Friday, 27 February 2015

UK: The Insolvency Practitioners (Amendment) Regulations 2015

The Insolvency Practitioners (Amendment) Regulations 2015 were laid before Parliament today and come into force on 1 October 2015: see here or here (pdf).  One of the changes being introduced by the Regulations concerns the records that insolvency practitioners are required to maintain. A new record keeping obligation will be introduced and this will require insolvency practitioners to keep records sufficient to show and explain the administration of each case and any decisions taken which materially affect that case.  Further information is available in the explanatory memorandum accompanying the Regulations: see here (pdf).

UK: 'Goodbye ambiguity, hello clarity - the Bank of England’s relationship with financial markets'

Dr Minouche Shafik, the Deputy Governor for Markets and Banking at the Bank of England, delivered a speech yesterday titled Goodbye ambiguity, hello clarity: the Bank of England’s relationship with financial markets: see here (pdf). Early on in her speech she identified her recurring theme: "... the days when 'constructive ambiguity' was seen as a helpful foil for central bankers are behind us. In today's complex and globalised financial system, Governors' eyebrows and fireside chats are no match for a clearly communicated framework in which information will be gathered and decisions made".

Europe: ESMA peer review report - MiFID and best execution

The European Securities and Markets Authority has published a peer review report regarding best execution under MiFID: see here (pdf). The accompanying press release is available here (pdf). The review found that the level of implementation of best execution provisions by authorities was "relatively low".

Thursday, 26 February 2015

Australia: ASIC consults on updated collective action guidance for institutional investors

The Australian Securities and Investments Commission is consulting on the guidance it provides in respect of collective action by institutional investors: see here. A copy of the consultation paper is available here (pdf). The proposed amendments will, amongst other things, provide updated guidance on how the takeovers and substantial holding notice provisions apply to collective action by investors.

Wednesday, 25 February 2015

UK: The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2015

The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2015 was made earlier this week and comes into force on 1 April 2015: see here (pdf). The purpose of the Order is to bring within the regulatory regime seven benchmarks, including the Sterling Overnight Index Average (SONIA) and Repurchase Overnight Index Average (RONIA). An explanatory memorandum is available here (pdf) and an impact assessment here (pdf).

Tuesday, 24 February 2015

Europe: ESMA publishes revised work programme for 2015

The European Securities and Markets Authority has published a revised work programme for 2015: see here (pdf). With regard to corporate governance, it is noted that ESMA will in the fourth quarter of 2015 undertake a review of the published best practice principles for proxy advisors.

Monday, 23 February 2015

UK: The Senior Managers Regime and non-executive directors

The Prudential Regulation Authority and Financial Conduct Authority have today published a consultation paper in which they explain that the following non-executive directors will be subject to approval and inclusion in the new Senior Managers Regime: chairman; chair of the risk committee; chair of the audit committee; chair of the remuneration committee; chair of the nomination committee; and the senior independent director.

The consultation paper - titled Approach to non-executive directors in banking and Solvency II firms & Application of the presumption of responsibility to Senior Managers in banking firms - is available here (pdf). Further information is available in the accompanying press release: see here.

Friday, 20 February 2015

UK: FCA announces market study into investment and corporate banking

The Financial Conduct Authority has announced that it will undertake its first wholesale market study into investment and corporate banking: see here. This follows work undertaken by the FCA, and feedback it has received, suggesting that competition is not working effectively: see here (pdf).

Thursday, 19 February 2015

UK: FRC consults on amendments to UK and Irish GAAP

The Financial Reporting Council is consulting on proposed amendments to UK and Irish GAAP: see here. The proposed amendments include withdrawal of the Financial Reporting Standard for Smaller Entities (FRSSE) for accounting period beginning on or after 1 January 2016 and a new accounting standard for micro-entities.

Wednesday, 18 February 2015

Europe: capital markets union - green paper and related consultations

The European Commission today published a green paper seeking ideas on how to create a "true single market for capital". Accompanying the green paper are two related consultations, one on the operation of the Prospectus Directive and the other on the securitisation framework. The green paper contains a short section on company law and corporate governance. In this section, the current revision of the Shareholder Rights Directive is mentioned; it is also stated that further reforms to company law may be helpful to help overcome barriers to cross-border establishment and operation.

For further information see: Commission press release | Green paper (pdf) | Prospective Directive review | Securitisation review | Capital Markets Union website.

Tuesday, 17 February 2015

Europe: ESMA annual report - credit rating agencies and trade repositories

The European Securities and Markets Authority has published an annual report concerning its direct supervisory activities in 2014 regarding credit rating agencies and trade repositories: see here (pdf). The report also identifies ESMA's plans regarding credit rating agencies and trade repositories for 2015.

Monday, 16 February 2015

OECD corporate governance working paper published - corporate bonds, bondholders and corporate governance

The sixteenth paper in the OECD Corporate Governance Working Paper series, titled Corporate Bonds, Bondholders and Corporate Governance, has been published: see here (pdf). The authors suggest, through building a 'covenant protection index', that bond investors have, overall, traded governance rights for higher expected returns. Earlier papers in the series are available here.

UK: Bank of England Financial Stability Paper No 32 - estimating the extent of the 'too big to fail' problem

The latest paper (number 32) in the Bank of England's financial stability series, titled Estimating the extent of the ‘too big to fail’ problem - a review of existing approaches, has been published: see here (pdf).

Friday, 13 February 2015

UK: The Companies (Cross-Border Mergers) (Amendment) Regulations 2015

The Companies (Cross-Border Mergers) (Amendment) Regulations 2015 were laid before Parliament yesterday and come into force on 6 April 2015: see here or here (pdf). The Regulations seek to clarify the UK's implementation of Article 17 of the Cross-Border Mergers Directive 2005/56/EC by amending article 16(3) of the Companies (Cross-Border Mergers) Regulations 2007 in order to make explicit that a merger may not be declared null and void when it has taken effect. Further information is available in the accompanying explanatory memorandum: see here (pdf).

Note: the operation of the Directive was the subject of a consultation by the European Commission that concluded last month: see here.

Thursday, 12 February 2015

Singapore: MAS consults on OTC derivatives framework and other changes to the SFA

The Monetary Authority of Singapore is consulting on its new framework for the regulation of OTC derivatives and also some other changes to the Securities and Futures Act: see, respectively, here and here.

Wednesday, 11 February 2015

OECD Principles of Corporate Governance - consultation responses published

Last year the OECD published for public comment a revised edition of its Principles of Corporate Governance: see here (pdf). The consultation period ended last month and the responses received by the OECD have been published: see here.

UK: Scotland: Law Commission sets out its ninth programme of law reform

The Scottish Law Commission has published its ninth programme of law reform, covering the period 2015 to 2017: see here. The programme continues work on four existing projects (moveable transactions; compulsory purchase; contract law in light of the Draft Common Frame of Reference; and heritable securities) and contains three new projects: defamation; proprietary aspects of leases; and aspects of the law of prescription.

Tuesday, 10 February 2015

USA: SEC consults on hedging disclosure rule

The Securities and Exchange Commission has proposed rules the purpose of which is to implement Section 955 of the Dodd-Frank Wall Street Reform and Consumer Protection Act: see here (pdf). The rules will require companies to disclose whether directors and employees are permitted to engage in hedging transactions in respect of equity securities granted as compensation or otherwise held (directly or indirectly).

Monday, 9 February 2015

UK: FTSE100 board diversity and nationality

The Financial Times reports that more than one in three FTSE100 chief executives are non-British nationals, and one in eight FTSE100 companies has an all British board: see here.

Friday, 6 February 2015

India: Monitoring compliance with section 135 of the Companies Act 2013

The Ministry of Corporate Affairs has established a committee the purpose of which is to make recommendations for improving the monitoring of companies' compliance with section 135 ("Corporate Social Responsibility") of the Companies Act 2013: see here (pdf).

Russia: Financial Stability Board publishes peer review report

The Financial Stability Board has published its peer review of Russia: see here (pdf). The review considered the macroprudential policy framework (and tools) as well as the framework for the resolution of banks. The report recommends, amongst other things, that the mandate of the newly formed National Council on Ensuring Financial Stability is clarified; a wider range of resolution tools is also recommended.

UK: FCA final rules - independent governance committees and workplace personal pension schemes

The Financial Conduct Authority has published final rules in respect of the independent governance committees that providers of workplace personal pension schemes will be required to establish: see here (pdf).

Thursday, 5 February 2015

UK: EU Committee report on the post-crisis EU financial regulatory framework

The House of Lords European Union Committee has published its report The post-crisis EU financial regulatory framework - do the pieces fit?: see here or here (pdf). The report notes that the reformed framework contains weaknesses but that this should not detract from the significant achievement that its creation represents. The report contains various recommendations including, for example, enhancing the powers of the European Supervisory Authorities.

Update: The word "its" now appears correctly; the superfluous, and unfortunate, extra letter 't' has been removed. Note to self: more thorough proof reading.

Wednesday, 4 February 2015

Europe: CJEU rejects Commission's argument regarding UK's group loss relief rules

In 2012, the European Commission referred the United Kingdom to the Court of Justice of the European Union because it believed that the UK had failed to properly implement the court's decision in the Marks and Spencer case (C-446/03): see here. Whilst the UK had made to changes to its regime for group loss relief, the Commission argued that the principle of freedom of establishment was still infringed. Yesterday the court gave its decision and rejected the Commission's arguments: see Commission v United Kingdom (C-172/13), a press summary of which is available here (pdf).

UK: Board diversity - women on FTSE100 boards

The Department for Business, Innovation and Skills has today published a list of the ten most improved FTSE100 boards (between 2010 and October 2014) with regard to the proportion of female directors: see here. The Secretary of State for Business, Innovation and Skills, Rt Hon Dr Vince Cable MP, commented: "Seeing the enormous progress made by these 10 top FTSE 100 companies demonstrates that the UK’s voluntary, business-led approach is working. Our target of 25% women on boards by 2015 is in sight. However, the threat of EU mandatory targets remains a reality if we do not meet it".

Tuesday, 3 February 2015

UK: FCA review of crowdfunding

The Financial Conduct Authority has published the results of a review of the regulatory regime for crowdfunding and the promotion of non-readily realisable securities by other media: see here (pdf). The FCA states that, at present, it sees no need to change its regulatory approach (either to strength consumer protection or to relax the requirements that apply to firms).

Monday, 2 February 2015

Ireland: Companies Act 2014 - copy published on the Irish Statute Book website

A copy of the Companies Act 2014, which became law last December, has been published on the Irish Statute Book website: see here (pdf). Information about the Act, which is expected to be brought into force in June this year, is available on the Companies Registration Office website.

Friday, 30 January 2015

UK: Accountants, misconduct and the public interest

In 2013 a Disciplinary Tribunal of the Financial Reporting Council held that various allegations of misconduct has been proved against Deloitte & Touche and one of the firm's partners: see here. The Tribunal's decision, according to the FRC, provided "a strong and clear message to all members of the accountancy profession about their responsibility to act in the public interest and comply with their code of ethics".

An appeal was made and the outcome published today: see here. A copy of the Appeal Tribunal's decision is available here (pdf). The Appeal Tribunal upheld some, but not all, of the findings of misconduct. The Tribunal endorsed various parts of the ICAEW's Guide to Professional Ethics and also discussed what the Guide said about the public interest and its relevance in deciding whether to accept (or continue) an appointment. The difficulties applying the public interest requirements contained in the Guide were noted by the Tribunal and it held that these requirements alone could not form the basis of a charge of misconduct against an accountant. The FRC has said, in a short announcement, that it will work with the accountancy profession to address the lack of clarity regarding the public interest requirements.

Thursday, 29 January 2015

Europe: ECB - recommendation on dividend distribution policy | variable remuneration review

The European Central Bank, in its banking supervisory role, has published a recommendation to banks in respect of their dividend distribution policy: see here (pdf). Banks adopting divided policies that do not follow the ECB's recommendation are required to explain why. The ECB has also announced that it is undertaking a review of variable remuneration: see here.

Canada: Securities Administrators provide update on their review of proxy voting infrastructure

The Canadian Securities Administrators have published a progress report in respect of their review of the proxy voting infrastructure: see here (pdf). According to the report, the current proxy voting infrastructure is antiquated and fragmented and needs to be improved. Various improvements are identified and the report recommends that all entities playing a role in vote reconciliation should assess their meeting vote reconciliation processes to identify and implement any immediate steps to improve the accuracy and reliability of vote reconciliation.

Wednesday, 28 January 2015

UK: The Financial Services and Markets Act 2000 (Regulation of Auditors and Actuaries) (PRA Specified Powers) Order 2015

The Financial Services and Markets Act 2000 (Regulation of Auditors and Actuaries) (PRA Specified Powers) Order 2015 was laid before Parliament yesterday and will come into force on 20 February 2015: see here or here (pdf).

The purpose of the Order is to bring into force provisions which permit the Prudential Regulation Authority, amongst other things, to disqualify an auditor or actuary from acting as such for any PRA-authorised person or particular class of PRA-authorised person. This power, contained in section 345A of the Financial Services and Markets Act 2000 (and inserted under Schedule 13 of the Financial Services Act 2012), required an Order by the Treasury to be brought into force. An explanatory memorandum is available here (pdf).

Tuesday, 27 January 2015

Denmark: Revised edition of the Recommendations on Corporate Governance

The codes and principles directory maintained by the European Corporate Governance Institute was updated yesterday with a revised copy of the Recommendations on Corporate Governance published by the Danish Committee on Corporate Governance: see here. The introduction to the Recommendations has been amended to take into account the European Commission recommendation on the quality of corporate governance reporting (2014/208/EU).

Note: The ECGI's link to the English version of the revised Recommendations is not currently working; a direct link, from the Governance Committee's website, is available here (pdf).

UK: England and Wales: Registrar of Companies owed common law duty of care

Judgment was given yesterday in Sebry v Companies House [2015] EWHC 115 (QB). The trial judge held that the Registrar of Companies owed a common law duty of care when entering a winding up order on the Register to take reasonable care to ensure that the order was not registered against the wrong company. This duty was owed to any company that was not in liquidation but which was wrongly recorded on the Register as having been wound up by order of the court. The duty required the Registrar to take reasonable care to enter the order on the record of the company named in the order and not any other company. It did not extend to checking information supplied by third parties: it extended only to entering information accurately on the Register.

Monday, 26 January 2015

UK: Implementation of the Mortgage Credit Directive

HM Treasury has published a summary of responses in respect of its consultation on the implementation of the Mortgage Credit Directive (Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property): see here (pdf). Accompanying the publication is a copy of the Mortgage Credit Directive Order 2015 that will shortly be laid before Parliament: see here (pdf).

Friday, 23 January 2015

New Zealand: FMA Handbook - Corporate Governance in New Zealand, Principles and Guidelines

Following a consultation last year, the Financial Markets Authority has published a new edition of its handbook Corporate Governance in New Zealand - Principles and Guidelines: see here (pdf). The handbook was first published in 2004 by the Securities Commission (now replaced by the FMA) and is a reference guide to help directors and their advisers decide how best to apply the nine key corporate governance principles.

UK: JCPC considers claim for rectification of share register

The Judicial Committee of the Privy Council gave its opinion earlier this week in Nilon Limited v Royal Westminster Investments S.A. [2015] UKPC 2 (an appeal from the Court of Appeal of the British Virgin Islands). The case concerned a claim for an order for rectification of Nilon’s register of members under section 43(1)(a) of the BVI Business Companies Act 2004 (the equivalent of section 125 of the Companies Act 2006).

At issue was whether proceedings for rectification of the register were permitted only if the register was presently inaccurate or whether the proceedings could be used to determine if a party was in breach of contract by failing to procure a company to issue shares. It was the former (according to Lord Collins, delivering the opinion of the Board): proceedings could only be brought where the applicant had a right to registration by virtue of a valid transfer of legal title. It was not enough to have a prospective claim against the company, dependent on the conversion of an equitable right to a legal title by an order for specific performance of a contract. In reaching this view, Lord Collins held that the English decision Re Hoicrest Ltd [2000] 1 WLR 414 was wrong as a matter of principle (however sensible it may have been as a matter of case management).

Thursday, 22 January 2015

UK: The Corporation Tax (Northern Ireland) Bill 2014-15

The Corporation Tax (Northern Ireland) Bill 2014-15 was introduced in Parliament earlier this month and received its First reading: see here. A copy of the Bill, as introduced, is available here (pdf) and explanatory notes are available here (pdf). The purpose of the Bill is to give the Northern Ireland Assembly the power to set the main rate of corporation tax for certain trading profits (to be known as the 'Northern Ireland rate').

Wednesday, 21 January 2015

Europe: the gender diversity of listed company boards

The European Commission has published research regarding the proportion of board positions occupied by women in the largest EU listed companies: see here (pdf). The research found that, on average, 20.2% of board members were women.

Tuesday, 20 January 2015

UK: Supreme Court to hear appeal in collective investment scheme case

In Financial Services Authority v Asset L I Inc (t/a Asset Land Investment Inc) [2013] EWHC 178 (Ch)[2013] WLR (D) 54 the trial judge held that certain sales of land were collective investment schemes as defined by section 235 of the Financial Services and Markets Act 2000. This finding was challenged before the Court of Appeal last year but rejected (see [2014] EWCA Civ 435). Several days ago the Supreme Court announced that it would hear an appeal from the Court of Appeal's decision: see here (pdf).

Monday, 19 January 2015

UK: Small Business, Enterprise and Employment Bill - Parts 7 and 8 - provisional implementation plan

The Department for Business, Innovation and Skills has published a provisional implementation plan for Part 7 ("Companies: transparency") and Part 8 ("Company Filing Requirements") of the Small Business, Enterprise and Employment Bill: see here (pdf). This explains, amongst other things, that the prohibition (with exceptions) on corporate directors will come into force in October 2015 and that companies will no longer be able to issue bearer shares two months after the Bill has received Royal assent. The Bill is currently before the House of Lords and its Committee stage will resume today.