FCA consultation - changes to the Listing Rules resulting from the new directors' remuneration


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This update will only be relevant to UK incorporated companies with a premium listing on the Main Market.


What are the proposed changes?


On 1st October 2013, two new reporting regimes will come into force relating to directors’ remuneration and strategic reports (see background below). 

The new directors’ remuneration report regulations will impose similar reporting requirements to those set out in the Listing Rules, chapter 9.  To avoid duplication, the FCA has published a consultation paper which proposes to delete LR 9.8.8R in its entirety, save for LR 9.8.8R(9) (details of any unexpired term of any directors’ service contract).  LR 9.8.8R(9) is applicable to premium listed overseas incorporated issuers and will continue to apply. 

The FCA is also proposing to substitute the reference to “summary financial statements” with “a strategic report with supplementary information”, reflecting the revised term under the strategic reporting regulations.


When will the changes take effect?


The revised Listing Rules will apply to UK incorporated premium listed companies with financial years ending on or after 1 January 2014.  Companies with a year-end falling between 1 October 2013 and 31 December 2013 will be required to comply with the dual reporting regime, ie the existing requirements under LR 9.8.8R and the new directors’ remuneration report regulations.




The Government has recently introduced regulations which: (i) amend the content requirements (and voting procedure) for the directors’ remuneration report; and (ii) introduce additional disclosure requirements for the strategic report (replacing the business review).  These provisions will apply to UK incorporated companies listed (premium and standard) on the Main Market for financial years beginning on or after 30 September 2013.

The directors’ remuneration report will comprise of three parts:










    • a directors’ remuneration policy setting out the company’s forward-looking policy on remuneration (subject to a binding shareholder vote at the first AGM after 1 October 2013 and then at least  once every three years);
    • an annual report on remuneration setting out actual payments made during the last financial year (subject to an annual advisory vote); and
    • an annual statement from the chairman of the remuneration committee summarising any major decisions on directors’ remuneration, any substantial changes to directors’ remuneration and the context in which those decisions/changes were made.


The annual report and accounts will need to contain a separate strategic report (replacing the business review) containing information, in addition to the existing requirements of the business review, relating to:








    • the company’s strategy and business model; and
    • the number of men and women on the board, within management and in the organisation as a whole.


In addition, the directors’ report will need to contain disclosures concerning greenhouse gas emissions.

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