Malaysia: Securities Commission publishes corporate governance strategic priorities for 2021-2023

Last week the Securities Commission published its corporate governance strategic priorities for 2021-2023: see here. An overview is provided in the below video (or by clicking here). 

European Union: EBA publishes revised internal governance guidance for investment firms

The European Banking Authority has published revised guidance on internal governance for investment firms: see here (pdf). The accompanying press release, available here, notes that the guidance has been developed on the basis of Article 26 of Directive (EU) 2019/2034 on the prudential supervision of investment firms, which obliges Member States to ensure that investment firms have "robust" governance arrangements and that, in this regard, the EBA should issue guidelines.

UK: England and Wales: equitable constraints and unfair prejudice

Last week - a week ago today, in fact - the Court of Appeal delivered its judgment in Loveridge v Loveridge [2021] EWCA Civ 1697. I note the decision here because of the discussion it contains regarding the scope of equitable constraints in the context of claims for unfair prejudice under section 994 of the Companies Act 2006. One of the alleged equitable constraints related to the circumstances in which a director could be required to repay a loan received from the company. Mrs Justice Falk (with whom Nugee and Bean LJJ agreed) stated (at para. [95]): 

"As Lord Hoffmann explained in O'Neill v Phillips at p. 1099F-G, 'a balance has to be struck between the breadth of the discretion given to the court and the principle of legal certainty'. In circumstances where a loan is interest free and legally repayable either immediately or on demand, it seems to me that the court should be very reluctant to impose equitable constraints that, if recognised, would fetter the exercise of directors' duties and could in reality significantly impair the value of the chose in action that the loans represent".

UK: England and Wales: fraudulent trading under section 993 of the Companies Act 2006

Judgment was delivered today by the Court of Appeal in R v Hunter v [2021] EWCA Crim 1785, a case concerning what has become known as 'ticket touting'. The judgment is now a leading authority on the scope of the fraudulent trading offence found in section 993 of the Companies Act 2006. Section 993(1) provides: "If any business of a company is carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, every person who is knowingly a party to the carrying on of the business in that manner commits an offence". 

In considering the scope of section 993, the court rejected the following arguments: that an intention to deceive is a necessary component of the offence; that the conduct must involve deliberately putting another person's property in jeopardy; that section 993 should be construed as being subject to the common law limitations applicable to the offence of conspiracy to defraud. Moreover, the court observed (para. [120]):

The focus upon purpose means that the law is prophylactic. A fraudulent purpose might be proven before anyone is actually defrauded or becomes an actual victim of the fraud. In the present case if the Prosecution had charged the defendants after they had acquired the relevant bots and other software and the multiple credit cards and had set up a system for using an array of false identifies, but before the defendants had put that system into operation and used it to trick ticket vendors into selling them tickets and/or to place end consumers at risk, then the offence would still have been committed even though there was no actual fraud and no actual harm to end consumers and therefore no victims. A fraudulent purpose would still be in existence and business acts to achieve that purpose would have been carried out. Of course, evidence of implementation might afford powerful additional evidence of the fraudulent purpose, but implementation of a fraudulent purpose is not an essential ingredient of the offence". 

BCBS consultation - principles for the effective management and supervision of climate-related financial risk

The Basel Committee on Banking Supervision has published a consultation paper in which views are sought on proposed principles for the effective management and supervision of climate-related financial risk: see here (pdf).