Policy
Fourth National Lottery Licence: Regulatory Handbook
The Commission’s regulatory handbook sets out our regulatory approach to the National Lottery.
24. Regulatory reporting requirements (section 1)
24.1 This section sets out a core set of information that we require the Licensee to report to us during the Fourth Licence, consistent with Condition 24.10. The regulatory reporting requirements are designed to complement other elements of our Regulatory Model and embed the assurance requirements outlined in section 22.
24.2 In defining these requirements, we focus on areas where access to regular and timely information is expected to be important in order for us to form an appropriate understanding of the Licensee’s operations. This in turn will facilitate our monitoring and assessment of Licensee compliance with Fourth Licence conditions and support the delivery of our statutory duties.
24.3 Requirements include Regular Reporting – where information is required for example on an annual, quarterly, monthly or weekly basis – as well as ad hoc requirements which may be triggered by defined circumstances, or upon request by us.
24.4 In addition to the regular and ad hoc reporting requirements, there are notification requirements, including in relation to exception reporting (as set out in Condition 24 and Table 9), which requires the Licensee to promptly notify us about breaches and exceptions. Notification requirements are important to ensure that, where appropriate, we are made aware of changes in circumstances in a timely manner.
24.5 Some of the reporting requirements are dependent on the Licensee’s business plan for the Fourth Licence, its financial arrangements and other elements of its operations or structure. In these cases, the reports are only defined at a high level in the current version of this document. More specific definitions of the contents of these reports will be developed at a later stage20 and included in an updated version of this Regulatory Handbook, as outlined in section 2.
24.6 Our requirements are split thematically and flow from various areas of the Fourth Licence as follows:
- compliance and good governance (Conditions 4 and 22)21, covering reporting and notification requirements in selected areas necessary for us to maintain appropriate visibility over the Licensee’s approach to compliance and governance
- protecting Participants’ interests (Condition 8), covering key information we require outside of the annual assurance cycle in order to monitor performance and trends related to Participant interests
- access and distribution (Conditions 9 and 10), covering key information to help us understand the appeal and reach of the National Lottery and the distribution of National Lottery products
- branding and National Lottery Intellectual Property (IP) (Conditions 13 and 19), covering important information which we need to be aware of as owners of the National Lottery brand
- good causes contribution (Condition 15 and Schedule 5), covering financial information that allows us to monitor payments to Good Causes
- financial and operational resilience (Condition 18), covering the business continuity of the National Lottery through Resilience Assurance Statements, as well as the notification of any Financial Distress Events, and
- exit (Condition 27), covering the Exit Plan that will have to maintained and provided to us during the Fourth Licence.
24.7 In this section we:
- present a summary overview of our reporting requirements, and
- for each of reporting areas listed above, detail the reports expected to be required and their expected contents and frequency.
Overview of reporting requirements
24.8 Table 2 provides a snapshot of the reporting requirements, noting the number of items within each reporting area and their frequencies. Further detail is then provided on each of the reporting areas in the remainder of this section.
24.9 Consistent with Condition 24.11, where Regular Reporting is required and the date of submission has not been defined in the Fourth Licence, the reporting dates will be agreed between us and the Licensee, and documented in the Regulatory Handbook.
Table 2.1: Overview of reporting requirements - Compliance and good governance
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Performance standards report | Quarterly | Table 3 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Organisation Chart | Biannual | Table 4 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Assurance Statement | Annual | Table 5 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Audited accounts and Annual Report | Annual | Table 6 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Internal Audit Plan | Annual | Table 7 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Ad Hoc Assurance Statement (Section 6 licensing) | Ad Hoc | Table 8 |
| Compliance and good governance | 1 Quarterly report 1 Biannual report 3 Annual reports 13 Ad hoc requirements |
Notification requirements | Ad Hoc | Table 9 |
Table 2.2: Overview of reporting requirements - Protecting Participants’ interests
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Protecting Participants’ interests | 1 Monthly report 2 Quarterly reports |
Prize payments | Monthly | Table 10 |
| Protecting Participants’ interests | 1 Monthly report 2 Quarterly reports |
Participant behaviour and protection | Quarterly | Table 11 |
| Protecting Participants’ interests | 1 Monthly report 2 Quarterly reports |
Enquiries and complaints | Quarterly | Table 12 |
Table 2.3: Overview of reporting requirements - Access and distribution
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Access and distribution | 1 Monthly report 1 Annual report 2 Ad hoc requirements |
Availability | Monthly | Table 13 |
| Access and distribution | 1 Monthly report 1 Annual report 2 Ad hoc requirements |
Sales Outlets | Annual | Table 14 |
| Access and distribution | 1 Monthly report 1 Annual report 2 Ad hoc requirements |
Ad Hoc Assurance Statement (Distribution) | Ad Hoc | Table 15 |
| Access and distribution | 1 Monthly report 1 Annual report 2 Ad hoc requirements |
Notification requirements | Ad Hoc | Table 16 |
Table 2.4: Overview of reporting requirements - Branding and National Lottery IP
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Branding and National Lottery IP | 1 Quarterly report 2 Ad hoc requirements |
Brand KPIs | Quarterly | Table 17 |
| Branding and National Lottery IP | 1 Quarterly report 2 Ad hoc requirements |
Notification requirements | Ad Hoc | Table 18 |
Table 2.5: Overview of reporting requirements - Good Causes Contribution
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Sales and Good Causes Contribution | Weekly | Table 19 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Other NLDF components | Weekly | Table 20 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Revised Estimated Annual Payment and Weekly Payment Schedule | Monthly (at least) | Table 21 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Good Causes Contribution Forecasts | Quarterly | Table 22 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Cost expenditure | Quarterly | Table 23 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Ancillary Activities | Annual | Table 24 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Estimated Annual Payment and Weekly Payment Schedule | Annual | Table 25 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Reconciliation Certificate | Annual | Table 26 |
| Good Causes Contribution | 1 Weekly report 2 Monthly reports 1 Quarterly report 1 Biannual report 4 Annual reports |
Related Party Arrangements | Annual | Table 27 |
Table 2.6: Overview of reporting requirements - Financial and operational resilience
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Weekly Trust Report | Weekly | Table 28a |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Monthly Trust and Participant Funds Report | Monthly | Table 28b |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Monthly Trust Income Report | Monthly | Table 28c |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Trust Compliance Certificate | Annual (at least) | Table 28d |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Audit Certificate | Monthly | Table 29 |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Financial Covenants | Quarterly | Table 30 |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Resilience Assurance Statement | Annual | Table 31 |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Ad hoc assurance and reporting in relation to Protecting Participant Funds | Ad hoc | Table 32 |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Unqualified Resilience Assurance Statement related to Significant Business Events | Ad hoc | Table 33 |
| Financial and operational resilience | 1 Weekly report 1 Quarterly report 1 Annual report 3 Ad hoc requirements |
Notification requirements | Ad hoc | Table 34 |
Table 2.7: Overview of reporting requirements - Exit
| Area | Overview | Requirements | Frequency | Location |
|---|---|---|---|---|
| Exit | 1 Annual report | Exit Plan | Annual | Table 35 |
Compliance and good governance
24.10 This reporting area consists of the following:
- performance standards report (required quarterly)
- organisation chart (required biannually)
- annual assurance statement (required annually)
- audited accounts and annual report (required annually)
- internal audit plan (required annually)
- ad hoc assurance statement (Section 6 licensing), and
- ad hoc notification requirements.
Table 3: Performance standards report
Overview
Report area: Performance standards report
Frequency: Quarterly
Purpose: A set of overarching operational performance metrics will be monitored through this report, which will be complemented by the other reporting requirement on specific areas set out in the rest of this section.
This reflects Condition 24.9, which states that the Regulatory Handbook “may include certain standards or targets for performance which the Commission will consider when monitoring the Licensee’s compliance with this Licence”.
Expected contents
We expect that performance standards should establish a baseline of performance, that can be monitored over time, covering a range of measures that captures process (that is, leading indicators) and outcomes (that is, lagging indicators).
We require the data in this report to be relevant to the Licensee's obligations, and representative of conditions across different operational areas. We expect the data will allow us to sufficiently understand patterns and trends over time. We also expect the report contents are within context of other complementary and supporting information, submitted by the Licensee through other assurance and reporting requirements.
Where separate reports are used to demonstrate specific Licence Condition performance these shall be mapped in the same manner as the performance measures, against each related condition.
We expect that the relevant performance standards may reasonably evolve over the Fourth Licence. For example, the appropriate performance management regime may vary because of changes in circumstances, such as industry or regulatory trends, or new performance criteria might be introduced where we have concerns about the Licensee's risk management for delivering outcomes.
Table 4: Overview of Organisation Chart
Overview
Report area: Organisation Chart
Frequency: Biannual
Purpose: Condition 6.15 sets requirements related to the provision of information regarding Lottery Beneficiaries and Lottery Supervisors, within which the requirement for the Licensee to provide an organisation chart is intended to allow us to maintain clear oversight of the ownership and management of the Licensee.
Expected contents
An Organisation Chart and any supporting information to set out accurately the legal and beneficial ownership, the organisation and management of the Licensee.
Table 5: Overview of Assurance Statement
Overview
Report area: Assurance Statement
Frequency: Annual
Purpose: For the Licensee to provide assurance in relation to compliance with the Fourth Licence, as discussed in section 22.
Expected contents
See section 22 (assurance requirements).
Table 6: Overview of Audited accounts and Annual Report
Overview
Report area: Audited accounts and Annual Report
Frequency: Annual
Purpose: Annual Reports and financial accounts are a key element of the compliance process. As part of this annual cycle we also expect to be informed of any material irregularities identified by external auditors.
Expected contents
The audited annual accounts and Annual Report issued by the Licensee in compliance with Condition 22.15, as well as any other relevant obligations including under Companies Act 2006 and in conformity with International Financial Reporting Standards.
In order to comply with Best Practice, the Licensee may have regard to relevant guidance about the content of annual reports22.
The Annual Report will be expected to cover a range of financial and non-financial matters, including reporting of Licensee performance in areas such as sustainability, diversity, ethics, values, workforce management, corporate social responsibility and environmental matters. This will also be expected to include details of ESG (Environmental, Social and Governance) criteria applied as part of the treasury policy.
Any report from the external auditors (including such reports as may not be made public), concerning any incidents of fraud, irregularities or failure to adhere to procedures of financial control.
Table 7: Overview of Internal Audit Plan
Overview
Report area: Internal Audit Plan
Frequency: Annual
Purpose: Conditions 22.8 and 22.9 set requirements related to internal audit. While the emphasis is on the Licensee to determine how best to comply with Condition 22.8, we require visibility over the Licensee’s Internal Audit Plan, as per Condition 22.9, in order to be aware of the proposed scope and focus of activities and, where necessary, verify that this includes any risks or concerns raised by us.
Expected contents
Full details of the proposed scope and timing of internal audit work that is planned for the upcoming year by the relevant committee. The Licensee should also notify us subsequently if there are material changes to these plans during the Licence Year (see Table 9).
Note that generally we do not require the Licensee to provide individual internal audit reports or recommendations. However, we may specifically request these under Condition 23.12, and, in any event, may require notification of internal audit findings, for example significant or material failings, as part of exception reporting (see Table 9 below and Condition 24).
Table 8: Overview of Ad Hoc Assurance Statement (Section 6 licensing)
Overview
Report area: Ad Hoc Assurance Statement (Section 6 licensing)
Frequency: Ad Hoc
Purpose: Under Section 6 of the Act, we issue Licences to authorise the promotion of different National Lottery Games. As part of Section 6 Licence applications, the Licensee is required to provide a Board Assurance Statement. Guidance on the Section 6 licensing process, including the role of the Board Assurance Statement is provided separately to the Licensee.
Expected contents
Set out separately in guidance to the Licensee regarding the Section 6 licensing process.
Table 9: Overview of notification requirements
Overview
Report area: Compliance and good governance notification requirements
Frequency: Ad hoc
Purpose: Below we summarise, for reference, conditions within the Fourth Licence which require the Licensee to provide notifications or specific information to us on an ad hoc basis, in various areas related to compliance and governance. For further information, please refer to the relevant Licence conditions
Expected contents
- Condition 5: requirements to notify us in relation to Designated Lottery Subcontracts or Related Party Arrangements;
- Condition 6: requirements to notify us in certain circumstances in relation to Fitness and Propriety of the Licensee, Lottery Beneficiaries and Lottery Supervisors;
- Condition 7: requirements to notify us in certain circumstances in relation to Fitness and Propriety of Critical Function Employees;
- Condition 14: requirements to notify us in relation to changes in Ancillary Activities;
- Condition 17: requirement to notify us in relation to issues affecting the Technology Operation;
- Condition 21: requirements to notify us in relation to changes to Key Subcontractors;
- Condition 22: requirement to notify us of any provisions in the UK Corporate Governance Code which the Licensee considers it does not require to implement; and requirement to notify us if there is a material change to the Licensee’s Internal Audit Plan during the Licence Year;
- Condition 24: requirements to report Licence breaches and certain irregularities, incidents, changes, disclosures or investigations23;
- Condition 25: requirement to notify us at certain points in relation to Independent Performance Reviews;
- Condition 29: requirements to notify us in relation to disclosure and treatment of Confidential Information; and
- Condition 31: requirement to provide us reasonable advance notice before any change in Licensee address.
References
20 Reporting requirements that are dependent on the Incoming Licensee’s Application – for example, the performance standards report and the Participant behaviour and protection report – will be fully developed and updated in this Regulatory Handbook during Implementation prior to the start of the Fourth Licence.
21 Note that Conditions 4 and 22 are directly related to compliance and good governance respectively, but under this category we also include requirements related to compliance and governance that are linked to other conditions, as set out in the relevant tables below.
22 For example, guidance published by the Institute of Chartered Secretaries and Administrators.
23. Assurance requirements Next section
24. Regulatory reporting requirements (section 2)
Last updated: 1 February 2024
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