COVID 19 - FCA Primary Market Bulletin, AGMs, accounts, Companies House and M&A

As the COVID-19 outbreak, and its impact, escalates rapidly, various pieces of guidance have been published for companies to consider.

FCA Primary Market Bulletin

The Financial Conduct Authority (FCA) has published a Primary Market Bulletin (PMB No. 27) which discusses a number of issues for listed companies in relation to COVID-19.

• Market Abuse Regulation – The FCA reminds issuers of their obligations in relation to inside information and that their operational response to COVID-19 may itself meet the requirements for disclosure under MAR. It also reminds issuers to continue to disclose PDMR dealings to the stock market and the FCA.
• Market volatility and suspension of trading – The FCA says that it intends to continue to maintain open and orderly markets despite the current volatility.
• Delays in corporate reporting – The FCA notes that there may be logistical issues in connection with the production and finalisation of forthcoming annual reports and accounts. It says that it expects issuers to put in place measures to minimise the potential impact. If an issuer does not believe it is able to meet its continuing obligations it should take appropriate advice and contact the FCA to discuss its situation.
• Shareholder meetings – The FCA recognises that there may be issues in relation to forthcoming shareholder meetings, and that issuers may want to use virtual meeting methods.
• Corporate transactions – The FCA will continue to review documentation for corporate transactions in accordance with the principles set out on its website. Issuers are encouraged to speak to their sponsor in relation to urgent transactional issues.

AGMs

We have published a briefing on the impact of COVID-19 on AGMs.

ICSA: The Chartered Governance Institute has also published a guidance note on the conduct of AGMs in light of COVID-19. It sets out the following possible options for companies which are due to hold an AGM in the coming months:

• adapting the basis on which the company holds the AGM;
• delaying convening the AGM, if the notice has not yet been issued;
• postponing the AGM, if permitted under the articles of association;
• adjourning the AGM; or
• conducting a “hybrid” AGM, if permitted under the articles.

Annual reports and accounts

The Financial Reporting Council (FRC) has issued guidance for auditors who may face practical difficulties in carrying out audits as a result of COVID-19.

Companies which are unable to file their accounts on time because of COVID-19 may make an application (online or by post) to Companies House to extend the period allowed for filing. Details of how to make such an application are available here. If the company fails to apply for an extension prior to the filing deadline, and  the accounts are not filed on time, an automatic penalty will be imposed.

Companies House

Companies House has now closed its Belfast, Edinburgh and London offices. Paper documents can still be delivered to the Belfast and Edinburgh offices (details available here) but this option is not available for the London office. All hard copy Companies House filings should be sent to the Cardiff office at Crown Way, Cardiff, CF14 3UZ. Most companies and LLPs should be able to make most of their filings online using the WebFiling service. Further details about WebFiling are available here.

All same day services have been suspended until further notice and we understand that incorporations and registrations are currently taking longer than usual.

M&A

The rapidly evolving COVID-19 situation means that we cannot look too far ahead to predict what will happen next in the context of M&A. However, for those already involved in an M&A process or about to embark on one, there are some immediate issues for buyers and sellers to consider. We have published a briefing in which we look at issues for (a) deals that are between signing and closing; (b) deals that are in the course of negotiation; and (c) deal processes that are about to launch. We also make some general observations that apply to all M&A transactions.

Employment

Employers have an obligation to ensure the health and safety of their workforce – in many European countries this is a strict liability duty, rather than a "reasonable efforts" test. Regardless of this legal obligation, employers will of course wish to ensure that they keep their employees safe and healthy. Our employment team has published some practical advice for employers and examples of some of the questions which employers may be facing.

Further information

For further information and publications on COVID-19, see our hub page on navigating the COVID-19 outbreak.