.
• Dispensing with the requirement for an admission document:
  • When a reverse takeover does not fundamentally change the business.
  • For second lines of securities.
• Recognition of a wider set of local accounting standards.
• Reducing requirements for the AIM Designated Market route.
• Allowing admission of companies with dual class share structures.
• Updates to class tests, including increasing the threshold for a substantial transaction from 10% to 25%.
• Simplified corporate governance requirements and alternatives to adopting a recognised corporate governance code.

The consultation closed on 16 June 2025.

PISCES: Regulations made and final rules published

The Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 (the PISCES Regulations) were published and laid before Parliament on 15 May 2025 and came into force on 5 June 2025. They establish the PISCES sandbox, a new temporary framework for potential PISCES operators to apply to operate intermittent trading events for participating unquoted companies and investors. The new system will allow private companies to trade their existing shares in a controlled environment during intermittent trading windows.

The London Stock Exchange has announced that it will apply to operate in the PISCES sandbox, launching a new market to be known as the Private Securities Market later in 2025.

The Private Intermittent Securities and Capital Exchange System (Exemption from Stamp Duties) Regulations 2025, which exempt PISCES transactions from stamp duty and stamp duty reserve tax, were made on 10 June 2025 and came into force on 3 July 2025. 

Also on 10 June 2025, the FCA published a policy statement and its final rules for PISCES, made under the PISCES Regulations, following its previous consultation. These include the FCA's new PISCES Sourcebook.

See our blog post for further details on how PISCES will operate.

Directors' remuneration: New guidance

DBT guidance

On 23 April 2025, the Department for Business and Trade published a guidance note on the Companies (Directors' Remuneration and Audit)(Amendment) Regulations 2025 (the Remuneration Regulations) which came into effect on 11 May 2025 (see PLC QTRLY Q1 2025).

The guidance note provides clarification on when the changes outlined in the Remuneration Regulations will apply in respect of directors’ remuneration reports, policies and payments:

• Directors' remuneration report: Changes will apply to the first remuneration report that a company publishes for a financial year which begins on or after 11 May 2025. For remuneration reports relating to a financial year that began before 11 May 2025, the previous reporting requirements will apply.
• Directors' remuneration policy: Changes will apply to any new policies approved by shareholders on or after 11 May 2025. Any remuneration policies approved before 11 May 2025 will continue in force after 11 May 2025 until the company receives shareholder approval for a new policy.
• Payments to directors: From 11 May 2025, any proposed payments to directors that fall outside the existing remuneration policy will require shareholder approval of the specific proposed payment but will no longer require the policy itself to be first revised and approved as consistent with the payment.

GC100 and Investor Group guidance

The GC100 and Investor Group have published an updated version of their Directors' Remuneration Reporting Guidance to reflect changes introduced by the Remuneration Regulations and evolving best practice.

The guidance is designed to help companies satisfy their reporting requirements under applicable legislation and to promote effective engagement between investors and companies.

Key changes since the last update in 2019 includes new guidance on:

• Engagement with shareholders and consideration of shareholders’ views.
• Environmental, social and governance (ESG) measures in variable pay.
• Consideration of general workforce pay.
• Potential windfall gains.

The updates also clarify the overlapping requirements in the UK Corporate Governance Code on significant votes against any resolution, employee consultations and workforce pay and conditions.

FRC publishes annual review of structured digital reporting

On 28 April 2025, the FRC published its annual review of structured digital reporting. The review is based on a market wide analysis of digital reporting and detailed assessment of 25 annual reports filed to the FCA's National Storage Mechanism during 2024.

The review notes that a number of basic errors and issues observed in earlier years have been resolved but that key issues remaining include:

• Custom tags/extensions being created when not necessary.
• Extensions not being anchored correctly.
• The accounting meaning of tags not corresponding to the facts reported or not reflecting the correct standard.
• Amounts being reported with the incorrect sign (ie positive or negative) or scale (eg pounds or pence).
• Failure to include certain mandatory tags or to apply the relevant level of granularity when tagging.
• Issues with design and usability of digital reports.

Corporate governance: UK Stewardship Code 2026

On 3 June 2025, the FRC published an updated version of its UK Stewardship Code, which will take effect from 1 January 2026.

The Code sets out core principles of effective stewardship for asset owners and asset managers, and for the service providers that support them. It takes a flexible principles-based approach, focussed on creating value for clients and beneficiaries.

Key features of the revised Code include:

• Enhanced definition of stewardship: Stewardship is now defined as the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries.
• Reduced reporting burden: The number of principles has been reduced and detailed reporting expectations have been replaced by shorter 'how to report' sections, aiming to reduce box-ticking approaches to reporting.
• Flexible reporting structure: Signatories can submit their Policy and Context Disclosures and Activities and Outcomes Reports separately or together in one document. The Policy and Context Disclosure will only need to be submitted once every four years, or when there have been changes at the organisation such that the Policy and Context Disclosure no longer aligns with the Activities and Outcomes Report.
• Differentiated principles: The Code now includes separate principles for asset owners, asset managers and different categories of service providers.
• New guidance: The FRC has published optional guidance to assist organisations with their reporting.

Government consults on modernising the UK’s sustainable finance framework

On 25 June 2025, the government published three consultations on modernising the UK's sustainable finance framework, seeking views on:

• The government's draft UK Sustainability Reporting Standards (UK SRS), based on the ISSB Standards (see PLC QTRLY Q2 2023).
• The government's transition plan manifesto commitment.
• Oversight of sustainability assurance providers.

All three consultations close on 17 September 2025.

Consultation on UK SRS

The first consultation seeks views on two new UK SRS, UK SRS S1 and UK SRS S2, which are based on IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures). The government proposes six minor amendments to the ISSB Standards for application in a UK context.

Once endorsed, the UK SRS will be available for voluntary use in the UK.

In addition, the government intends to consult on amending the existing climate-related financial disclosure requirements in the Companies Act 2006 to mandate climate-related disclosures under UK SRS S2 and the FCA intends to consult on replacing the current requirement in the UK Listing Rules requiring companies to report against the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) with a new requirement to report under UK SRS (which effectively supersedes and builds on the TCFD’s recommended disclosures).

Consultation on transition plan reporting

The government's manifesto included a commitment to mandate UK-regulated financial institutions and FTSE 100 companies to develop and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement.

The second consultation seeks views on possible options for implementing that commitment, including:

• Requiring in-scope entities that have not disclosed a transition plan or transition plan-related information to explain why.
• Requiring in-scope entities to develop and disclose transition plans.

The new draft UK SRS S2 does not require organisations to implement a transition plan but provides a framework for organisations that have a transition plan to report on it.

Consultation on oversight of sustainability assurance providers

The third consultation seeks views on the government's proposal for greater regulatory oversight of third-party assurance services for sustainability-related financial disclosures.

This includes a proposal for the planned Audit, Reporting and Governance Authority (ARGA) to be given responsibility for creating a voluntary registration regime for entities that offer third-party assurance services for sustainability-related disclosures. The proposed regime aims to drive trust in the UK sustainability assurance market and support companies to easily identify appropriately qualified sustainability assurance providers.

Further updates to FCA Knowledge Base

On 17 April 2025, the FCA published Primary Market Bulletin 55, which finalised 44 technical and procedural notes for inclusion in its Knowledge Base, deleted one technical and one procedural note and consulted on amendments to four other technical notes, all to reflect the new UK Listing Rules which came into effect in July 2024.

The Bulletin also consulted on proposed updates and clarifications to the FCA's technical note on structured digital reporting for annual financial statements prepared in accordance with International Financial Reporting Standards (including to refer to the new European Single Electronic Format  taxonomy) and confirmed that, following feedback, the FCA has decided not to proceed with changes to its technical note 'Sponsor services: principles for sponsors'.

If you would like to discuss any of these issues or any other public company matters, please contact Connor Cahalane, James Channo or Karen Hendy.