Tuesday, 2 September 2014

UK: Scotland: section 1032 of the Companies Act 2006 and restoration to the register

The operation of section 1032 ("Effect of court order for restoration to the register") of the Companies Act 2006 was considered by Sheriff Principal Scott QC last month in ELB Securities Ltd v Alan Love and Prestwick Hotels Ltd. 2014 SCGLA 46. The Sheriff Principal held that the effect of section 1032 was that not all matters reverted to the status quo pre-dissolution; he stated (para. [29]):

"For section 1032(1) to be construed such that it gives rise to an unqualified reversion to the status quo, one would require to ignore or treat as pro non scripto the preceding sections 1021 and 1022 along with the provisions of the succeeding section 1034. In this regard the maxim generalibus specialia derogant must, in my view, apply".

Monday, 1 September 2014

UK: BIS and FRC consult on accounting framework changes

The Department for Business, Innovation and Skills has published a consultation paper in respect of the UK's implementation of chapters one to nine of the EU Accounting Directive 2013/34/EU: see here (pdf). The paper also seeks views on changes to the UK accounting regime in response to issues raised during the Company and Commercial Law Red Tape Challenge.

The Financial Reporting Council has also published a consultation paper, to accompany the BIS paper, concerning accounting standards for small entities: see here (pdf).

Friday, 29 August 2014

Hong Kong: HKEx concept paper on weighted voting rights

The Hong Kong Exchange has published a concept paper in which it seeks views on whether governance structures that give certain shareholders voting power, or other rights, disproportionate to their shareholding, should be permissible for listed companies or those seeking a listing: see here (pdf).

Thursday, 28 August 2014

India: SEBI review of continuous disclosure regime for listed companies

The Securities and Exchange Board of India has published for comment a revised version of Clause 36 - containing the core principles on the disclosure of price sensitive and material information by listed companies - that will be included in the Listing Agreement and/or draft SEBI (Listing Obligations and Disclosure Requirements) Regulations 2014: see here (pdf).

Wednesday, 27 August 2014

UK: FCA consultation on early implementation of the requirements for reports on payments to governments

The Financial Conduct Authority has published a consultation paper in which it sets out how it proposes to amend its Disclosure Rules and Transparency Rules in order to implement early the Transparency Directive Amendment Directive 2013/50/EU in respect of the obligation of issuers in the extractive industries to report annually on payments made to governments in the countries in which they operate: see here (pdf).

Tuesday, 26 August 2014

UK: Scotland: Law Commission trust law reform proposals published

The Scottish Law Commission published its Trust Law report today: see here. Major reforms are proposed, including placing the law within a single statute. A press release and impact assessment can be found here.

Monday, 25 August 2014

UK: Lib Dem manifesto proposals for executive pay

The Liberal Democrats have published proposals concerning executive pay that will be included in their 2015 election manifesto: see here. The detail is sparse, but more disclosure and employee consultation is promised.

Friday, 22 August 2014

UK: FRC proposes amendments to FRS102

The Financial Reporting Council has published an exposure draft - FRED55: Draft amendments to FRS102, pension obligations - the purpose of which is to clarify issues relating to accounting for defined benefit pension plans in advance of new UK and Irish GAAP becoming mandatory from 1 January 2015: see here (pdf).

Thursday, 21 August 2014

UK: Implementation of Chapter ten of the Accounting Directive 2013/34/EU - extractive industry reporting

The Department for Business, Innovation and Skills has published its response to the consultation it recently undertook in respect of the UK's implementation of Chapter ten ("Report on payments to governments") of the EU Accounting Directive 2013/34/EU: see here (pdf). A draft statutory instrument - the Reports on Payments to Governments Regulations 2014 - has also been published: see here (pdf).

It is the Government's intention that those undertakings subject to the Regulations will be required to report on payments made in financial years commencing on or after 1 January 2015. An undertaking is subject to the Regulations if it defined as large, or it is a public interest entity, and it is a mining or quarrying undertaking or a logging undertaking. The definition of undertaking includes limited companies and limited liability partnerships.

Tuesday, 19 August 2014

India: OECD report on related party transactions and minority shareholder protection

The OECD has published a report titled Improving Corporate Governance in India - Related Party Transactions and Minority Shareholder Protection: see here (pdf). The report refers to provisions in India's new company law framework - the Companies Act 2013 - but it does not include some recent changes, including those made by the Companies (Meetings of Board and its Powers) Second Amendment Rules 2014: see here (pdf).

Monday, 18 August 2014

UK: FTSE100 CEO pay is 143 times that of average employee

According to research published today by the High Pay Centre, the chief executives of FTSE100 companies are paid 143 times more than their average employee: see here.

Update (1 September 2014): The High Pay Centre has admitted errors in its calculations, and is now reporting a ratio of 130:1 and not 143:1. See here for further information. The reliability of the HPC data and calculations is such that The Guardian newspaper has removed from its website an article on the ratio: see here.

Friday, 15 August 2014

UK: Companies House annual report and accounts 2013/14

Companies House has published its annual report and accounts for 2013/14: see here. It is reported that 533,032 new incorporations took place during the year, bringing the number of companies on the register to 3.3 million (of which 7,821 are public limited companies).

Thursday, 14 August 2014

Singapore: MAS/SGX review of securities market structure and practices - proposals now confirmed

Earlier this year the Monetary Authority of Singapore and Singapore Exchange published a consultation paper titled Review of Securities Market Structure and Practices: see here (pdf). The consultation period closed in early May and, a few days ago, a joint response was published: see here (pdf). The response outlines the actions that will now be taken, including setting a minimum trading price for issuers listed on the SGX Mainboard and the introduction of a wider range of sanctions for breaches of listing rules.

Wednesday, 13 August 2014

New Zealand: Law Commission report on multiple defendants proposes capped liability scheme for auditors

Earlier this year the New Zealand Law Commission published its report Liability of Multiple Defendants: see here (pdf). The Commission has concluded that the system of joint and several liability is the preferred system and that it should remain the general rule. This said, the Commission has proposed some adjustments to the current regime, including the introduction of scheme whereby the liability of auditors and audit firms can be capped in respect of large or complex audits including the audits of listed companies.

Tuesday, 12 August 2014

UK: England and Wales: employment, bonuses and contractual discretion

Judgment was given last week in Brogden v Investec Bank Plc [2014] EWHC 2785 (Comm). The decision, which concerned unsuccessful claims for bonus payments, is noteworthy because of the discussion it contains regarding the manner in which contractual discretion should be exercised.

The trial judge, Mr Justice Leggatt, observed (at para. [100]): "Both on the authorities and as a matter of principle, it seems to me that where a contract gives responsibility to one party for making an assessment or exercising a judgement on a matter which materially affects the other party's interests and about which there is ample scope for reasonable differences of view, the decision is properly regarded as a discretion which is subject to the implied constraints that it must be taken in good faith, for proper purposes and not in an arbitrary, capricious or irrational manner".

Monday, 11 August 2014

UK: NHS Foundation Trust Governance Code - revised edition published

Monitor has published a revised edition of its NHS Foundation Trust Code of Governance: see here (pdf). The revised edition, dated July 2014, replaces the Code published in December 2013. A list of the changes is available here (pdf).

Friday, 8 August 2014

Europe: Review of the European System of Financial Supervision

The European Commission has published its review of the European System of Financial Supervision: see here. According to the review reports, the European Supervisory Authorities has performed well; further improvements are, however, identified for the short and medium term in order that they are able to fully exploit their mandates.

Thursday, 7 August 2014

UK: FCA restrictions on the distribution of CoCos to retail investors

Section 138I of the Financial Services and Markets Act 2000, inserted by section 24 of the Financial Services Act 2012 - imposes obligations on the Financial Conduct Authority in respect of the exercise of its rule-making powers, including, for example, publishing a draft of the rules accompanied by a cost benefit analysis. An exception is provided by section 138M of the 2000 Act in respect of temporary product intervention rules, the first use of which was illustrated earlier this week when the FCA announced that it would impose restrictions on the distribution of contingent convertible securities (CoCos) to retail investors from 1 October: see here (pdf).

At European level, the risks associated with investment in CoCos were highlighted on 1 August in a statement published by the European Securities and Markets Authority: see here (pdf).

UK: FCA consultation - workplace pensions and independent governance committees

The Financial Conduct Authority has published for consultation the rules it proposes to make in order to require certain firms to establish independent governance committees in respect of their workplace personal pension schemes: see here (pdf).

Wednesday, 6 August 2014

UK: Part V of the Walker Guidelines - amended version published

Part V of the Guidelines for Disclosure and Transparency in Private Equity (also known as the Walker Guidelines) were amended last month. The amended version of Part V is available here (pdf) and replaces part V and Annex D from the Guidelines issued in 2007.

Tuesday, 5 August 2014

The fourth edition of the ICGN Global Governance Principles

The codes and principles directory maintained by the European Corporate Governance Institute was updated yesterday with a copy of the fourth edition of the Global Governance Principles published by the International Corporate Governance Network: see here.

Monday, 4 August 2014

Europe: Single Resolution Mechanism Regulation published

The 30 July 2014 (L225) edition of the Official Journal of the European Union contains Regulation (EU) No 806/2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund: see here. Background information is available here.

Friday, 1 August 2014

UK: FCA consults on transposition of the Recovery and Resolution Directive

The Financial Conduct Authority has published for consultation the changes it proposes to make to its Handbook as part of the UK's transposition of European Directive 2014/59/EU on the establishment of a framework for the recovery and resolution of credit institutions and investment firms: see here (pdf). The Prudential Regulation Authority is also undertaking a consultation in respect of the changes it will make to its Handbook: see here.

Thursday, 31 July 2014

Ireland: Irish Collective Asset-Management Vehicles Bill 2014

The Irish Collective Asset-Management Vehicles Bill 2014 was introduced in the Dáil Éireann several days ago: see here. A copy of the Bill, as introduced, is available here (pdf). Explanatory notes are available here (pdf). The purpose of the Bill is to create a new corporate vehicle for funds in Ireland and a framework for the operation of the new vehicles.

Wednesday, 30 July 2014

UK: PRA/FCA consultation papers - new senior managers regime and new remuneration rules

The Financial Conduct Authority and Prudential Regulation Authority published two joint consultation papers today. The first, titled Strengthening accountability in banks: a new regulatory framework for individuals, sets out the proposed framework for the new senior managers regime and the new certification regime: see here (pdf). The second paper, titled Strengthening the Alignment of Risk and Reward: New Remuneration Rules, sets out proposed changes to the Remuneration Code: see here (pdf).

UK: corporate governance reform proposals

Earlier this month the Trades Union Congress published a collection of essays on the subject of corporate governance and reform. The collection, published under the title Beyond Shareholder Value - The reasons and choices for corporate governance reform, is available here (pdf).

UK: Takeover Panel 2014 annual report published

The Takeover Panel has published its annual report and accounts for the year to 31 March 2014: see here (pdf). The report explains, amongst other things, that during this period the Panel Executive issued one letter of private criticism (related to the conduct of the parties involved) and 41 educational/warning letters (higher than in previous years).

Tuesday, 29 July 2014

Monday, 28 July 2014

Europe: Commission evaluation of the Commercial Agents Directive

The European Commission has begun its first general evaluation of the Commercial Agents Directive (86/653/EEC): see here.  A public consultation has been launched, the purpose of which is to seek information about the operation and future of the Directive (in particular its significance for SMEs and cross-border activities).

Friday, 25 July 2014

UK: market for statutory audit services - CMA publishes draft Order

The Competition and Markets Authority has published for comment 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 in this regard. An explanatory note accompanying the Order is available here (pdf). Further background information, including all of the Competition Commission's inquiry publications, can be found here.

Thursday, 24 July 2014

UK: EHRC inquiry into the appointment and recruitment of FTSE350 directors

The Equality and Human Rights Commission has begun an inquiry examining the recruitment and appointment practices of FTSE350 companies: see here. As part of the inquiry, guidance has been published on board appointments and equality law: see here (pdf).

UK: HM Treasury consults on transposition of the Bank Recovery and Resolution Directive

HM Treasury has begun a consultation in respect of the UK's implementation of European Directive 2014/59/EU on the establishment of a framework for the recovery and resolution of credit institutions and investment firms: see here. Further information about the Directive is available here.

UK: The Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014

The Financial Services and Markets Act 2000 (Ring-fenced Bodies and Core Activities) Order 2014 was made yesterday and comes into force on 1 January 2015: see here (pdf). The Order forms part of the statutory framework governing the ring-fencing of banking activities and defines which banks are ring-fenced bodies and the activities which can only be done by ring-fenced bodies. It also defines the circumstances in which accepting deposits can be undertaken by banks that are not ring-fenced. Further information is available in the explanatory memorandum prepared to accompany the Order: see here (pdf).

Wednesday, 23 July 2014

UK: FCA consultation on removing the requirement to publish interim management statements

The Financial Conduct Authority has published a consultation paper setting out the changes it will make to the Disclosure Rules and Transparency Rules (DTR) in order to remove the requirement for issuers to publish interim management statements: see here (pdf).

UK: FRC issues amendments to UK GAAP (FRS101 and FRS102)

The Financial Reporting Council has today published amendments to Financial Reporting Standard 101 and Financial Reporting Standard 102: see here.

Tuesday, 22 July 2014

India: SEBI International Advisory Board discusses corporate governance norms

The International Advisory Board (IAB) of the Securities and Exchange Board of India held its fourth meeting a few days ago: see here. Amongst the matters discussed were corporate governance norms in India. The IAB has suggested that there should be different governance standards for large and complex groups and it also called for more focused enforcement of corporate governance norms.

Monday, 21 July 2014

IFAC/CIPFA International Framework: Good Governance in the Public Sector

Earlier this month, IFAC and CIPFA launched their International Framework - Good Governance in the Public Sector: see here (pdf). The framework contains seven principles that can be used to review and update national governance codes for the public sector. A supplement has been published to accompany the framework and this provides further information and examples in respect of the seven principles: see here (pdf).

Friday, 18 July 2014

UK: Government consults on new employee shareholding vehicle

The Government has begun a consultation in which it seeks views on whether a new vehicle for employee shareholding is required: see here.

UK: Takeover Code - consultation on proposed amendments

The Code Committee of the Takeover Panel has published a consultation paper setting out proposed amendments to various provisions in the Takeover Code: see here (pdf). It is, for example, proposed that the deadline for a potential competing offeror to clarify its position should be a firm date set out in the Code and not, as present, a flexible date set by the Panel on a case by case basis.