Questions and answers relating to delaying annual company accounts during the coronavirus crisis.
Does the extension of the deadline for publishing Annual Financial Reports (temporary relief) apply to all listed companies?
This temporary relief applies to all listed companies that are required to comply with DTR 4.1 but we note that some companies may also be subject to transparency rules in other jurisdictions.
How does this apply to issuers with a Home State under the Transparency Directive that is not the UK?
The FCA cannot extend this temporary relief to these issuers.
It is the responsibility of issuers to comply with other legislation to which they are subject in their own jurisdiction or elsewhere.
Does this affect companies that are admitted to unlisted markets in the UK such as AIM or NEX Growth?
This temporary relief is only relevant to companies’ subject to DTR 4.1. This does not include those with securities admitted only to markets that are not regulated markets under MiFID – such as AIM or NEX Growth.
Does the extension apply to listed companies that are not already required to comply with the transparency rules (or with corresponding requirements imposed by another EEA Member State)?
For the avoidance of doubt, the FCA will also give temporary relief from taking action against companies that are subject to the requirement to publish Annual Financial Reports via other Listing Rules (LR 9.2.6BR, LR 14.3.23R, LR 18.4.2R and 18.4.3R).
Does the extension apply to companies that only have listed debt securities?
This will depend on whether the securities are admitted to trading on a regulated market:
- If the debt securities are admitted to trading on a regulated market the temporary relief applies.
- If the debt securities are not admitted to trading on a regulated market, the companies are not subject to DTR 4.1. They are subject to LR 17.3.4R which requires the issuer to approve and publish its annual report and accounts within 6 months of the end of the financial period to which they relate. Therefore, the issuer’s existing requirements already permit a 6 month period for publication.
How are these measures being achieved?
This is not a waiver or rule change. The FCA is able to exercise forbearance in circumstances where it deems this appropriate. The FCA deems the COVID-19 pandemic and the ensuing challenges facing listed companies and their auditors as sufficient grounds to exercise the forbearance necessary to achieve the desired outcome.
Under what circumstances does the FCA suspend listing of securities?
The FCA is able to impose a unilateral suspension of the listing of any securities if the smooth operation of the market is, or may be, temporarily jeopardised or it is necessary to protect investors (section 77 FSMA and LR 5.1.1R).
The Listing Rules include examples of when the FCA may suspend listing of securities and this includes situations where an issuer has failed to publish financial information within the appropriate timescale.
Do listed companies still have to produce Preliminary Statements of Accounts?
Preliminary Statements of Accounts (or prelims) are permitted by Listing Rules but are not required by these rules as they stem from established market practice rather than the regulation. In the event that premium listed companies wish to continue to produce prelims then the applicable rules will still apply (LR 9.7A.1). However, we would strongly urge all listed companies to consider whether timetables and practices for financial reporting that were set prior to the COVID-19 pandemic continue to be appropriate in the current circumstances.
Does this cover half yearly financial reports (interims)?
This temporary relief does not currently extend to half yearly financial reports (interims) which should be published within 3 months of the half year end in accordance with DTR 4.2.
However, as we say in our Statement of Policy, we strongly recommend that listed companies review all elements of their timetables for publication of financial information in order to make appropriate use of the time available within regulatory deadlines to ensure accurate and carefully prepared disclosures. We urge market participants not to draw undue adverse inferences when companies make use of the full time they have available under the regulation.