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Tuesday, 31 January 2012
UK: the future of the UK financial reporting - revised proposals from the ASB
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Labels:
asb,
financial reporting,
frc,
frsse,
ifrs,
ifrs for smes,
uk
Monday, 30 January 2012
UK: financial regulation reform - Financial Services Bill introduced in Parliament
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The Government has also published another White Paper - A new approach to financial regulation: securing stability, protecting consumers, available here (pdf) - which builds on earlier White Papers and sets out its response to some of the recommendations made by the Treasury Select Committee and Pre-Legislative Scrutiny Committee in respect of an earlier draft of the Bill. Revised objectives have, for example, been provided for the Financial Conduct Authority (FCA); an explicit "duty to supervise" will be given to the Prudential Regulation Authority (PRA); and the Chancellor will be given a limited statutory power of direction over the Bank of England where a notification of risk to public funds has been made by the Bank's Governor and there is a serious threat to financial stability.
The White Paper also explains some new policy decisions including, for example, a much greater role for the FCA with regard to consumer credit. The Government also appears to have rejected calls for the creation of a Supervisory Board for the Bank of England, preferring instead the Bank's proposal for an Oversight Committee. Further consultation is promised in respect of the suggestion that the Threshold Conditions for authorisation should be reviewed and also with regard to the manner in which these Conditions are divided between the FCA and PRA. Further consultation is also to take place with regard to the macro-prudential tools available to the Financial Policy Committee (FPC). The Paper also explains that the Government will be consulting later this year in respect of a couple of issues identified by the Financial Services Authority in its report into the failure of Royal Bank of Scotland: should regulatory pre-approval be required for all significant merger and acquisition activity in the banking sector and are changes necessary to the liability regime for senior management and directors?
One of the recommendations made by the Scrutiny Committee was for the publication, alongside the Bill, of relevant secondary legislation including the Order under which the scope of the PRA's prudential supervision role would be defined. This has been done: a draft of the Financial Services and Markets Act 2000 (PRA-Regulated Activities) Order has been published (see here, pdf) along with further draft secondary legislation and draft memoranda of understanding (including a memorandum setting out the framework for coordination of financial crisis management between the Treasury, Bank of England and the PRA: see here.
Update (30 January 2012): Hansard, when recording the Bill's First Reading, also states that Second Reading was scheduled for today. This is a mistake. According to the Parliamentary Calendar, Second Reading has been timetabled for 6 February 2012.
Labels:
bank of england,
fca,
financial services,
financial services bill,
fpc,
fsa,
hm treasury,
pra,
uk,
uk fsa
Friday, 27 January 2012
UK: England and Wales: directors' duties - disclosure, creditors and other matters
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Arguably, it breaks new ground in treating a fiduciary duty as prescriptive rather than merely proscriptive. Its result can perhaps now be justified also by reference to section 172 of the Companies Act 2006, which came into force on 1 October 2007. The duty to promote the success of a company which that provision imposes can be said to be expressed in prescriptive terms (a director "must act in the way he considers, in good faith, would be most likely to promote the success of the company …" – emphasis added). Be that as it may, Item Software (UK) Ltd v Fassihi is clearly binding on me. I therefore proceed on the basis that a director's duty of good faith can potentially require him to disclose misconduct. .... a company complaining of a director's failure to disclose a matter must, I think, establish that the fiduciary subjectively concluded that disclosure was in his company's interests or, at least, that the director would have so concluded had he been acting in good faith".Fourth, Mr Justice Newey considered to whom the director was required to disclose information and stated (at para. [198] and [199]):
... it is perfectly possible to conceive of a director being bound to disclose a matter to someone other than fellow board members. Since the "touchstone" is the duty of a director to act in what he considers in good faith to be in the best interests of the company, the focus must be on what the relevant director in fact believed to be in the company's interests or would have believed to be in the company's interests had he been acting in good faith. If a director subjectively concluded that it was in the company's interests for a matter to be disclosed to a person who was not a member of the board (or if he would have so concluded had he been acting in good faith), it would, it appears, be incumbent on him to ensure that such disclosure was made. On the other hand, a director's duty of good faith is owed to his company, not to shareholders. The question is therefore as to what the director thought (or would have thought) was in the company's interests. That disclosure might have been in a shareholder's interests will not matter as such.
Thursday, 26 January 2012
UK: FSA seeks views on premium listing regime and proposes other amendments
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Wednesday, 25 January 2012
UK: financial regulation reform - the approach of the FCA
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Labels:
fca,
financial regulation,
financial services,
financial services bill,
fsa,
uk,
uk fsa
Tuesday, 24 January 2012
UK: Implementation of the Alternative Investment Fund Managers Directive
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Labels:
aifm directive,
financial services,
fsa,
uk,
uk fsa
Monday, 23 January 2012
UK: Government announces executive pay proposals
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Changes in the structure of remuneration reports will be introduced through secondary legislation, separating the report into two sections, one on future policy and another on the implementation of policy in the previous year. A binding vote - on which further consultation will take place - will be introduced with regard to future policy. Shareholder approval will also be required where a director's notice period is greater than a year, which will bring the legal framework in line with the UK's Corporate Governance Code which provides that notice or contract periods should be set at one year or less (Provision D.1.5).
It appears that the advisory vote will remain in respect of that part of the remuneration report concerning policy implementation but further consultation will take place on the consequences of a vote against and the threshold required for shareholder approval. In this section of the report companies will be required to provide a single figure for each director's pay and an explanation of how rewards relate to the company's performance.
With regard to board diversity, no new proposals were offered but the Secretary of State said that he wanted to see boards contain at least two people with no previous board level experience. He also said that he supported greater worker participation but that there were too many problems associated with a mandatory approach to worker representation on boards. Greater transparency regarding the role of remuneration consultants was promised and the Secretary of State also said that the Financial Reporting Council would be asked to amend the UK Corporate Governance Code to provide specific provisions regarding clawbacks.
A copy of the Secretary of State's statement will be published in Hansard - see here - and further information will be published soon on the BIS website. The proposals follow the publication in 2011 of a discussion paper, a summary of the responses to which were published today: see here (pdf).
UK: financial regulation reform - the accountability of the Bank of England
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Friday, 20 January 2012
UK: Scotland: company representation in court proceedings
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The court unanimously held that the director should not be permitted to represent the company. Different reasons for reaching this conclusion were given by Lady Paton and Lord Reed (Lord Bracadale supported Lord Reed's position). In Apollo and unlike the earlier Bankruptcy case, the court considered the relevance of Article 6 ("Right to a fair trial") of the European Convention on Human Rights. Nevertheless, with reference to Airey v Ireland (1979) 2 EHRR 305, Lord Reed found that Article 6(1) did not require the court to give the director permission to represent the company because this would not provide the company with an effective right of access to the court.
Thursday, 19 January 2012
UK: Government promises consolidated legislation for co-operatives and mutuals
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UK: shareholder voting rights and takeovers
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It's possible, although probably unlikely, that specific proposals regarding voting rights will be published in July this year when the Government publishes the final report as part of its short-termism review. Meanwhile, in today's Financial Times newspaper, the Labour Party leader, the Rt Hon Ed Miliband, writes that he is considering a proposal to limit shareholders' voting rights during takeovers as well as increasing the threshold required for shareholder approval of a takeover.
Wednesday, 18 January 2012
UK: financial regulation reform - the accountability of the Bank of England
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Labels:
bank of england,
banks,
financial regulation,
financial services,
uk
Tuesday, 17 January 2012
Italy: updated corporate governance code published by Borsa Italiana
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Monday, 16 January 2012
UK: Deputy Prime Minister on "responsible capitalism"
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Labels:
disclosure,
employee,
executive pay,
institutional shareholders,
remuneration,
shares,
uk,
voting
Friday, 13 January 2012
UK: the Financial Conduct Authority - Treasury Committee recommendations
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Labels:
bank of england,
fca,
financial regulation,
financial services,
financial services bill,
fpc,
fsa,
pra,
uk,
uk fsa
Europe: ESMA's first credit rating agency annual report
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Labels:
credit rating agency,
esma,
europe,
financial regulation
Thursday, 12 January 2012
UK: some reform proposals from the Labour Party
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We should consider moving towards a system which other countries have adopted where the nomination committee is not composed of board members but is composed of the four or five biggest shareholders in the company along with the non-executive chair of the board – that same committee, composed of shareholders, also recommends the structure and amount of remuneration. This would create far stronger lines of accountability to those who ultimately own the business and would promote the shareholder activism and engagement which is key".
Japan: an update from Olympus - legal action against directors
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Wednesday, 11 January 2012
UK: Labour Party to conduct review of short-termism
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Tuesday, 10 January 2012
Conference: corporate governance after the crisis
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Labels:
banks,
board of directors,
code,
ecgi,
financial regulation,
shareholder
Monday, 9 January 2012
UK: shareholders to get binding vote on pay
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Labels:
executive pay,
remuneration,
shareholder,
shareholder rights,
uk,
voting
Basel Committee consults on revised Core Principles for Effective Banking Supervision
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Friday, 6 January 2012
Europe: EBA Internal Governance Guidelines - compliance information published
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Under Article 16(3) of the EBA Regulation (available here, pdf), Member States' competent authorities are required to inform the EBA whether they comply (or intend to comply) with EBA guidelines or recommendations within two months of the publication of such guidelines and recommendations. Where a competent authority does not comply, or does not intend to comply, it is required to provide reasons to the EBA, which the EBA has the discretion to publish.
Thursday, 5 January 2012
USA: PCAOB proposes auditing standard on communication with audit committees
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Wednesday, 4 January 2012
Netherlands: compliance with the Dutch Corporate Governance Code
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Tuesday, 3 January 2012
UAE: Cabinet approves draft of new companies legislation
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