On 28 July 2022, the FCA Listing Authority Advisory Panel (the Panel) published their Annual Report for the period 1 April 2021 – 31 March 2022. The Panel meets formally four times each year and holds four scheduled informal sessions. Over the past year members have also been involved in several ad hoc sub-groups to discuss, in more depth, the impact of the war in Ukraine on markets, the Primary Markets Effectiveness Review, the UK Secondary Capital Raising Review and ESG related proposals.

The Report outlines the following main areas of focus and activity in the past year:

  • Primary Markets Effectiveness Review – The Panel acknowledged that the implementation and marketing of the FCA’s reforms would be critical to maintaining and enhancing the UK’s competitive advantage. The Panel looks forward to continuing to engage in detail with the FCA on this important topic, as it develops its regulatory approach through phase 2 of the Review.
  • Future Regulatory Framework – The Panel welcomed the proposed addition of a ‘secondary’ competitiveness objective for the FCA. Furthermore, the Panel also supported the proposal for Parliament to delegate the detail of policy making to the regulators and recognised the FRF Review’s aim to streamline the regulatory process.
  • ESG – The Panel were encouraged by the FCA’s leadership in promoting the international harmonisation and standardisation of green taxonomies for issuers that were aligned to the Task Force on Climate-related Financial Disclosures (TCFD) requirements. Furthermore, the Panel supported bringing ESG data and rating providers inside the FCA’s regulatory perimeter.
  • Audit market reforms – The Panel, in a direct letter to Department for Business, Energy and Industrial Strategy, No 10 and HM Treasury, expressed significant concerns that the well-meaning, yet disproportionate, costly and outsized proposals could materially increase the risk of making the UK less attractive and competitive as a global capital market. Nevertheless, the Panel continued to be encouraged by the close coordination between the FCA and FRC to mitigate and manage the risks arising from regulatory overlap in responsibilities between the FCA and the proposed new statutory body (the Audit, Reporting and Governance Authority or ARGA).
  • UK Secondary Capital Raising Review – the Panel discussed the need to implement forward-thinking changes without compromising quality to help further enhance the attractiveness and competitiveness of the UK’s offering as a listing venue and international financial centre.
  • FCA’s strategic initiatives and its engagement with the market – A recurring theme in the Panel’s discussions on the FCA’s strategic approach has been to consider the potentially adverse impact on the UK’s capital markets – both in absolute terms and in terms of perception – of additional costs and burden of new regulations for both issuers and investors.