7 May 2025 Sarah Debney Capital Markets - Equity

Primary Market Bulletin 55: reform of the Knowledge Base nears completion

The Financial Conduct Authority has published Primary Market Bulletin 55. In this edition the FCA finalises nearly all the remaining technical notes on the sponsor regime that it has published for consultation in a process that started in PMB 48 and updates further technical notes in the Knowledge Base.

Feedback and guidance following PMB 53

Most of the amendments to the technical notes that were published for consultation in PMB 53 (see our briefing here) have been finalised without change. A small number have been subject to minor correction or amendment which does not impact the substance of the guidance. Two notes have received more substantial amendment/further consideration:

UKLA/TN710.2 - Principles for sponsors

In amendments published for consultation in PMB 53, the FCA added practical examples to describe the proper extent of sponsor services, particularly where preparatory work may be done for a matter that subsequently falls within the definition of sponsor services. For example, if a sponsor provides initial advice on a transaction which is not a reverse takeover or an initial transaction by a shell company, but subsequently becomes such a transaction, work undertaken at an earlier stage may be regarded as a sponsor service. Feedback received by the FCA expressed concern that this approach of applying an element of “look-back” to the definition of sponsor services creates ambiguity at the time the transaction is undertaken. As a result, the FCA is considering this technical note further.

UKLA/TN/209.4: Listing Principle 2 – Dealing with the FCA in an open and co-operative manner 

In PMB 53, the FCA proposed further guidance clarifying that Listing Principle 2 also applies where an issuer becomes aware that they are no longer able to comply with a continuing obligation in the UKLR. The FCA received feedback that the proposed new drafting seemed to create an obligation to self-report any breach of a continuing obligation. In response, the FCA has clarified that the obligation only applies to certain rules that oblige issuers to notify the FCA of non-compliance, including UKLR 6.2.35R, UKLR 13.3.4R(2), UKLR 13.3.7R, UKLR 14.3.3R, UKLR 16.3.2R(2) and UKLR 22.2.4R. 

Consultation on TN/507.1: ‘Structured digital reporting for annual financial statements prepared in accordance with International Financial Reporting Standards’

DTR 4.1.18R provides that where annual financial reports contain annual financial statements that have been prepared in accordance with IFRS, certain disclosures must be digitally tagged using a taxonomy generally accepted in the UK for financial disclosure in regulated markets.

The FCA proposes to update this technical note to: 

  • refer to the EU’s publication of the ESEF 2024 taxonomy. This is to be treated as a ‘generally accepted taxonomy’ for the purposes of DTR 4.1.18R(2). Companies can also use the ESEF 2024 taxonomy for earlier reporting periods in place of the ESEF 2022 taxonomy;
  • update the explanation on using the UKSEF approach issued by the Financial Reporting Council, which incorporates the ESEF taxonomies and can be used for creating ‘multi-target documents’; and 
  • generally, make it shorter and clearer. 

The FCA will configure the National Storage Mechanism to accept filings of annual financial reports with accounts that have been marked up with XBRL markup language (i.e. digitally tagged) using the latest ESEF taxonomies, including the ESEF 2024 taxonomy.

Consequential changes and updates

The FCA proposes changes to a small number of remaining technical and procedural notes which are either updates or consequential on the introduction of the new UK Listing Rules.