UK Law and Practice Contributed by: Gareth Sykes, James Palmer, Isobel Hoyle and Hannah Whitney, Herbert Smith Freehills Kramer
the Transparency Rules derive from the EU Transparency Directives in force when the UK was an EU member state. • The UK version of the EU Market Abuse Regulation (UK MAR), which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. UK MAR sets out requirements relating to the disclosure of inside information by listed companies and governs the related offences of insider dealing and unlawful dis - closure of inside information. It also restricts when directors may deal in the company’s securities and requires directors (and persons closely associated with them) to disclose their share dealings to the relevant company. As noted in 1.2 Sources of Corporate Govern- ance Requirements , the Financial Services and Markets Act 2023 will, when the relevant sections are brought into force, revoke UK MAR, making way for the FCA to set the rules on the definition and disclosure of inside information. It should be noted though that it is not anticipated that significant changes will be made to the existing regime. • The AIM Rules, which are published by the London Stock Exchange (LSE), apply to companies with shares admitted to trading on AIM (the market for smaller growing compa - nies in the UK). Additional corporate govern - ance requirements were introduced into the AIM Rules in 2018, requiring AIM companies to state on their website which recognised corporate governance code they apply and to report, on “comply-or-explain” basis, against that code. In 2025, the LSE launched a review of AIM which proposes that the AIM Rules should instead set out a simplified list of gov - ernance requirements. A number of institutional investor bodies, includ - ing The Investment Association and the Pen - sions and Lifetime Savings Association, produce
their own corporate governance guidelines that listed companies need to be aware of, and The Chartered Governance Institute UK & Ireland also regularly publishes guidance notes on cor - porate governance issues. 2. Corporate Governance Context 2.1 Hot Topics in Corporate Governance The impact companies have on the environment (and vice versa) continues to be one of the domi - nant topics in corporate governance in the UK (see 2.2 ESG Considerations ). Many UK companies are now required to make climate-related financial disclosures and follow - ing the adoption by the International Sustain - ability Standards Board (ISSB) of its first two sustainability disclosure standards (SDSs) in June 2023, the UK government is expected to endorse the ISSB SDSs in the first half of 2025 to create UK SDSs. In addition, the UK Transition Plan Taskforce (TPT) has published a comprehensive framework to help companies develop and report on their net zero transition plans. Remaining in the ESG sphere, there are also growing concerns among investors about “greenwashing” , which is becoming an increas - ing focus area for regulators. Diversity and inclusion at board and senior man - agement levels are also issues that the largest companies in the UK are being requested to focus on, in order to seek to improve how reflec - tive these bodies are of society at large (see 4.3 Board Composition Requirements/Recom- mendations ).
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