Policy RoundUp - August/September 2025

Efforts to boost UK market competitiveness remain front and centre, with the new UK–US Transatlantic Taskforce aiming to deepen cooperation between the UK and US capital markets and on digital regulation, and examining ways to improve cross-border access to capital.

Various other initiatives aim to improve the UK’s market competitiveness. The CBI’s roadmap for reforming listed equity markets called for bold reforms to revitalise UK public equity markets. These include removing stamp duty on UK equities, simplifying IPO costs, increased pension fund investment in UK listed shares and rebalancing stewardship expectations. It also called for an equity investment culture targeted at retail investors, which will be taken forward (as part of the Leeds reforms) by the Investment Association’s Retail Investment Campaign, chaired by Sasha Wiggins, which is gearing up for launch next April, with the aim of building a stronger retail investment culture to re-engage private investors in public equity. The Investment Association Foundations of Growth report sets out key recommendations for EU policymakers to help mobilise private capital, while the Railpen-led Governance for Growth Investor Campaign also calls for governance reforms that will give long-term capital greater confidence in UK listings.

Meanwhile, in light of recent increases in buybacks, the FCA is consulting on changes to buyback disclosures, proposing weekly rather than daily announcements to align with UK MAR safe harbour provisions and reduce administrative burden. The Investor Forum’s Stewardship of Share Buybacks also sets out investor expectations for boards, including governance, alternatives to buybacks, and long-term value impact.

The FCA has also highlighted compliance risks in market soundings, reminding firms to limit the number of sounding recipients, use approved scripts and manage internal email circulation carefully to avoid unlawful disclosure.

Also, a quick reminder that the new failure to prevent fraud offence is now in force, to hold companies accountable for profiting from fraud, even if senior management was unaware or did not authorise the activity. This is designed to encourage a corporate culture shift towards better fraud prevention and puts a spotlight on internal controls and board oversight, which may sharpen investor and proxy adviser focus on governance disclosures around fraud risk. 

The Investor Forum's latest Stewardship 360 report, Aim to Main, explores the barriers companies face when moving from AIM to the Main Market, and the stewardship expectations investors apply along that journey, arguing that stronger governance standards are signals of quality that underpin long-term market attractiveness.

In the reporting space, the Government has confirmed plans to replace the FRC with a new Corporate Reporting Authority (CRA), with stronger powers to hold directors accountable for serious failures in their reporting duties. Consultation will follow this autumn, including on a proposed new Public Interest Entity (PIE) categorisation for companies and LLPs with at least 1,000 employees and turnover of £1 billion (a narrower scope than the “750:750” PIEs proposed by the previous government).

The FRC is proposing that audit committees have oversight of supplier payment practices to be included in directors’ reports from 2026, to better link supply-chain resilience to governance and board accountability (consultation closes on 23 Oct).

The FRC’s Annual Review of Corporate Reporting found overall quality maintained, but persistent gaps between the FTSE 350 and small cap/AIM companies. Common issues include inconsistencies between financial statements and the front end of annual reports, alongside impairments, and cash flow disclosures.  The FRC has again emphasised the need for clearer explanations of significant judgements, estimates and assumptions, especially given global political and economic uncertainty. It also reiterated its expectation that companies conduct robust pre-issuance reviews to identify issues before publication, and called for greater consistency and clarity in narrative reporting for the 2025/26 season.

The FRC’s Innovation & Improvement Hub also launched this month, with early priorities including collaborating with companies to reduce the length of annual reports and accounts.

The Society responded to all three UK consultations on sustainability reporting (UK SRS), transition planning and assurance. We supported alignment with ISSB standards, safe harbour provisions for forward-looking data, and a phased approach to transition plan disclosures. We also held another successful and productive roundtable with the Department for Business and Trade and DESNZ to discuss the practical implications around these three UK sustainability reporting consultations. This followed on from the workshop held in June on the Non-Financial reporting, and provided another fantastic opportunity for our policy committee and other key members to influence government policy that will affect our members, before firmer policy proposals are published in the formal consultation expected later this year. We also still await the FCA consultation on sustainability and transition plan reporting, expected in Q3.

A recent Deloitte analysis shows that a significantly high number of FTSE 100 companies made material prior-year adjustments to climate/sustainability metrics in 2025, mostly related to GHG emissions. However, whilst the findings illustrate the ongoing challenges in getting sustainability reporting right, some of these adjustments were due to data improvements, which is actually a positive as it indicates reporters are focusing on better quality reporting.

At EU level, EFRAG’s proposed simplifications to ESRS aim to reduce complexity and improve ISSB interoperability. The Society responded, welcoming the changes but calling for clearer impact materiality thresholds and guidance to avoid undue scrutiny from assurance providers.

As usual, more detail and links are below for those of you who would like to delve deeper!

Best wishes,

Liz Cole
Head of Policy and Communications
Linked In
www.irsociety.org.uk