FCA reminds issuers to file interim accounts to support distributions

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06 Mar, 2019

The Financial Conduct Authority (FCA) has reminded issuers that where a proposed distribution cannot be supported by the latest set of annual accounts they must file interim accounts with the Registrar of Companies to support any distributions before they are made.

The FCA highlights that failure to file interim accounts is the most common situation where dividends are paid out in a manner which infringes relevant company law.

The FCA highlights that in the last few years it has seen resolutions put to shareholders in general meetings seeking to rectify situations where dividends have been paid in such a manner.  These resolutions aim to put the company, its shareholders, directors and former directors in the position they would otherwise have been in had the interim accounts been filed.  When this approach is proposed, the FCA reminds premium listed issuers to also consider how to apply LR 11.

For more information see the FCA Primary Market Bulletin 20 on the FCA website.

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