The FCA has reviewed the existing requirements in light of the new Directors’ Remuneration reporting regulations and Narrative Reporting regulations in order to ensure that any duplication is kept to a minimum and that unnecessary requirements are not imposed on listed companies. The proposal is therefore to remove those listing rules relating to directors’ remuneration unless the rule applies to both premium listed UK companies and companies incorporated overseas, as the latter group are not within the scope of the new regulations.

The proposals are intended to apply to premium listed companies incorporated in the UK with years ending on or after 1 January 2014. This means that companies with years ending on or after 30 September 2013 through to 31 December 2013 will still need to comply with the current listing rules requirements in addition to the new disclosure regulations.

Responses to the consultation are requested by 9 October 2013.

 Summary of the proposals

• All of the disclosures relating to remuneration, currently contained in LR 9.8.8 are to be removed. The only exception to this is LR 9.8.8R (9). This rule requires the disclosure of the unexpired term of any directors’ service contract of a director proposed for election or re-election at the forthcoming general meeting. It is proposed to keep this rule, which is applicable to both UK and overseas companies with a premium listing, in order to maintain the current requirements for overseas companies. 
• There are no changes proposed to LR9.8.6R. This rule relates to the disclosure of directors’ share interests at end of the period under review and any changes between this date (LR9.8.6R (1)); share interests disclosed to the listed company in accordance with Disclosure and Transparency Rules 5 (LR 9.8.6R (2)); a statement that the business is a going concern (LR 9.8.6R (3)); details of shareholder authority for purchase of its own shares and the details of such purchases (LR 9.8.6R (4)); a statement of how the company has applied the principles set out in the UK Corporate Governance Code (LR 9.8.6R (5)) and a statement of compliance with the Code, or details of non-compliance (LR 9.8.6R (6)). It should be noted that companies incorporated outside the UK with a premium listing must comply with LR 9.8.6R (5) and (6). 
• There are also no changes proposed to LR 9.4.1R, which deals with the requirement for shareholder approval of employee share plans and long term incentive plans and LR 9.4.2R which allows exemptions for all employee plans and plans put in place for one director to facilitate, in unusual circumstances, the recruitment or retention of the relevant individual. It is however, worth noting that companies may need to ensure that the policy report, which is to be approved by shareholders, explicitly allows for the use of this provision. 
• There is also a minor change to LR 9.8.13R in response to the Narrative Reporting Regulations which changes existing references to ‘summary financial statements’ to ‘strategic report with supplementary information’ which will reflect the new requirement for the production of a strategic report.

The consultation paper can be found here (link to FCA website).