Wednesday, 30 November 2011

Europe: the Commission's audit market reform proposals

The European Commission today published wide-ranging proposals for the reform of the audit market. If these become law they will make dramatic changes to the legal framework governing the audit and the organisational structure of the largest firms.

With regard to public-interest entities, the Commission is proposing, amongst other things, mandatory audit firm rotation after six years (9 years if two audit firms are used) and a ban on the auditor providing certain non-audit services. Mandatory tendering of the audit is also proposed and contract clauses requiring a company to be audited by one of the 'Big Four' will be prohibited. The Commission also wants structural changes within the largest firms so that there is a complete separation between auditing and non-auditing activities.

Elsewhere in the proposals, a greater role is proposed for the audit committee, which the Commission says should consist of non-executive directors, with at least one NED having experience and knowledge of auditing and another experience and knowledge in accounting and/or auditing. A greater role for the European Securities and Markets Authority is proposed with regard to coordination between regulators in Member States but also with regard to the publication of guidance on various matters identified in the Regulation including, for example, the content of the handover file to be provided by outgoing auditor to the incoming auditor.

Requiring firms to have joint auditors is not proposed at this stage although it is clear that the Commission believes that there is merit in the largest firms having two auditors (note what is said in the below video).

For further information see: Press release | FAQs | Draft Regulation (pdf) | Draft Directive (pdf) | Impact assessment: full version (pdf) or summary (pdf) | Video summary (and below) |

Europe: freedom of establishment and taxation

The Court of Justice of the European Union gave its opinion yesterday in National Grid Indus BV v Inspecteur van de Belastingdienst Rijnmond / kantoor Rotterdam (C‑371/10). A summary of the court's opinion is available here (pdf), from which this headline is taken: "EU law does not in principle preclude the charging of tax on unrealised capital gains relating to the assets of a company when it transfers its place of management to another Member State".

UK: board trends and practices - SpencerStuart report

SpencerStuart has published the 2011 edition of its review of the governance practices of the largest 150 companies in the FTSE indexes: see here (pdf). The report notes an increase in the number of foreign non-executive directors and an increase in the number of companies having a separately constituted risk committee (up to 19, from 12 last year).

Tuesday, 29 November 2011

UK: England and Wales: Court of Appeal upholds decision to wind-up companies offering extended warranties

Earlier this year, in Re Digital Satellite Warranty Cover Ltd. [2011] EWHC 122 (Ch), the High Court held that three companies should be wound-up where they carried on business in contravention of the general prohibition found in Section 19 of the Financial Services and Markets Act (2000). The companies offered extended warranty contracts which the trial judge held were contracts of insurance as defined in Article 3(1) and Schedule 1 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/344).

An appeal against the winding-up orders was made and the Court of Appeal gave its opinion today: see Digital Satellite Warranty Cover Ltd v The Financial Services Authority [2011] EWCA Civ 1413. The court held that the trial judge was entitled to find that the warranties were contracts of insurance within class 16(b) in Schedule 1 of the 2001 Order.

UK: the Autumn Statement and financial regulation

The Chancellor delivered his Autumn Statement today: see here. Whilst principally focussed on Government spending and taxation, the Statement contained a couple of items concerning financial regulation (at paras. 1.70 to 1.74). First, the Government has reiterated its intention to introduce legislation next year to reform the UK's financial regulatory framework (draft legislation is currently under scrutiny in Parliament). Second, the Government states that by the end of the year it will publish further information regarding the options for the implementation of the recommendations made by the Independent Commission on Banking.

UK: England and Wales: permission granted to continue derivative claim

The High Court gave judgment today in Parry v Bartlett [2011] EWHC 3146 (Ch) and granted permission to continue a derivative claim under Part 11 of the Companies Act (2006) in respect of alleged breaches of directors' duties. The case was, in the view of the trial judge, a classic case for a derivative claim (and would have been so under the common law framework which was in place prior to Part 11).

Monday, 28 November 2011

UK: IoD calls for binding shareholder vote on remuneration

The deadline for submissions to the Government's consultation on executive remuneration closed last week. On Friday the Institute of Directors published a press release setting out what it had argued in its submission: see here. A binding shareholder vote on remuneration policy and greater simplification of remuneration packages were two of several recommendations made.

Friday, 25 November 2011

UK: Grant Thornton's FTSE350 Corporate Governance Review 2011

Grant Thornton has published the 2011 edition of its annual corporate governance review: see here (pdf). The review is based upon the annual reports of 298 FTSE350 companies with year ends between May 2010 and April 2011 (excluding investment companies). The review notes, amongst other things, that 70% of companies have introduced annual re-election for directors (one of the recommendations made in the revised UK Corporate Governance Code published last year). It is also reported that, on average, FTSE350 companies change their statutory auditor once every 34 years. With regard to board size, eleven is the average for FTSE100 companies.

Europe: free movement of capital and the VW law

The European Commission has referred Germany to the Court of Justice of the European Union in respect of its failure to comply fully with the court's earlier decision - Commission v Germany (C-112/05) - regarding the so-called Volkswagen law: see here.

India: company law reform and Companies Bill 2011

Further progress has been made with regard to the reform of company law in India. The Companies Bill 2009 was introduced in the Lok Sabha on 2009 and later referred to the Standing Committee on Finance for examination. The Committee's report was published in 2010 - see here (pdf) - and, since then, further work on the Bill has been undertaken. In a recent interview the Minister for Corporate Affairs said that an "entirely rewritten" Bill - the Companies Bill 2011 - would be introduced in the winter session of Parliament, following Cabinet approval. It is now being widely reported that Cabinet approval was given yesterday: see here or here.

UK: the Open-Ended Investment Companies (Amendment) Regulations 2011

A draft of the Open-Ended Investment Companies (Amendment) Regulations 2011 was laid before Parliament earlier this week: see here or here (pdf). Accompanying the publication of the draft Regulations is an explanatory memorandum here (pdf) and an impact assessment (herepdf). The purpose of the Regulations is to introduce a protected cell regime for open ended investment companies in order to ensure the segregation of liabilities of different sub funds held under the same OEIC umbrella company.

Thursday, 24 November 2011

Deloitte publishes second edition of 'women in the boardroom'

Deloitte has published the second edition of its report Women in the boardroom - a global perspective: see here (pdf). The report provides a summary of measures that have been taken (or which are being taken) with regard to the gender diversity of boards in Australia, Belgium, Canada, China, France, Germany, Hong Kong, India, Italy, Malaysia, the Netherlands, New Zealand, Norway, Singapore, Spain, the United Kingdom and the United States of America.

Wednesday, 23 November 2011

Singapore: MAS publishes revised corporate governance code

Earlier this year the Corporate Governance Council, formed by the Monetary Authority of Singapore, published a consultation paper (herepdf) containing proposed changes to the Corporate Governance Code to which listed companies are subject on a comply or explain basis. The Council has now finalised its recommendations: a copy of the revised Code is available here (pdf) and a feedback statement from the Council is available here (pdf).

Tuesday, 22 November 2011

UK: HIgh Pay Commission publishes final report

The High Pay Commission published its final report today: see here (pdf). Titled Cheques with Balances: why tackling high pay is in the national interest, the report makes various recommendations including the simplification of remuneration structures, greater disclosure and employee representation on remuneration committees. The Commission considered whether the current shareholder advisory vote regarding the remuneration report should be binding but decided instead to propose that shareholders' advisory votes should relate to remuneration arrangements for the three years following the vote. With regard to remuneration consultants, the Commission recommends that companies disclose the nature and extent of all services provided in order to address perceived conflicts of interest. It is also recommended that all non-executive positions should be publicly advertised.

NB: the Government's consultation on executive pay ends this week.

Hong Kong: amendments to the governance code and listing rules

In December last year the Hong Kong Stock Exchange published a consultation paper reviewing its corporate governance code and associated listing rules (here, pdf). The results of that consultation, and the Exchange's proposed changes, have now been published: see here.

Monday, 21 November 2011

UK: the Kay Review of UK Equity Markets and Long Term Decision Making

The Secretary of State for the Department for Business, Innovation and Skills, the Rt. Hon. Dr Vince Cable MP, earlier this year announced the launch of an independent review, chaired by Professor John Kay, to consider the effect of UK equity markets on the competitiveness of business. An initial call for evidence was made (here, pdf), the deadline for which passed last week. On Saturday The Independent newspaper reported - see here - that Professor Kay has indicated that he is "ready to recommend a radical overhaul of the duties of big investors in monitoring companies in which they invest".

Europe: Commission's audit market reform proposals expected next week

The European Commission has announced - see here - that its audit market proposals will be published on 30 November, following the consultation which ended last year.  The Financial Times has reported - see here - that the ambitions of the internal market commissioner, Michel Barnier, have met with some resistance from his fellow Commissioners and that this seems likely to result in Mr Barnier compromising on plans to require large companies to have joint auditors.

Friday, 18 November 2011

New Zealand: the Auditor Regulation Act 2011 - first consultation paper published by FMA

The Financial Markets Authority has published the first of several consultation papers concerning the implementation of the Auditor Regulation Act 2011. The first paper - available here (pdf) - covers matters including the minimum standards a person would need to meet in order to receive a licence to perform issuer audits and the minimum standards an audit firm must meet in order to be registered.

UK: governance issues raised by Labour Party leader

The Leader of the Labour Party, the Rt. Hon. Ed Miliband MP, delivered a speech yesterday at the Social Market Foundation in which governance issues received his attention: see here. More specifically, Mr Miliband, observed:

The second area where we need fundamental change is in the way companies have been told to think about their worth. The old way said that short term shareholder value should drive business strategies, and that would deliver for everyone. That the board should first and foremost be concerned with the short term share price. That institutional investors were right to be impatient for quick returns. But again what business has told me is that it is hampering their ability to create productive wealth. Instead, our economy has been held back by the short-term pressures under which our companies operate. Examples abound. The inability of a great British firm like Cadburys to resist Kraft’s takeover once speculating shareholders had decided there was a short term profit to be made. The battles with institutional shareholders in which Rolls Royce had to engage during the 1990s, so that it could make the long term investments that have made it such a success today.

In recent weeks, travelling around the country, I have met business people over and over again who tell me they simply cannot get support for the long-term investments they need. What is interesting is that sometimes it is different forms of ownership, from mutuals to family owned businesses, that provide protection against the predatory short-termism of the system. So to address this short-termism we will need to address a whole range of areas. Including those raised by Richard Lambert, the former Director General of the CBI. We need to look at why so many funds of institutional investors seem to be managed as if the only important issue was the next quarterly announcement. We need to look at whether the voting rights of shareholders should always be the same from day one of ownership. And we need to look at how the tax system can encourage and discourage short-term behaviour that holds Britain back".

Thursday, 17 November 2011

Europe: ESMA's AIFM Directive rules

The European Securities and Markets Authority has published its final advice on the detailed rules underlying the Alternative Investment Fund Managers Directive: see here. The purpose of ESMA's proposed rules is to establish a comprehensive framework for alternative investment funds, their managers and depositaries.

Wednesday, 16 November 2011

UK: England and Wales: implied terms and the articles of association

The Court of Appeal gave judgment last week in Cream Holdings Ltd v Davenport [2011] EWCA Civ 1287 and unanimously held that the trial judge (at [2010] EWHC 3096 (Ch), [2010] All ER (D) 100 (Nov)) was right to find that a term should be implied in a company's articles of association providing that a shareholder should not unreasonably withhold his consent to the appointment of an accountant in the context of provisions in the articles for the transfer and valuation of shares.

Europe: Commission publishes credit rating agency proposals

Yesterday afternoon the European Commission published proposals for a Regulation and a Directive regarding credit rating agencies. A video recording of the Commission's press conference, at which the Internal Market Commissioner (Michel Barnier) spoke, is available here. It is proposed, amongst other things, that an agency should not provide a rating for a paying issuer for a period greater than three years. It would appear that Mr Barnier was unable to secure agreement amongst his fellow Commissioners for proposals concerning the suspension of sovereign ratings in exceptional circumstances; further analysis and work will therefore take place. For further information see: press release | FAQs | proposed Regulation (pdf) and Directive (pdf) | Impact assessment: executive summary (pdf) and full version (pdf) |

Tuesday, 15 November 2011

Europe: consultation on the EU corporate governance framework - feedback statement published by Commission

The European Commission has a published a feedback statement summarising the responses received in respect of its corporate governance green paper: see here (pdf). The statement provides a summary of the individual responses received; it does not contain any policy pronouncements.

Gibraltar: proposed corporate tax changes constitute state aid

The Court of Justice of the European Union (Grand Chamber) gave its opinion today in Commission v Government of Gibraltar and United Kingdom: see here. A press summary is available here (pdf). The court decided that proposed changes to the taxation of companies in Gibraltar - the effect of which was that offshore companies would pay no tax - constituted state aid and were therefore incompatible with EU law. The court found that offshore companies enjoyed a selective advantage under the proposals which, in the court's view, was not the random consequence of the proposed regime: it was the inevitable consequence of the proposed bases of assessment (the number of employees and occupation of premises).

Australia: the Commonwealth Government Business Enterprise Governance and Oversight Guidelines

The Australian Government Department of Finance and Deregulation has published Commonwealth Government Business Enterprise Governance and Oversight Guidelines: see here (pdf) or here (.doc). These apply to Government Business Enterprises (GBEs) that are Commonwealth authorities and GBEs that are wholly-owned Commonwealth companies.

Monday, 14 November 2011

Germany: the Code Commission's response to the European Commission's governance green paper

A copy, in English, of the the Code Commission's response to the European Commission's recent corporate governance green paper has been published: see here (pdf). In its response, the Code Commission states, amongst other things, that it would be premature to conclude with regard to German companies that there are deficiencies in the explanations provided for non-compliance with the Code.

UK: consultation on reform of the bankruptcy and compulsory winding-up application process

The Insolvency Service has published a consultation paper titled Reform of the Process to Apply for Bankruptcy and Compulsory Winding Up: see here (pdf). The principal proposal is that where there is no dispute between the parties, the court should be removed from the process by which bankruptcy and winding-up orders are granted.

Friday, 11 November 2011

Japan: Olympus - statement by the Minister of State for Financial Services

Japan's Financial Services Agency has published a statement by the Minister of State for Financial Services, Shozaburo Jimi, with regard to Olympus: see here.

Europe: ESMA consults on materiality concept in financial reporting

The European Securities and Markets Authority has published a consultation paper seeking views on the application of the concept of materiality in the preparation of financial statements under IFRS: see here (pdf). The ESMA is seeking views because of concerns regarding differences of approach with regard to the application of the concept of materiality amongst preparers, auditors and, possibly, the users of financial reports.

USA: listing standards for reverse merger companies - SEC approves new rules

The Securities and Exchange Commission has approved new rules designed to strengthen the listing standards for reverse merger companies: see here.

Europe: Portugal's golden share in ALP Energia SGPS SA

The Court of Justice of the European Union gave its opinion yesterday in European Commission v Portuguese Republic (Case C‑212/09): see here. The court held that Portugal had failed to fulfil its obligations under Article 56 of the EC Treaty by maintaining its golden share in GALP Energia SGPS SA which gave it, amongst other things, a right of veto regarding the appointment of certain directors and the right to appoint the company's chairman.

Thursday, 10 November 2011

UK: the Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011

The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 was made earlier this week: see here or here (pdf). An explanatory note is available here. The Order makes various reforms including, for example, permitting companies to become members of credit unions.

UK: review of the legal and regulatory framework governing charities

The Government has announced, in a written ministerial statement (here, pdf), that a review of the legal and regulatory framework governing charities, including but not restricted to the operation of the Charities Act (2006), is to be undertaken by Lord Hodgson of Astley Abbotts. The review's terms of reference are available here (pdf) and include the transparency and accountability of the charity sector, including reporting and auditing.

Wednesday, 9 November 2011

Europe: amending the Financial Conglomerates Directive - amending Directive adopted by Council of the EU

The Council of the European Union yesterday adopted a Directive making changes to the Financial Conglomerates Directive: see here (pdf).

Norway: changes made to corporate governance code

The Norwegian Corporate Governance Board has made several changes to its Corporate Governance Code: see here (pdf). One of the changes will require companies not complying with the code's recommendations to provide more information: in addition to providing an explanation for non-compliance, information regarding the alternative approach taken must be given.

Tuesday, 8 November 2011

UK: Accountability of the Bank of England - Treasury Committee report published

The House of Commons Treasury Select Committee published its report Accountability of the Bank of England today: see here or here (pdf). Additional written evidence has been published separately: see here or here (pdf). The Committee argues that the governance of the Bank of England needs to be strengthened and its accountability increased. Various recommendations are made in this regard, including changes to the Bank's Court of Directors and the suggestion that in times of financial crisis, where there is a material risk to public funds, the Chancellor should have a limited power to direct the Bank.

UK England and Wales: the meaning of 'non-executive director'

The Companies Act (2006) provides definitions for 'director' and 'shadow director' - see sections 250 and 251 respectively - but does not define 'non-executive director'. What is meant by 'non-executive director' has, however, been considered in the recent High Court decision Mond v Bowles (Ch.D., Companies Court, 21 October 2011; judgment not yet available on BAILII). With reference to Equitable Life v Bowley [2003] EWHC 2263 (Comm) (paras. [35] to [39]), the trial judge observed that 'non-executive director' was not a term of art and had no set meaning in English law.  It was necessary, therefore, for the court to have regard to the functions carried out by the director in relation to the particular circumstances of the company and its business.

UK: APB consults on amendments to the Ethical Standards for Auditors

The Auditing Practices Board is seeking views on a couple of proposed amendments to Ethical Standard 5 and Ethical Standard 1: see here (pdf). The amendment proposed with regard to ES5 concerns an earlier amendment that took effect in December 2010, which prohibited firms from undertaking any tax services on a contingent fee basis for companies they audit where the outcome is dependent on uncertain tax law. A transitional provision was included, permitting firms to continue with engagements entered before 31 December 2010 until the earlier of 31 December 2011 or the completion of the engagement. The APB is proposing that this period should be extended to 31 December 2014 because it has been advised that a large number of engagements are likely to remain unresolved after 31 December 2011 because of the time it will take for legal proceedings to be completed.

UK: the composition of boards and remuneration committees

The debate regarding the remuneration of the directors of large listed companies continues. The Archbishop of York has asked whether there should be employee representatives on company boards - see here - and Sir Richard Lambert, a former Director General of the Confederation of British Industry, has suggested, amongst other things, a role for Parliament: see here.  It would, in Sir Richard's view, "help to concentrate the minds of [remuneration] committee chairs if they thought there was a chance that they might be asked to explain their decisions to a Commons select committee".

Monday, 7 November 2011

UK: England and Wales: manager's falsification of records not attributed to company

Judgment was given last Friday by the Court of Appeal in R v St Regis Paper Co. Ltd [2011] EWCA Crim 2527. A copy of the decision has not yet been published on BAILII. The case concerned the offence of intentionally making a false entry in a record required for environmental pollution control under Regulation 32(1)(g) of the Pollution Prevention and Control (England and Wales) Regulations 2000. The company's records were intentionally falsified by its technical manager. At issue was whether the company could be liable under Regulation 32(1)(g). At a pre-trial hearing in the Crown Court, His Honour Judge Wassall held that the actions of the technical manager could be attributed to the company because the manager's mind could be identified as the controlling mind and will of the company. This ruling was not reconsidered by the Recorder and it was left open to the jury to consider whether the manger's action could be attributed to the company.

Lord Justice Moses, delivering the opinion of the court, held that liability could not be imposed on the company unless the intention to make a false entry was capable of being attributed to it in accordance with Tesco Supermarkets Ltd v Nattrass [1972] AC 153. He held that it could not in the circumstances. As such, HHJ Wassall was wrong to hold that the manager's intention to make a false entry could be attributed to the company and it was also wrong for the Recorder to leave it open to the jury to reach such a conclusion.

Update (8 November 2011): a summary of the decision has been provided by the ICLR: see here.

Update (9 November 2011): a copy of the decision is now available on BAILII: see here.

UK: FTSE Group consultation on minimum free float requirements

The FTSE Group is undertaking a consultation on the minimum free float requirements for UK incorporated companies in the FTSE UK Index Series: see here. It is proposed that the current minimum of 15% should be increased to 25% for companies seeking inclusion in the FTSE UK Index Series.

Ireland: ISE feedback statement on proposed changes to the listing regime

The Irish Stock Exchange has announced, following a consultation earlier this year, that it will not replicate the premium and standard listing categories used in the UK Listing Rules. For further information see the feedback statement and accompanying appendices: here (pdf) here (pdf).

Friday, 4 November 2011

UK: Governance Code for the Voluntary and Community Sector (smaller organisation version)

In October last year, a governance code for the voluntary and community sectors was produced on behalf of a steering group formed by the Association of Chief Executives of Voluntary Organisations, the Institute of Chartered Secretaries and Administrators, the National Council for Voluntary Organisations and the Small Charities Coalition: see here (pdf). A version of the code for smaller organisations was published this week: see here (pdf).

UK: directors' remuneration, shareholders and women on boards

The debate regarding the remuneration of the directors of the largest listed companies continued this week with a question to the Prime Minister in Parliament on Wednesday, as part of Prime Minister's Questions. The Prime Minister was asked whether he was "committed to the transfer of power over pay from the boardroom to the shareholders". He replied:

I do want to see that happen. The answer to this is much more transparency about the levels of pay, much more accountability, and strengthening the hand of shareholders. There is something else we need to do, which is to make sure that non-executive directors on boards are not the usual sort of rotating list of men patting each other’s backs and increasing the level of remuneration. I want to see more women in Britain’s boardrooms, which I think would have a thoroughly good influence."

The record of debate, Hansard, is available here (see col. 922). The Prime Minster's Spokesman, in a press briefing that followed PMQs on Wednesday, was asked whether there was a link between greater female representation on boards and lower remuneration - see here - to which this response was provided:

... in Prime Minister's Questions the Prime Minster had made [a] more general point about reform of Britain’s boardrooms ... the Prime Minster was essentially making the point that as the same people were appearing in different boardrooms over and over again, we could do with some new blood and seeing that in the past most boardrooms have been filled with men, bringing in more women would be a good thing."

India: new Takeover Code

The Securities and Exchange Board of India has published a copy of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which contain the revised framework for the conduct of takeovers in India: see here (pdf).

UK: the Sharman Inquiry - preliminary report and recommendations

Last year the Financial Reporting Council launched an inquiry, led by Lord Sharman, to identify lessons for companies and auditors regarding the going concern assessment and liquidity risk. The inquiry panel published its preliminary report and recommendations yesterday: see here (pdf). The Panel recommended, amongst other things, that the FRC should harmonise, and clarify, the purpose of the going concern assessment and disclosure process in the UK Corporate Governance Code and related guidance and should consider whether the language used in the Code - to the effect that directors should state that the entity is a going concern - is too definitive.

Thursday, 3 November 2011

UK: England and Wales: section 172 of the Companies Act (2006)

Last month, in Kaur, R (on the application of) v Institute of Legal Executives Appeal Tribunal [2011] EWCA Civ 1168, the Court of Appeal held that the presence of the ILEX vice president on the Institute's Appeal Tribunal, which heard an appeal from a student member charged with examination malpractice, gave rise to the appearance of bias and that the decisions of the Appeal Tribunal and preceding Disciplinary Tribunal should be quashed. It is interesting to note that section 172 ("duty to promote success of the company") of the Companies Act (2006) was referred to by counsel, it being argued on the student member's behalf that the vice president, who as an ILEX council member was also a company director (ILEX being a company limited by guarantee), had a duty to ensure compliance with professional standards by prosecuting breaches, a position supported by section 172(2)(e) which required directors to have regard to the "desirability of the company maintaining a reputation for high standards of business conduct".

Wednesday, 2 November 2011

UK: England and Wales: the construction of commercial contracts - the importance of business common sense

The Supreme Court gave judgment today in Rainy Sky S.A. v Kookmin Bank [2011] UKSC 50 (on appeal from [2010] EWCA Civ 582). A single, composite opinion was given by Lord Clarke, with whom the other justices agreed: see here or here (pdf). A summary of the opinion is available here (pdf). The appeal concerned the construction of shipbuilder's refund guarantees and required the court to consider the role played by considerations of business common sense in determining what the parties meant. In this regard, Lord Clarke stated (at para. [21]):

The language used by the parties will often have more than one potential meaning. I would accept ... that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other."

UK: the ONS share ownership survey - due in February 2012

The Office for National Statistics has announced several changes to the methodology it employs to produce its survey of the ownership of ordinary shares of UK quoted companies, which was last published in 2010 in respect of ownership on 31 December 2008. ONS has also announced that its next survey will be published in February 2012 in respect of the ownership of shares on 31 December 2010: see here.

Singapore: proposed changes to the takeover code

The Securities Industry Council has published a consultation paper setting out proposed changes to the Singapore Takeovers and Mergers Code: see here (pdf). A copy of the code, with the proposed amendments highlighted, is available here (pdf). Amongst the amendments proposed is one which seeks to clarify the sanctions available to the SIC in respect of breaches of the Code and which makes explicit that the SIC may, where there has been what it describes as a 'flagrant' breach of the code, deprive the offender (to use the SIC's words again) from enjoying the facilities of the securities market either temporarily or permanently.