In light of the stress the Coronavirus pandemic has put on the financial industry and market participants, the Financial Conduct Authority (FCA) has requested on the weekend that all listed companies suspend the publication of their preliminary financial statements for at least two weeks.
According to the Britsh regulator, listed companies and the audit profession are dealing with unprecedented practical challenges during the current global pandemic. Therefore, the agency believes that expecting companies to issue preliminary financial statements in advance of their full audited statements is adding unnecessary pressure on both parties.
“Investors in capital markets rely on trustworthy information on the companies whose instruments they trade. The unprecedented events of the last couple of weeks mean that the basis on which companies are reporting and planning is changing rapidly,” the FCA said in a statement on Saturday.
“It is important that due consideration is given by companies to these events in preparing their disclosures. Observing timetables set before this crisis arose may not give companies the necessary time to do this.”
FCA reminds listed firms of their Obligations
In the statement, the British watchdog highlights that although it is currently common market practice to issue preliminary financial statements among UK-listed companies, it is not required by either the listing rules or the transparency directive. Instead, companies only need to publish full audited financial statements within four months of the financial year-end.
“The FCA confirms it in talks with the Financial Reporting Council and the PRA about a package of measures aimed at ensuring companies take the necessary time in these uncertain times to prepare appropriate disclosures and address current practical challenges and the three bodies intend to announce details shortly,” the regulator said.
Regulators respond to COVID-19
As the COVID-19 pandemic continues to rattle financial markets, regulators across the world are putting measures in place to try and protect their local markets. Last week, numerous regulators put temporary bans in place against short selling, and Australian regulator ASIC implemented measures to limit the number of trades executed each day on the equity markets, among other developments.
