Governance Readout

Following the introduction of identity verification (IDV) within the Economic Crime & Corporate Transparency Act 2023, Companies House has published guidance relating to several associated matters. The guidance has been published off the back of the three sets of rules which Companies House released in early February which covered acceptable forms of evidence, and application processes using different routes to complete the IDV.

All new and existing company directors, persons of significant control (PSCs) and those filing information with Companies House will be required to have their identifies verified. There are a few routes that an identity can be verified whether its directly with Companies House, using the Gov.UK One login, at the Post Office or via an authorised corporate service provider (ACSP).

The guidance published by Companies House is aimed at ACSPs and includes information on how to meet Companies House’s IDV standard.

Where an ACSP is verifying an individual’s identity, they will have to:

• Ask for that person’s information (full name, date of birth and address)
• Be provided with documents to verify their identity
• Validate the authenticity of the documents either by using IDV technology or manually
• Confirm the identity belongs to the person claiming it

Other guidance published by Companies House covers how an organisation can register as an ACSP (where it plans to carry out IDV) and the role and responsibilities of an organisation being an ACSP.

Registration to be an ACSP should have been available from 25 February, however Companies House delayed this launch date and  has revised it to 18 March 2025. From 8 April individuals should be able to voluntarily verify their identities ahead of it becoming mandatory for all new directors/PSCs in the autumn of 2025. Existing directors and PSCs will have a 12-month transition period.

Computershare’s view

Many questions remain for organisations in relation to IDV, such as:

• How will individuals within an organisation be able to file for their subsidiaries if their identities aren’t verified for each subsidiary?
• How will Companies House connect directors who may have variations of their name used on different companies?
• How will Companies House handle instances where individuals have a professional name that doesn’t match their identity documents?

Clients are advised to undertake an assessment to determine how their company secretarial team file for group and subsidiary entities to ascertain how best to comply with the IDV requirements. Clients should consider the impact on their directors and PSCs, including briefing them on the requirements and start to build out a suite of documents to support the IDV of the directors and PSCs.

From 3 February, new rules have been introduced by the Takeover Panel which narrow the scope of companies that are within scope of the Takeover Code. These changes were originally consulted on during 2024 by the Panel.

The new rules state that:

• The Code will apply to those UK (Channel Islands and Isle of Man) incorporated companies which are – or have been in the last two years – admitted to a UK regulated market, a multi-lateral trading facility (i.e. AIM) or on a stock exchange in the Channel Islands or the Isle of Man.
• The Code won’t apply if a UK company was considered UK-quoted more than two years prior to the date of the offer, those companies who are or were previously traded solely on an overseas market, using a ‘matched bargain facility’, or any other unlisted/private company which has filed a prospectus during the 10 years previous.
• Upon delisting, a company will have to make an appropriate disclosure to inform investors that the Takeover Code will cease to apply after two years.
• Companies that cease to be within scope are subject to a transitional period of two years from the implementation date of the rules and this is to allow those companies to put in place alternative arrangement to protect shareholders such as adjusting their articles of association to permit investors to exit the investment.

The final set of implementation deliverables have been released by the UK’s Accelerated Settlement Taskforce’s Technical Group. The deliverables are the culmination of two years of analysis, discussion and design by more than 450 subject matter experts representing over 100 market participants and are now the blueprint on which the Government will pursue the introduction of a shorter settlement cycle into the UK.

T+1 settlement should occur on the 11 October 2027, however there is much still to be done as a market to be ready for it. This date is anticipated to align with the planned move to T+1 within Europe and will see both markets following the same change that occurred in places like Canada, Mexico and the United States in 2024. This move will see dematerialised assets being able to settle on the day after a trade has occurred, rather than two days as is the current case. Note that until such time as physical share certificates are removed from the UK market, holders of such certificates will still have to satisfy themselves with a T+10 settlement cycle.

The latest release has identified twelve critical actions that are divided into four business areas that must be implemented by all market participants ahead of the Oct 2027 implementation to ensure the transition to T+1:

• Scope
• Legislation will need to be updated; trading venues will need to amend their rulebooks, and all trading parties must comply with the T+1 obligation in respect of instruments and transaction types.
• Settlement
• All allocation and confirmation processing will need to be completed prior to any deadline and not later than 23:59 GMT on T+0 and using industry recognised electronic standards.
• All settlement instructions submitted to CREST (the UK’s Central Security Depository) to be completed as soon as practicable, prior to any deadline set and no later than 05:59 GMT on T+1.
• Polices and procedures for allocations, confirmations and settlement instructions will be put in place by market participants to ensure they meet required deadlines.
• Financial market infrastructures (FMIs)
• All FMI systems and processes to be reviewed, including those of their third parties and Swift, and any updates to be communicated to their users
• Static data
• All market participants are to implement the core principles and templates contained in the Financial Markets Standard Board’s relevant standards.
• Stock lending recalls to be automated and a market cut off times and return deadlines to be adhered to based on industry best practice.

The technical group has also identified 26 highly recommended actions across six business areas for compliance by all market participants and these include actions for corporate action processing, securities financing processing and foreign exchange processes. The group has recommended that corporate bonds move to a T+1 settlement cycle so that they align with the treatment of gilts in this respect.

Within the recommended actions for corporate actions, a review of dividend processing by all trading venues is to be conducted as such events occur – in accordance with the current procedure implemented by the London Stock Exchange – and a standardised process is adopted. Also of interest is the recommendation that use of Legal Entity Identifiers (LEI) be mandated and that upon the formation of a company an LEI should be issued and that should be made public on Companies House or other relevant government agency.

Computershare’s view

It’s an exciting time for the UK market with so much planned reform and moving to a T+1 environment will make sure the UK stays competitive. While the technical group recognise that the introduction of digitisation/dematerialisation of the UK’s 8-10m certificated shareholdings isn’t a requirement to have a quicker settlement cycle, they have called out that it would benefit the market. Therefore, in our view it’s imperative that the Government continue to drive forward in introducing a fully dematerialised securities market that is suitable for retail investors, such as ensuring they can retain choice and access to their rights. We’ve seen the benefits of such a market elsewhere in the world and we have expressed to the Digitisation Taskforce and the Government how such a change can be introduced in as little as 12 months.

Companies need to be mindful of the reduced settlement cycle for several reasons. Firstly, while not mandatory there will be a growing call/interest in companies ensuring that their dividend timetable more closely aligns with the recommendations of the London Stock Exchange, particularly with regard to a 10-day window for elective events. Market participants such as intermediaries may also start pushing harder for relevant elective events to utilise Electronic Election Entitlements (i.e. temporary ISINs used to elect on currency options) – something we’ve developed, used for certain issuers and events, and have been working with other registrars,Euroclear and the LSE to make simpler.

Secondly, with shorter settlement cycles, companies need to consider a T+1 settlement on the execution of buyback schemes, transfer of securities into and out of treasury positions, implications for share vestings and for the obligations to notify the market of share movements/transactions by persons discharging managerial responsibilities (PDMRs).

As our project team spins up over the next two years, which bring with them the learnings from implementing T+1 in Canada and the US, we’ll ensure we keep you informed regarding how the quicker settlement cycle will be impacting our services to companies, and what our industry experts are learning and hearing from the wider market.

The Financial Conduct Authority has published Policy Statement PS24/19 which provides a summary of its consultation issued in August 2024 on the National Storage Mechanism (NSM) and sets out their response. It has also included final rules and guidance that come into force on 3 November 2025.

The revised rules will impact issuers whose securities are admitted to trading on UK regulated markets and primary information providers (PIPs) that disseminate and file regulated information on the behalf of such issuers.

In general, the new rules will see the introduction of more comprehensive metadata requirements to help enhance the functionality of the NSM, therefore making it easier for users of the platform to find the regulated information. This will be done in part through expanding requirements for the use of a Legal Entity Identifiers (LEIs) and updating headline information.

The FCA is continuing to engage with PIPs and plans to provide them with a testing environment and at least three months to test the new arrangements ahead of the live date in November 2025.

Within Chapter 3 of the Policy Statement is more information on the metadata requirements for issuers and the regulator expects to provide more information in a future edition of the Primary Market Bulletin. Those issuers that are subject to DTR 6.2.2A will be required to notify the regulatory of their name and LEI, the same information for any person filing information on their behalf and the details of any related issuers that are party to the disclosures even if the related issuer is not conducting the filing.

Any LEI used must have the status of ‘issued’ meaning it is current and valid. However, it’s been made clear that where a PIP is filing on behalf of an issuer all they must do is ensure that the LEI is available in the Global LEI Index . The FCA will also be adopting its proposal which recognised that where funds frequently issue net asset value updates the requirement for an LEI should be optional.

Further to the UK Government’s drive to continue to reduce the burden on companies by streamlining non-financial reporting, it has published the draft Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025 (Regulations). The proposed amendments will see changes to the directors’ remuneration reporting requirements found within the Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and Report) Regulations 2008.

Together with the draft regulations, the explanatory notes provide clarity that the changes are being made to remove most of the disclosures that were part of the revised EU Shareholder Rights Directive implemented in 2019.

The disclosures being removed are:

• The comparison of each director’s annual pay change with the average pay change for employees over the same period
• Total fixed pay and total variable pay for each director from the single total figure table in the remuneration report
• Details of any changes to the exercise price or date of any share options awarded to directors
• Information in relation to the duration of directors’ service contracts
• Information in relation to the decision-making process for the determination, review and implementation of the remuneration report
• Where the company awards share-based remuneration, information on any vesting periods and holding periods

There is also a proposal to remove the requirement for directors’ remuneration reports to be kept available on the company’s website for 10 years and to exclude unquoted traded companies from the remuneration report and policy requirements.

Computershare’s view

It’s good to see further strides to simplify what so many recognise as significantly complex reporting elements. We’ll be tracking the progress of these regulations, and should anything change, you can be assured we’ll be reporting here in the Governance Readout.

The FRC has released updated guidance on the Going Concern Basis of Accounting and Related Reporting. This guidance is non-mandatory and is designed to serve as a proportionate and practical guide for directors of all companies within its scope. It aims to assist directors with the application of the applicable legal and regulatory requirements to:

1. Assess and make disclosures related to the going concern basis of accounting and any material uncertainties in their financial statements.
2. Disclose principal risks and uncertainties, which may include risks that might impact solvency and liquidity, within their strategic report.

Computershare’s view

Key takeaways we noted and wished to highlight within the guidance:

• It encourages directors to take a broader view, over a longer term, of the risks and uncertainties that goes beyond the specific requirements in accounting standards
• It stresses the use of the term ‘going concern’ only in the context of referring to the going concern basis of accounting for the preparation of financial statements
• The inclusion of companies applying the Code within the scope of the guidance
• Updates to reflect changes in accounting standards and auditing standards
• Additional guidance is provided on overarching disclosure requirements, especially in situations where significant judgement was involved in the assessment of the appropriateness of the going concern basis of accounting or the conclusion that there are no material uncertainties
• Additional guidance is provided on techniques that could support the assessment process
• The responsibilities of the auditor in connection with the directors’ going concern assessment are explored

The EU Commission published first drafts of its Omnibus I package in February 2025.  The proposals aim to simplify EU rules and boost competitiveness with an initial focus on sustainability reporting, due diligence and European investment programmes. Hence, these are a set of proposals aimed at simplifying sustainability regulation and reporting to ease the regulatory burden on companies. The proposals can be found here: Omnibus I - European Commission

Computershare’s view

We welcome the proposals to simplify sustainability reporting, recognising the complexity and burden of reporting to date. However, the proposals are yet to change any of the criteria or data points that companies will be required to report against for the Corporate Sustainability Reporting Directive (CSRD). As it stands, the key focus has been to reduce the number of companies in scope and introduce a two-year delay for large companies with more than 1,000 employees. The proposals do bring some uncertainty about the future, recognising that many companies have dedicated significant resources to sustainability reporting.  Each proposal within the Omnibus package has its own adoption timeline and process.  We will watch this space with interest and keep our readers informed.

Georgeson has published its Global Institutional Investor Survey 2024 report. The report provides valuable insights into the evolving landscape of investor engagement, strategic activism and ESG priorities. Explore the key findings and learn about global institutional investors’ plans, focus areas and priorities for engagement this year – and what they expect at 2025 AGMs.

Georgeson recently published an update related to the Pre-Emption Group’s Statement of Principles which looks at how FTSE 350 companies have updated their guidance in 2024 to issue shares without pre-emptive rights. The memo explores the AGM proposals put forward on this topic across FTSE 250 index during the calendar year and the level of support received by shareholders.

There are also guidance updates from proxy advisor guidelines and a breakdown of the level of issuance authorities sought by sector.