[World Corporate Law News] FRC Updates NED Pay Guidance | ASIC Issues ETP Rules

Editorial Team – [2025] 180 taxmann.com 282 (Article)

World Corporate Law News provides a weekly snapshot of corporate law developments from around the globe. Here’s a glimpse of the key corporate law update this week.

1. Company Law

1.1 FRC updates guidance on non-executive director remuneration to support good governance

On November 5, 2025, the Financial Reporting Council (FRC) published an updated guidance on the remuneration of non-executive directors (NEDs) as part of its regular updates to the guidance supporting the UK Corporate Governance Code 2024. This guidance does not change the UK Corporate Governance Code itself, but makes clear that the existing principle of Comply or Explain provides companies with flexibility to structure NED remuneration.

The update provides clarity on how companies can structure NED remuneration, recognising that companies may encourage non-executive directors to build personal shareholdings to strengthen an alignment with shareholders and reinforce long-term commitment. However, it emphasises that any approach must be tailored to the specific circumstances of each company.

The guidance makes clear that, in line with the Code, boards have flexibility to pay non-executive directors a portion of their fees in shares, provided they maintain transparency about their rationale and approach.

Where companies consider alternative remuneration structures, the guidance emphasises the importance of preserving independence, noting that performance-related remuneration remains inappropriate for independent non-executive directors.

Richard Moriarty, Chief Executive of the FRC, said:

“The UK Corporate Governance Code’s comply or explain approach gives companies the flexibility to adopt governance practices that work for their specific circumstances and is a key asset for the UK in terms of its international competitiveness. We want to encourage boards to use this flexibility thoughtfully.

“This update will reinforce that companies can take varied approaches to structuring remuneration, provided they preserve director independence and are transparent with shareholders about their decisions. One size doesn’t fit all, so good governance is about finding the right approach for your company.”

Source – Official Guidance

2. Securities Law

2.1 ASIC issues new regulatory guide for exchange-traded product issuers

On November 7, 2025, the Australian Securities and Investments Commission (ASIC) published a new regulatory guide, Exchange-traded products (RG 282), with consolidated information about the treatment of exchange-traded products (ETPs), including exchange-traded funds (ETFs).

RG 282 incorporates INFO 230 Exchange traded products: Admission guidelines (now withdrawn). It also draws from prior ASIC reports and industry expertise to explain key legislative instruments, regulatory relief, and other relevant information, including:

(a) The general obligations that apply to ETP issuers, such as responsible entities of registered managed investment schemes (including AFS licensing requirements and modified design and distribution obligations).

(b) Specific obligations under market operator rules that govern the admission and quotation of ETPs, such as portfolio disclosure requirements, product naming considerations, and liquidity and market-making arrangements.

(c) The general obligations that apply to market operators that admit ETPs, such as approving ETP issuers, portfolio disclosures, liquidity provisions and market-making matters.

Source – News

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