Featured Product

    FCA Introduces Rule to Enhance Climate-Related Financial Disclosures

    December 21, 2020

    FCA published the policy statement PS20/17 to enhance climate-related disclosures by listed issuers and clarify existing disclosure obligations. PS20/17 contains a final rule and guidance that set out a requirement for commercial companies with a UK premium listing to include a compliance statement in their annual financial report. The new rule will apply for accounting periods beginning on or after January 01, 2021. The first annual financial reports subject to this rule would then be published in Spring 2022. PS20/17 also contains a technical note, which applies with immediate effect and clarifies the existing disclosure obligations in the legislation and the FCA Handbook.

    The new rule in PS20/17 requires commercial companies to set out, in their compliance statement, whether they have made disclosures consistent with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) or explain why they have not done so. The instrument giving effect to the new rule is presented in Appendix 1 of PS20/17. Post consultation, FCA has made the following changes to the rule:

    • Amended the rule to promote transparency of any steps companies are taking or plan to take to make consistent disclosures in the future
    • Provided additional guidance on the limited circumstances in which FCA would expect issuers to explain, rather than disclose
    • Provided guidance to clarify that a company’s determination of consistency with the TCFD recommendations should be informed by a detailed assessment of disclosures which considers the TCFD published guidance materials
    • Provided additional high-level guidance in relation to the level of detail to be included in disclosures of companies

    The final rule will directly impact commercial companies with a UK premium listing. Other listed issuers may also be interested in the plans to consult in the future on extending the rule to a wider scope of listed issuers. As at December 07, 2020, the rule will apply to 460 companies on the FCA Official List. The final technical note will also impact a wider scope of listed issuers, including listed issuers, issuers with securities admitted to trading on regulated markets, and other entities in scope of requirements under the Market Abuse Regulation and the Prospectus Regulation. PS20/17 will also be of interest to sponsors of listed companies, corporate finance and other advisors, accountants and auditors, consumer groups and individual consumers, industry groups, trade bodies and civil society groups, regulated firms, investors, policymakers and regulatory bodies, industry experts and commentators, and academics and think tanks.

    FCA is planning to issue a consultation paper in the first half of 2021 on proposals to extend the application of this rule to a wider scope of listed issuers. FCA will also consider consulting on strengthening the compliance basis of this rule. FCA is separately planning to consult on potential client-focused TCFD-aligned disclosures by UK-authorized asset managers, life insurers, and FCA-regulated pension schemes in early 2021.

     

    Related Links

    Keywords: Europe, UK, Banking, Insurance, Securities, PS20/17, TCFD Recommendations, Sustainable Finance, CP20/3, Climate Change Risk, Disclosures, ESG, FCA

    Featured Experts
    Related Articles
    News

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597