FCA, FRC and PRA joint statement on Covid-19 – Our summary

The FCA, FRC and PRA announced on 26 March 2020 a series of actions in a joint statement to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets.

There is a lot of information, including the FRC setting out guidance for companies and auditors, and we have summarised some of the key points below:

The joint statement makes clear that whilst the reduction in activity associated with Covid-19 could be sharp and large, it is likely to rebound sharply when social distancing measures are lifted.
The FCA is now permitting a delay in the publication of listed company audited annual financial reports from 4 to 6 months from the end of the financial year. This is intended as a temporary measure and will end when the disruption ends. Companies that feel it is appropriate to utilise the additional two months are urged to do so.
The guidance addresses the difficulties companies currently face in making forward-looking judgements in their financial statements: for example, in strategic reports and viability statements, with a focus on appropriate disclosure of material uncertainties and going concern issues.
Companies should still observe their disclosure obligations under MAR and update the market where Covid-19 and government responses to it may alter their prospects.
On corporate governance, companies must continue to operate an effective control environment, consider how they will secure reliable and relevant information, and pay attention to capital maintenance.
The FRC Lab has provided a useful infographic outlining what investors want to see.

Published 27 March, 2020