Monday, 20 October 2014

Germany: amended corporate governance code - copy in English available

A copy, in English, of the amended corporate governance code published earlier this year by the Government Commission on the German Corporate Governance Code is now available: see here or here (pdf). A copy of the Code, with the amendments highlighted, is available here (pdf).

Norway: NUES outlines changes to be made to the Norwegian Corporate Governance Code

Earlier this year the Norwegian Corporate Governance Board (NUES) published the changes it proposes to make to the Norwegian Corporate Governance Code: see here (pdf). The revised Code should be published soon.

Friday, 17 October 2014

UK: The CEO of the PRA comments on bonuses and governance

Andrew Bailey, a Deputy Governor of the Bank of England and the Chief Executive Officer of the Prudential Regulation Authority, delivered a speech yesterday in which he referred to several areas of current controversy: bonus policy (in the light of the EBA's recent report on the payment of allowances and their use to circumvent the bonus cap) and individual accountability (against the background of the PRA consultation on the new senior managers regime).

With regard to bonuses, and incentives more generally, Mr Bailey observed "... the bonus cap is the wrong policy, the debate around it is misguided, and the best thing I can say about allowances is that they are a response to a bad policy". With regard to governance, and the new regime, he stated: "... is it really unreasonable to expect the most senior figures to assume responsibility? Not in my view, and in my experience not in the view of those who take on these roles".

FSB key attributes of effective resolution regimes for financial institutions

The Financial Stability Board has published an updated edition of its guidance The Key Attributes of Effective Resolution Regimes for Financial Institutions: see here (pdf). These attributes represent what the FSB believes to be the core elements of an effective resolution regime.

Thursday, 16 October 2014

Europe: EBA reports - banks, remuneration and allowances

The European Banking Authority has published the results of its investigation into discretionary remuneration practices within the EU banking sector, focusing in particular on the use of role based allowances: see here (pdf). The use of such allowances, which some banks have classified as fixed remuneration, is controversial because it has provided one way to sidestep the bonus cap within the Capital Requirements Directive 2013/36/EU.

The EBA states in its report that role based allowances that are discretionary, not predetermined, not transparent to staff or not permanent, should be regarded as variable remuneration and not fixed remuneration. In light of this finding, the EBA has issued an Opinion to the European Commission, and to the EU competent authorities, calling for supervisors to ensure that banks' remuneration practices on allowances comply with the EU Law: see here (pdf).

Wednesday, 15 October 2014

Ireland: incorporation and tax residency - a mandatory or default rule?

It was budget day yesterday in Ireland and the Government provided an update in respect of its corporate tax policy. This included publication of A Road Map for Ireland's Tax Competitiveness: see here (pdf). Media attention has focused on the demise of so-called 'Double Irish' arrangements which take advantage of the possibility of incorporating a company in Ireland that is not resident there for tax purposes: see, for example, here and here. In his budget speech, the Minister for Finance stated that the ability of companies to use the 'Double Irish' would be removed by changing the tax residency rules to require all companies registered in Ireland to be resident in Ireland for tax purposes. This suggests a mandatory rule: incorporation in Ireland will result in residency in Ireland.

It is interesting to note, however, that the Road Map document says that a default rule will be introduced under which all companies incorporated in Ireland will be treated as resident in Ireland for tax purposes. If the term 'default rule' is taken to mean a rule that will apply unless some contrary action or agreement is taken, then this would suggest the possibility for incorporation in Ireland not to be accompanied by residency in Ireland for tax purposes. The publication of the Finance Act 2014, in which the new residency rule will be introduced, should help to clarify this point.

Tuesday, 14 October 2014

Basel Committee consults on corporate governance principles for banks

The Basel Committee on Banking Supervision has published for consultation Corporate Governance Principles for Banks: see here (pdf). The principles build on the Committee's 2010 document Principles for enhancing corporate governance.

UK: slavery, supply chains and disclosure - Government proposals

The Government has announced, in a press release published yesterday, that "Big businesses will have to publicly state each year what action they have taken to ensure their supply chains are slavery free". The press release, available here, explains that this disclosure requirement will be included in a Bill - the Modern Slavery Bill - that is currently before Parliament. A consultation will take place to decide which businesses will be subject to this new obligation.

UK: FTSE100 directors' earnings increase by 21% in a year - IDS report

Income Data Services report that the earnings of FTSE100 directors have increased by 21% in the past year: see here (pdf).

Monday, 13 October 2014

Italy: new edition of the corporate governance code published

Earlier this year the Italian Corporate Governance Committee published a revised edition of its corporate governance code: see here (pdf). A copy of the code, with the amendments highlighted, is available here (pdf).

Friday, 10 October 2014

Denmark: Recommendations on Corporate Governance

The codes and principles directory maintained by the European Corporate Governance Institute was updated today with a copy of the 2014 Recommendations on Corporate Governance published by the Danish Committee on Corporate Governance: see here.

Ireland: ISE statement on UK Corporate Governance Code and Irish Corporate Governance Annex

The Irish Stock Exchange has announced, following the publication of a revised edition of the UK Corporate Governance Code, that no changes will be made to the Irish Corporate Governance Annex [pdf] which, along with the UK Corporate Governance Code, will continue to apply to Irish incorporated companies with a primary listing on the Main Securities Market: see here.

Thursday, 9 October 2014

UK: women on boards - latest monitoring report published

The Department for Business, Innovation and Skills has published the latest edition of its monitoring report in respect of women on FTSE350 boards: see here (pdf). This reports that women now account for 22.8% of board directorships in FTSE100 companies.

NB. European data on board diversity has recently been published by Egon Zehnder: see here.

Wednesday, 8 October 2014

Ireland: Central Bank consults on new macro-prudential measures

The Central Bank has published a consultation paper in which it sets out proposals to introduce new macro-prudential measures, including placing restrictions on the loan to value and loan to income ratios that lenders can apply when lending for house purchases: here (pdf).

Tuesday, 7 October 2014

UK: SFO secures first conviction for LIBOR manipulation

The Serious Fraud Office has secured its first criminal conviction as part of its investigation into the manipulation of LIBOR: see here.

Monday, 6 October 2014

UK: Bank of England consultations (including the governance of ring-fenced bodies)

The Bank of England has today published several consultation papers that set out proposed changes designed to improve the resilience and resolvability of deposit-takers and reduce the disruption to customers and the system if a deposit-taker or insurer fails: see here. A consultation paper has also been published in respect of the implementation of bank ring-fencing and this focuses on legal structure, governance and the continuity of services and facilities: see here (pdf). The governance part of this paper considers, amongst other things, the proposed requirements for the composition and structure of the board of ring-fenced bodies.

Friday, 3 October 2014

UK: FPC seeks additional powers of direction in respect of residential lending

The Financial Policy Committee is seeking additional powers which would enable it to direct the Prudential Regulation Authority and Financial Conduct Authority to place limits on residential mortgage lending by regulated lenders, with reference to loan to value ratios and debit to income ratios. Further information is available in a statement published by the FPC setting out the rationale for seeking this new power: see here (pdf).

Thursday, 2 October 2014

Ireland: Companies Bill 2012 completes report and final stages in the Seanad Éireann

The introduction of Ireland's new company law framework has moved one step closer. The Companies Bill 2012 has now completed its report and final stages in the Seanad Éireann: see here. The Bill's progress can be followed here.

Wednesday, 1 October 2014

France: AMF report on corporate governance and executive compensation

AMF has published its 2014 report on corporate governance and executive compensation: see here. The report is based on an analysis of the disclosures made by 60 listed companies in respect of the AFEP-MEDEF corporate governance code published in June 2013.

Europe: obligation to publish prospectus did not apply to enforced sale of securities

The Court of Justice gave its opinion last month in Almer Beheer BV, Daedalus Holding BV v Van den Dungen Vastgoed BV, Oosterhout II BVBA (Case C‑441/12). The court held, to quote directly from its opinion, that: "Article 3(1) of Directive 2003/71/EC ... on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC, as amended by Directive 2008/11/EC ..., must be interpreted as meaning that the obligation to publish a prospectus prior to any offer of securities to the public is not applicable to an enforced sale of securities, such as that at issue in the main proceedings".

Tuesday, 30 September 2014

Singapore: strengthening the listing and enforcement regimes - SGX consultation

The Singapore Exchange is seeking views on its proposals for the establishment of three new committees - the independent Listings Advisory, Listings Disciplinary and Listings Appeals Committees - as part of changes it is introducing to strengthen the listing and enforcement regime: see here (pdf).

Monday, 29 September 2014

Friday, 26 September 2014

UK: extending the regulation of financial benchmarks - consultation published

In June this year, the Government announced the formation of the Fair and Effective Markets Review. Yesterday, based on the review's first set of recommendations (available here, pdf), the Government launched a consultation on proposals to extend the regulatory regime recently introduced for LIBOR to other financial benchmarks: see here. Included with the consultation is a draft statutory instrument - The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. X) Order 2014 - a copy of which is available here (pdf).

UK: statutory audit services market - CMA publishes final Order - mandatory tendering of the statutory audit engagement

The Competition and Markets Authority has published, following consultation, the final Order that will implement the recommendations made by the Competition Commission (one of the bodies the CMA has replaced) in respect of the market for statutory audit services. A copy of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 is available here (pdf). An explanatory note is available here (pdf).

The Order comes into force on 1 January 2015 and applies in relation to financial years beginning on or after this date. The Order requires, amongst other things, FTSE 350 companies to put the statutory audit services engagement out to tender every ten years or earlier. It also sets out the audit committee's responsibilities in this regard and also in respect of other areas including, for example, the influence exerted over the appointment of the audit engagement partner.

Thursday, 25 September 2014

OECD: Public enforcement and corporate governance in Asia

Earlier this year the fourteen Asian jurisdictions represented at the Asian-OECD Roundtable on Corporate Governance endorsed the publication of a Guide to Public Enforcement and Corporate Governance in Asia. A copy of this guide is now available: see here (pdf).

Wednesday, 24 September 2014

UK: Law Commission recommendations on social investment by charities

The Law Commission for England and Wales has published recommendations, as part of its charity law project, in respect of social investment by charities: see here (pdf). A summary of the recommendations is available here (pdf). The Commission recommends, amongst other things, that a new statutory power should be created, conferring on charity trustees the power to make social investments (in doing so, the Commission's aim is to put the law beyond doubt).

Tuesday, 23 September 2014

USA: taxation - corporate inversion reforms published

The US Treasury has published reforms to reduce some of the tax advantages of so-called 'corporate inversions' (a transaction in which a US based multinational restructures so that its US parent is replaced by a foreign parent, in order to avoid taxes in the US). Further information is available here and here.

Monday, 22 September 2014

Singapore: Companies (Amendment) Bill introduced in Parliament

The Companies (Amendment) Bill was introduced in Parliament earlier this month. A date for the second reading has not yet been set. A copy of the Bill is available here (pdf) and further information is available here.

Friday, 19 September 2014

UK: The Community Interest Company (Amendment) Regulations 2014

The Community Interest Company (Amendment) Regulations 2014 were made on 14 September and come into force on 1 October: see here or here (pdf). Their purpose is to remove, for community interest companies, the share dividend cap (as contained in the Community Interest Company Regulations 2005). Further information is available in the explanatory memorandum available here (pdf).

Australia: rectification of a company's constitution

The Supreme Court of New South Wales (Court of Appeal) gave judgment a couple of days ago in Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd [2014] NSWCA 326. The decision is of interest for several reasons, including the court's discussion (and rejection) of the argument that it had jurisdiction to order rectification of a company's constitution.

Thursday, 18 September 2014

Isle of Man: a call to update insolvency law

The High Court gave judgment several days ago in Munin Navigation v Petrodel: see here. The court held that it had the discretion to grant retrospection sanction for a liquidator to employ lawyers; in doing so the trial judge (His Honour Deemster Gough) called for the updating of insolvency law on the Isle of Man (at para 63):
"I proffer a general comment on the archaic statutory provisions and rules which govern insolvency in the Isle of Man. These provisions are out of date, confusing and much in need of revision to accommodate the type of business the Island presently conducts and hopes to attract as it moves forward in the 21st century. It has been said before, and bears repeating, that all those who have to deal with insolvency and winding up of companies in the Isle of Man, not least the Courts, would benefit greatly from an up-to-date revision of the law in these areas, such that the Island can better cater for modern commercial practice."

Wednesday, 17 September 2014

UK: FRC publishes new edition of the UK Corporate Governance Code

The Financial Reporting Council has today published a new edition of the UK Corporate Governance Code: see here. A copy of the new Code is available here (pdf). A feedback statement, providing further background to the changes introduced in the new Code, is available here (pdf).

Tuesday, 16 September 2014

UK: The Financial Services (Banking Reform) Act 2013 (Commencement No. 6) Order 2014

The Financial Services (Banking Reform) Act 2013 (Commencement No. 6) Order 2014 was made on 12 September: see here. An explanatory note, setting out which provisions of the 2013 Act are brought into force by the Order, is available here.

UK: Takeover Panel proposes new framework for post-offer undertakings and intention statements

The Code Committee of the Takeover Panel has published a consultation paper in which it sets out proposed changes to the Takeover Code in order to create a new framework for post-offer undertakings and intention statements: see here (pdf).

Monday, 15 September 2014

India: governance norms - SEBI amendments to Clause 49 of the Equity Listing Agreement

The Securities and Exchange Board of India has published several amendments to Clause 49 of the Equity Listing Agreement (which sets out various corporate governance norms; a revised version was published earlier this year): see here (pdf). Amongst the amendments are those concerning the companies subject to Clause 49 as well as a delay in the provision requiring boards to have at least one female director.

Friday, 12 September 2014

Singapore: draft Companies (Amendment) Bill - update

The Ministry of Finance and Accounting and Corporate Regulatory Authority have completed their review of the feedback received during two rounds of consultation on the draft Companies (Amendment) Bill. A summary of the changes being made to the Bill following these consultations is available here (pdf). Summaries of the feedback received are available here, together with further background information.

Thursday, 11 September 2014

UK: statutory audit services market - comments on CMA's draft Order

Earlier this year the Competition and Markets Authority published a draft of the Order that will implement the recommendations made by the Competition Commission (one of the bodies the CMA has replaced) in respect of the market for statutory audit services: see here (pdf). The Order covers audit tendering and audit committee responsibilities. Responses received in respect of the draft Order have now been published: see here.

Wednesday, 10 September 2014

Europe: Junker Commissioners designate announced

The Junker Commissioners designate have been announced: see here. The UK's nominee, Lord Hill, has been invited to become the Commissioner for Financial Stability, Financial Services and Capital Markets Union. His mission letter is available here (pdf) and his specific areas of responsibility are outlined here. The unit responsible for corporate governance and social responsibility has become part of the remit of Věra Jourová, the Commissioner designate for Justice, Consumers and Gender Equality. There is no mention of corporate governance in her mission letter (available here, pdf).

Tuesday, 9 September 2014

Europe: Commission consultation on the Small Business Act

The European Commission is seeing views on the revisions that should be made to the Small Business Act: see here. In the accompanying questionnaire, views are sought on suggested proposals within several categories including reducing the administrative burden; access to finance; and promoting market access for SMEs.

Monday, 8 September 2014

Europe: Commission consultation on cross-border mergers and divisions

The European Commission has begun a consultation on the EU legal framework for cross-border mergers and divisions: see here. The Commission is collecting information in order to assess the functioning of the framework and any potential need for changes in the current rules.