FRC consults on revising standards for investment reporting (SIRs)

The Financial Reporting Council (FRC) is consulting on revisions to the Standards for Investment Reporting (SIRs) in order to meet the new regulatory requirements under the Prospectus Regulations, due to come into force this July

This will see amendments to the existing five Standards for Investment Reporting (SIR) 1000 to 5000, while a brand new standard will be introduced following feedback on the exposure draft for a new SIR 6000 dealing with Quantified Financial Benefits Statements.

The current 1000-5000 guidance needs to be updated to take into account new EU wide Prospectus Rules which come into effect from July 2019 which will affect reporting accountants (RAs) involved in UK capital market transactions.

The Standards for Investment Reporting set requirements and provide guidance for reporting accountants carrying out reporting engagements on UK investment circulars. This includes private reporting, for example on working capital statements, as well as public reporting engagements on published financial information. On the whole, the standards have not been updated since 2006-08, when the last major revision of the rules relating to prospectuses took place.

SIR 1000 provides basic principles and procedures for all relevant engagements, and SIRs 2000-5000 provide additional principles and procedures for specific types of public reporting.

The key amendments to existing standards will see the legislative and regulatory framework updated to take into account the new Prospectus Regulations and the inclusion of references to the fair, balanced and understandable requirements of the UK Corporate Governance Code. The consultation is looking for feedback on whether to extend the reporting responsibilities to include more detailed reporting on materiality; scope of work; and information about risks identified.

Due to lack of finalisation of the final UK prospectus rules, FRC cannot confirm the exact plans for SIR 3000 Profit Forecasts but said: ‘We have assumed that current proposals removing the requirement for a report on a forecast or estimate from an accountant will be implemented. If they are not the SIR will be revised accordingly.’

Explaining the rationale for the introduction of the new SIR 6000, FRC stated: ‘Changes in market practice and rules, including the new Quantified Financial Benefits Statement (QFBS) regime under the City Code for Takeovers and Mergers (City Code) meant that consideration was needed about the need for a new SIR to deal with relevant public reporting engagements.’

The FRC is particularly interested in hearing whether the proposed revisions provide a sound framework for the work carried out by reporting accountants and meets stakeholder expectations, including whether the current format of reporting is sufficiently transparent and informative about the opinions being given.

The review is necessary due to changes in EU Rules, with a new Prospectus Regulation ((EU) 2017/1129) being adopted on 14 June 2017 and due to be fully in force across the EU by July 2019, regardless of the final position on Brexit the rules will be adopted in the UK. 

The FRC will have to amend the references to specific rules within the Standards for Investment Reporting so that they can be used in conjunction with the new prospectus rules when they are implemented in the UK.

The closing date for comments on the consultation is 5pm on Friday, 26 July 2019. Email James Ferris at

FRC Consultation on Revising Standards for Investment Reporting, issued 01 May 2019

Sara White


Average: 5 (1 vote)