Successes

The QCA has had a number of significant breakthroughs in recent years, resulting in savings for the average SQC of over £200,000 p.a. These successes include:

• June 2008 - Combined Code Review by the Financial Reporting Council  - The new pre amble setting out the purpose of Corporate Governance is based on that in the QCA guides to Corporate Governance. W e achieved a concession whereby in a company outside the FTSE 350 the Chairman may be a member of the Audit Committee (but not its Chairman) so long as he is deemed independent on appointment.
  
• June 2008 - Achieved change/delay to section 80 of the Climate Change Bill 2008 (which called for all companies that have to produce a Business Review to include in it  a report of their carbon emissions), until such time as a generally accepted method of measuring and reporting has been developed, such as that the CBI are working on.
  
• February 2007 - As part of our work on the new AIM Rules introduced in February, achieved removal of blanket disclaimer on AIM documents proposed by Stock Exchange - work of the NOMAD committee.
  
• December 2006 - Filing dates: In early 2006 the Government proposed to align the filing dates for submitting tax returns to HMRC with submitting accounts with Companies House. This would have meant at least a three-month acceleration in preparing tax returns – a considerable burden on business. And a burden that would have affected smaller companies disproportionately. The QCA Tax Committee lobbied hard to prevent this change. Nothing was heard, however, until the Pre-Budget Report (PBR) in December, when Gordon Brown announced that no change would be implemented at this time. This was one glimmer of good news out of a dull PBR, and an important success for the QCA Tax Committee.
  
• October 2006 - Directors' liability: Earlier this year the Treasury proposed to extend the new liability regime of the Transparency Directive to AIM companies. However, successful lobbying by the QCA Legal Committee managed to stave off this possibility. We firstly persuaded the CBI, the IoD, and the Stock Exchange to support our objection, altering their original positions. The Treasury listened to these concerns and on 13 October announced that the new liability regime would not be extended to AIM companies.
  
• May 2006 – Company Law: The Quoted Companies Alliance, along with the Association of British Insurers and the Institute of Directors, successfully lobbied the government to include greater protection against litigation as part of the shake-up to company law. Ministers have agreed to adopt a “safe harbour” system. This will shield directors from lawsuits if forward-looking reports turn out to be untrue as long as they were made in good faith and were not reckless. This should facilitate more insightful narrative reporting, which will benefit businesses, investors, and the economy in general.
  
• May 2005 - Prospectus Directive: Together with APCIMS, the QCA overturned a potentially costly and time-consuming UK interpretation of the Prospectus Directive relating to capital raising by SQCs. This was a classic case of 'gold plating' which we managed to prevent by some adroit lobbying.
  
• November 2004 - Operating and Financial Review: Together with other organisations the QCA successfully persuaded the DTI to loosen the legal structure of their original proposals, and the involvement of Auditors. This move should enable company directors to produce more meaningful reports for shareholders, and also avoid extra audit costs.
  
• December 2003 - London Stock Exchange fee reduction: The QCA, along with many other bodies, registered their disappointment with the substantial fee increases introduced in April 2002 – especially as they were introduced alongside cuts in service levels. The LSE announced that the fee increases were to be reduced.
  
• October 2003 - Transparency Directive: The QCA successfully lobbied strongly against the mandatory nature of the proposal requiring all quoted companies to publish quarterly profit/loss accounts. This means there has been a significant reduction in the proposed scope of the information required – from interim style accounts to a brief trading statement. Not only is this saving companies extra internal costs, but also the likelihood of additional audit fees too.
  
• June 2003 - Higgs report: The QCA was asked to provide company representatives to give their views on Corporate Governance to Derek Higgs during the research phase of his work. Their comments led to the creation of the small and medium sized company chapter. The QCA also made representations following the initial proposals which contributed to the amendments made in compiling the final draft – a key concession being the reduction in the minimum number of NEDs required for SQCs to 2, so saving companies considerable costs over time.
  
• May 2003 - Profile of the sector: The FT dropped its coverage of the SQC sector earlier in 2003. The QCA made representations that the coverage should continue to encourage investment in the sector. This was reinstated, with a specific column dedicated to SQCs being introduced from May 2003, and full page coverage on several days a week from October 2004. As a result The Times also increased its small cap coverage. SQC newsflow stimulates liquidity in the SQC market.
  
• Prospectus Directive: The QCA’s work was pivotal in obtaining a number of concessions from the original proposals put forward in the EU Prospectus Directive. Following our lobbying activities, the key item, namely the requirement for all quoted companies to update their prospectus annually has been dropped by the EC. This ‘win’ is estimated to have saved quoted companies an average of £100k p.a each.
  
• 2001 to 2003 - EIS relief: Original proposals were for this relief to apply only to companies with under £10m of gross assets. Due to continued QCA lobbying activities, this threshold was increased to £30m . Efforts are continuing to move the basis of this test from gross assets to net assets.