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

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