Corporate Update Bulletin - 20 March 2025

10 min read

Welcome to the latest edition of Corporate Update, our fortnightly bulletin offering a five-minute read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.

In this issue:

News

Treasury publishes new policy to ensure regulators support growth

On 17 March 2025, HM Treasury announced its new action plan for regulators and regulations to support growth. The policy set out its three main targets to achieve this goal:

  • Reduce the complexity and bureaucracy of regulation by cutting administrative costs for business by 25%, by the end of this Parliament: In order to achieve this goal, the government will undertake a new “baselining exercise” to understand the costs of regulation for businesses, alongside delivering an “ambitious regulation reform programme” to cut back “unnecessary red tape”.
  • Give regulators greater clarity on their roles in order to reduce uncertainty within the regulatory system: Regulators will have their duties “simplified” in order to align with the government’s focus on investment and growth. The Financial Conduct Authority, Financial Ombudsmen Service and Prudential Regulation Authority, amongst others, will all be reviewed under this approach.
  • “Challenge and shift excessive risk aversion” within the regulatory system: regulators will be encouraged to make their decisions “proportionate” to ensure that both consumer protection and growth are targeted. As part of this approach, the Regulators will be subject to heightened accountability and formal performance reviews against their Key Performance Indicators.

Companies House updates timing of implementation of ECCTA changes

Companies House has updated its Transition Plan, confirming that the registration of Authorised Corporate Service Providers (ACSPs), which are individuals or entities subject to anti-money laundering regulations who, once registered, are authorised to provide identity verification services and filing services on behalf of companies, would commence from 18 March 2025. This forms one aspect of the identity verification regime, which will require individuals including directors, people with significant control (PSCs) and presenters filing information with Companies House to verify their identity. According to the latest timing set out in the plan, individuals should be able to voluntarily verify their identity as of 8 April 2025 although the regime is not expected to become mandatory for new directors until Autumn 2025. The relevant secondary legislation to commence the relevant provisions of the Economic Crime and Corporate Transparency Act relating to procedures for identity verification and the authorisation of ACSPs has also been made (see Legislation below).

Companies House publishes guidance on identity verification

On 18 March 2025, alongside the launch of ACSP registration service, Companies House published guidance on the upcoming identity verification regime. The guidance includes details of who must verify their identity, when identity verification is required, and the different ways for verifying one’s identity.

Individuals will be able to verify their identity directly online with Companies House using GOV.UK One Login or in person using One Login at a designated Post Office. Alternatively, people can use an ACSP to help them verify their identity. Once verified, individuals will be given a unique identifier or personal code which would allow access to Companies House services and records in relation to companies they are involved in.  

Companies House has also published guidance covering how a company can be removed from or restored to the register.

Parker Review publishes report on ethnic diversity across boards and senior management

On 11 March 2025, the Parker Review published its latest ​report​ examining the ethnic diversity of the boards and senior management of the UK’s largest private companies, as well as members of the FTSE 350. The Parker Review had set a target for each FTSE 100 company to have at least one ethnic minority director on its board by the end of 2021 and for each FTSE 250 company to do the same by the end of 2024. This is its first report since the 2024 target date for FTSE 250 companies. Of the FTSE 250 companies profiled (who provided the figures via a voluntary census), 82% reported meeting the Parker Review target of ​having at least one director on their board from an ethnic minority by the end of 2024. 24 of the 34 private companies invited to participate in the Review met this target as at 31 December 2024.

FCA warns against strategic leaks in takeovers

On 14 March 2025, the Financial Conduct Authority (FCA) published its Primary Market Bulletin 54, in which it reiterated the importance of not leaking inside information relating to a takeover, amidst concerns of a rise in culture of ‘strategic leaking’. The FCA comments that there has been an increase in “material information” ostensibly being deliberately given to the press and which can have a ‘significant effect’ on the share price of the offeree company or offeror. The FCA reminds companies and their advisors that such leaks of inside information are likely to be considered as a breach of the Market Abuse Regulations.

Regulators drop proposals to make enforcement investigations public and rules on diversity and inclusion

Following heavy criticism during the consultation period, the FCA has published a letter sent to the House of Commons Treasury Select Committee stating that it will not proceed with its proposals to disclose investigations into a regulated firm where the ‘public interest’ test was satisfied and will therefore retain its current approach to only publicise such investigations in “exceptional circumstances”, citing a lack of consensus behind its initial proposals.

The FCA will, however, proceed with its proposals to confirm the existence of investigations which have been officially disclosed by a regulated firm (for example, in market announcements) or where the disclosure has been made by another regulator, as well as to issue public notifications on the potentially unlawful activity of unregulated firms or regulated firms acting beyond their regulatory perimeter to prevent consumer harm. The FCA has also committed to anonymously publishing more detailed information on its bulletins regarding issues currently being investigated.

In addition, the Prudential Regulation Authority (PRA) has also published a letter to the Select Committee stating that both the PRA and FCA do not currently plan to introduce the new rules on diversity and inclusion in the financial services sector which were the subject of a joint consultation in 2023.

Government consults on mandatory ethnicity and disability pay reporting for large companies

On 18 March 2025, the government launched a consultation seeking views on how to introduce mandatory ethnicity and disability pay reporting for large employers (those with 250 or more employees). Responses to the consultation will help to shape proposals which will be included in the upcoming Equality (Race and Disability) Bill, which was announced in the King’s Speech in July 2024.

The government is aiming to use a similar reporting framework for ethnicity and disability to that already in place for gender pay gap reporting, but recognises the distinct considerations for ethnicity and disability, particularly in data collection and analysis. In particular, the government is seeking views on whether the geographical scope of reporting and the set of pay gap measures should be the same as those used for gender pay reporting, whether employers should report on the overall breakdown of their workforce by ethnicity and disability and the percentage of employees who did not disclose their personal data on their ethnicity and disability, and whether employers should have to produce an action plan about what they are doing to improve workplace equality for ethnic minority and disabled employees. The consultation closes on 10 June 2025.

Legislation

Regulations commencing certain aspects of the identity verification regime and other ECCTA provisions made

On 13 March 2025, the Economic Crime and Corporate Transparency Act 2023 (Commencement No. 4) Regulations 2025 were made. The Regulations bring into force certain provisions of the Economic Crime and Corporate Transparency Act 2023 including:

The Regulations also provides that the new offence of failing to prevent fraud will come into force on 1 September 2025.

MARKET INSIGHTS

ONS publishes Q4 2024 data on UK M&A activity

The Office of National Statistics (ONS) has published its bulletin on UK M&A activity for the fourth quarter of 2024 (October to December). The provisional estimates show that the number of monthly domestic and cross-border M&A fell between October to December.

  • The number of domestic and cross-border M&A was 402 (which was 62 transactions fewer than the previous quarter).
  • The UK’s domestic M&A was valued at £8.6 billion during this period, whilst the value of deals where UK companies acquired foreign companies (‘outward M&A’) was £1.4 billion.

Case Law

Macdonald Hotels Ltd v Bank of Scotland Plc [2025] EWHC 32 (Comm)

Court considers (obiter) effect of split execution of documents

This case involved claims made against the Bank of Scotland for losses as a result of the disposal of three hotels, which the claimants allege were forced by the bank, and that in forcing the sale, the bank had acted in bad faith, contrary to the express term relied on and/or the alleged implied terms in certain agreements (including shareholder’s agreement and facility agreements) between the parties. The High Court (HHJ Pelling KC) considered a number of issues, including implied terms, the ‘Braganza’ duty (an implied contractual term requiring a party to exercise contractual discretion honestly and in good faith and in a manner that is reasonable and not irrational, arbitrary or capricious) and the prohibition of assignment.

Notably, in comments made obiter, the judge found that a facility agreement entered into between the parties would not be considered as a deed where some of the parties had executed as a deed, but others had not. HHJ Pelling KC considered that in order to be regarded as a deed, the document must make clear that all parties intend it to be treated as such. This is significant as the comments have given rise to questions relating to the practice of split execution, where some parties execute a document as a deed and others sign under hand, which is likely to arise in the context of certain financing documents, particularly intercreditor agreements (where LMA templates include wording similar to that discussed in the case) and security documents.

Publications

The Sustainability Omnibus – streamlining sustainability regulation

Slaughter and May has published a briefing on the ‘Sustainability Omnibus’ changes proposed by the European Commission, aimed at streamlining the EU’s sustainability and value chain due diligence legislation, with a target of reducing sustainability reporting burdens on corporates and financial institutions by 25%. The briefing outlines the relevant timescales, the main changes proposed, and how companies can respond to the uncertainty.

Litigation trends arising from the development of AI

Slaughter and May has released the latest Digital episode of its Horizon Scanning podcast show, in which partners Ross Francis-Pike and David Ives explore why the development of AI is leading to an increase in litigation trends and what businesses should watch out for. 

This material is provided for general information only. It does not constitute legal or other professional advice.