FCA calls for (at least) 2-week delay in company reporting due to Covid-19
UK financial regulator the FCA has announced over the weekend that it “strongly requests” for all listed companies to observe a moratorium on the publication of preliminary financial statements for at least two weeks. The regulator stated that it was sending a letter (draft here, pdf) to companies regarding its recommendation. The FCA stated that investors in capital markets rely on trustworthy information on the companies whose instruments they trade. The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly. It is important that due consideration is given by companies to these events in preparing their disclosures. Observing timetables set before this crisis arose may not give companies the necessary time to do this. In addition, listed companies and the audit profession are facing unprecedented practical challenges during the Coronavirus crisis. The FCA believes the practice of issuing preliminary financial statements in advance of the full audited financial statements is adding unnecessarily to the pressure on companies and the audit profession at this moment. The FCA notes that the practice of issuing preliminary financial statements is common among UK-listed companies but is not required by either the Listing Rules or the Transparency Directive. Rather, the requirement is that companies publish full audited financial statements within four months of the financial year end. The FCA further notes that it is common to publish preliminary financial statements considerably earlier than the four months permitted for the filing of full financial statements. The FCA confirms it in talks with the Financial Reporting Council and the PRA about a package of measures aimed at ensuring companies take the necessary time in these uncertain times to prepare appropriate disclosures and address current practical challenges and the three bodies intend to announce details shortly. The FCA reminds companies that the Market Abuse Regulation remains in full force and listed companies are still required to announce inside information to the market as soon as possible unless a valid reason to delay disclosure under the regulation exists.