IFIAR publishes ninth annual inspection findings survey

The International Forum of Independent Audit Regulators has published its ninth annual (audit) inspection findings survey: see here. IFIAR members from 50 jurisdictions took part in the survey. The survey reports that 34% of the audits of public interest entities inspected by members had at least one "finding" (generally understood to be a significant deficiency in satisfying the requirements of auditing standards) - hence the observation that there continues to be a lack of consistency in the execution of high quality audits.

IOSCO statement on going concern assessments and disclosures during the Covid-19 pandemic

The IOSCO has published a statement on going concern assessments and disclosure during the COVID-19 pandemic: see here (pdf). Within the statement, the IOSCO has taken the opportunity to remind issuers, audit committees and external auditors of their important roles in providing investors with high-quality, reliable, timely, and transparent financial information - especially during times of uncertainty.

Japan: Council of Experts to consider revisions to governance and stewardship codes

The Council of Experts, set-up to review Japan's governance and stewardships codes, will meet on March 31 to consider revisions to the codes: see here.

UK: The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 were laid before Parliament today and come into force on Friday (March 26th): see here or here (pdf). The accompanying explanatory memorandum - available here (pdf) - explains the purpose of the Regulations as follows (para. 2):

... to further extend the duration of some of the temporary measures introduced by the Corporate Insolvency and Governance Act 2020 ... beyond their current expiration dates ... [including] suspending liability for wrongful trading in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 (S.I. 2020/1349) ... from the current expiry date of 30 April 2021 to 30 June 2021"

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European Union: the Statutory Audit Directive - Article 22 - "Employment by audited entities of former statutory auditors or of employees of statutory auditors or audit firms"

The Court of Justice of the European Union delivered its judgment today in A (Company law - Statutory audit of annual and consolidated accounts - Judgment) [2021] EUECJ C-950/19. The case concerned - as its name suggests - the Statutory Audit Directive 2006/43/EC (as amended by Directive 2014/56/EU), more specifically Article 22a which imposes a time-based bar on a statutory auditor, or key audit partner, taking up a position with a former audit client. The court held that a position for the purposes of Article 22(a)(1)9a) would be regarded as being held from the point at which the employment contract was agreed and not from when the duties associated with the position had begun to be performed.

UK: England and Wales: LLP members and disqualification

An important judgment of the High Court was delivered earlier today: Secretary of State for Business, Energy And Industrial Strategy v Geoghegan [2021] EWHC 672. The decision of Mr Justice Michael Green is noteworthy because it confirms that all members of a limited liability partnership can be disqualified under section 6 of Company Directors Disqualification Act 1986. The judge held, moreover, that [a] there is no requirement that such members should be on the management board (or at a level equivalent to a director of a company); [b] the conduct that can be relied on for the purposes of disqualification is anything done in the capacity of a member of a LLP; and [c] the test for unfitness is the same as in relation to companies.

UK: Government consultation - audit and governance reform

A quick note. The Government has, this morning, published a press release announcing the start of a consultation on "wide-ranging reforms to modernise the country’s audit and corporate governance regime": see here. At the time this post was originally posted, the consultation document (a white paper, I believe) had not been published - it ought to appear here later today (most likely after the Secretary of State for Business, Energy and Industrial Strategy has delivered a statement about the reforms in Parliament - as is expected according to the order paper for today).

UK: FTSE100 boards and ethnic minority directors

The Financial Times reports (here, paywall) that "[a]lmost a fifth of FTSE 100 boards lack any ethnic minority representation, with less than a year to hit a key target of at least one non-white director, according to a government-backed review into corporate diversity".

Update (12 March): The data cited by the FT are contained in a progress report, available here, published by the Parker Review Committee.

UK: First Review of the Insolvency (England and Wales) Rules 2016 - call for evidence

The Insolvency Service has published a call for evidence in respect of its first review of the Insolvency (England and Wales) Rules 2016: see here. These Rules, to quote from the opening paragraph of the call for evidence, "... set out the detailed procedure for the conduct of company and individual insolvency proceedings under the Insolvency Act 1986, providing the framework giving effect to the regime specified in the Act. They represent the single most significant piece of legislation in respect of the insolvency regime operating in England and Wales, after the Insolvency Act itself; and the largest, with over nine hundred rules in the main body and numerous additional schedules covering specific topics".

UK: The Accounts and Audit (Amendment) Regulations 2021

The Accounts and Audit (Amendment) Regulations 2021 were laid before Parliament yesterday and come into force on 31 March: see here or here (pdf). The purpose of the statutory instrument - to quote directly from its explanatory memorandum (here, pdf) - is to "amend... the Accounts and Audit Regulations 2015 (S.I 2015/234) ... by delaying the dates for certain public and local bodies to publish, and make available for inspection, their annual accounts and supporting documents" (para. 2.1).

OECD: ACI Guidelines - implemenation guide published

The OECD has this week published an implementation guide in respect of its Guidelines on Anti-Corruption and Integrity in State-Owned Enterprises: see here (pdf). 

UK: FCA announcement on the ending of LIBOR

The Financial Conduct Authority has published a further update in respect of the ending of LIBOR: see here. This follows the publication by ICE, the benchmark administrator, of a feedback statement in respect of its consultation on the ending of LIBOR: see here (pdf).

Australia: board meetings and differences in recollection

A recent decision of the New South Wales Court of Appeal - ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 - is worth noting because of the discussion it contains, albeit brief, regarding differences of recollection in respect of board meetings. To quote Bell P (with whom Bathurst CJ and Leeming JA agreed) (at para. [197]):

It is not unknown, still less uncommon, for disputes to arise as to what may have been said at meetings of boards of companies ... Sometimes, the differences may be substantial; sometimes, they may go to matters of emphasis or the extent of detail recorded about particular issues discussed. The mere fact that there may be competing versions of minutes does not mean, moreover, that one of the different versions is necessarily false: recollections of events may differ. Obviously it is desirable that directors reach accord as to the accuracy of minutes but that may not always be possible."

OECD: Working Paper 22 - the governance of company groups

The latest addition to the OECD working paper series on corporate governance has been published: number 22, the governance of company groups. This paper, to quote from its abstract, "presents a comparative overview of the regulation of groups in company law ... [and] also discusses how different corporate governance codes make recommendations on issues relevant to the boards in company groups". 

 

UK: The UK Listing Review - recommendations published

The UK Listing Review, chaired by Lord Hill, published its recommendations today: see here (pdf). As has been widely predicted, the Review is recommending that premium listed companies should be permitted dual class share structures (subject to certain conditions); that HM Treasury should conduct a fundamental review of the prospective regime, including the liability rules relating to forward-looking information; and free float requirements should be reviewed, lowering the minimum absolute requirement to 15%.

India: SEBI consultation - independent directors

Noting that concerns remain regarding the efficacy of independent directors as part of the governance framework, SEBI - the Securities and Exchange Board of India - has published for consultation various reform proposals including, most notably, new procedures for appointment and removal: see here. 

Hong Kong: Foss v Harbottle, 'fraud on the minority', and the common law derivative action

A recent decision of the Court of Appeal concerning the common law derivative action, Wang Pengying v Ng Wing Fai [2021] HKCA 100, will be of interest beyond Hong Kong - and in particular in England because of the discussion it contains about whether Harris v Microfusion 2003-2 LLP [2016] EWCA Civ 1212 was wrongly decided in holding that, for the purposes of the 'fraud on the minority' exception to what is known as the rule in Foss v Harbottle(1843) 2 Hare 461, personal benefit by the wrongdoers was required in cases of breach of duty not involving fraud.   

Two of the three appellate judges - Kwan VP and Yuen JA - expressed a view, albeit obiter: in their opinion, the appropriate test for the purposes of the 'fraud on the minority' exception was not personal benefit by the wrongdoers, or in loss to the company, but in the lawfulness of the majority vote releasing the defaulting director from liability. Yuen JA stated that the requirement for personal benefit by the wrongdoers, as set out in Microfusion, was "difficult to justify, because if ... not met, even the most egregious breach of duty cannot be brought to court" (para. 86.1). 

UK: FRC guidance - improving the quality of 'comply or explain' reporting

The Financial Reporting Council has today published guidance designed to help companies improve the quality of their 'comply or explain' reporting in respect of the UK Corporate Governance Code: see here (pdf). In the guidance document, it is noted:

One of the most concerning findings from our review [here, pdf]was that many companies were not transparent about their compliance with the Code. Several companies in our sample, including some that claimed full compliance with the Code, on further investigation had not acknowledged departure from one or more Provisions of the Code .... We were disappointed with the quality of the explanations provided by companies for non-compliance with the Provisions of the Code and struggled to find robust explanations. Our sample identified 74 cases of non-compliance with the Code, but we found only four explanations that we considered high quality and offered an insight into the companies’ approach to good governance. The majority of explanations were inadequate, and in one instance, not given at all".

UK: Administration - pre-pack sales to connected parties - draft legislation before Parliament

A draft of the secondary legislation - The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 - that will introduce mandatory, independent scrutiny for certain pre-pack administration sales, is currently before Parliament. The (draft) explanatory memorandum, available here (pdf), states (para. 6.1): 

This instrument imposes conditions that must be satisfied before an administrator of a company in administration is able to make a substantial disposal of company property to a person who has a connection with the company. The conditions are that the company’s creditors must have considered and approved the proposed disposal, or, alternatively, that an independent and suitably-qualified person has provided a report to the administrator which considers whether the proposed disposal is reasonable in the circumstances. The instrument also requires that, if the report concludes that the proposed disposal is not reasonable, this must be disclosed to the company’s creditors".

The Regulations are subject to the draft affirmative procedure and their progress can be followed here. 

UK: England and Wales: the reflective loss principle and former shareholders

Judgment was delivered yesterday by Sir Nigel Teare, sitting as a judge of the High Court, in Allianz Global Investors GmbH & Ors v Barclays Bank Plc & Ors [2021] EWHC 399 (Comm). I note the decision here because of the discussion it contains of the rule against reflective loss, most recently considered by the UK Supreme Court in Sevilleja v Marex Financial Ltd (Rev 1) [2020] UKSC 31. The trial judge held that the rule against reflective loss - sometimes called the rule in Prudential Assurance Co. Ltd v Newman Industries [1982] Ch. 204 - did not bar claims by former shareholders against third parties for damages in respect of losses that had been transferred or passed on to them by the company. The context was, the trial judge noted, one where the company would not be expected to be dealing with a claim for compensation in respect of those losses. 

UK: FTSE board diversity - fifth and final report from the Hampton-Alexander Review

The Hampton-Alexander Review published its fifth and final report today. The report notes that the voluntary target set five years ago - for women to occupy a third of FTSE100, 250 and 350 board positions by the end of 2020 - has been met. A copy of the report is available here (pdf) and a press release is available here (pdf). A press release from the Department for Business, Energy and Industrial Strategy has also been published: see here.

UK: FRC updates its principles for the operational separation of the audit practices of the ‘Big 4’

The Financial Reporting Council today published updated principles in respect of the operational separation of the audit practices of the Big 4: see here (pdf). The FRC also confirmed that, having reviewed these firms' implementations plans, it was content for them to move to the next stage of implementation: see here.

UK: directors' duties, delegation and oversight - a view from the Judicial Committee of the Privy Council

The Judicial Committee of the Privy Council delivered its opinion today in Byers v Chen (British Virgin Islands) [2021] UKPC 4: see here or here (pdf). The case concerned a claim by liquidators against a former director of a company. Of particular interest is what the Board had to say about directors' duties (at para. [92]): 

It has been held in a number of cases, correctly, in the Board’s opinion, that a director may not knowingly stand by idly and allow a company’s assets to be depleted improperly: see, for example, Walker v Stones [2001] QB 902, at 921D-E per Sir Christopher Slade; Neville v Krikorian [2006] EWCA Civ 943; [2007] 1 BCLC 1, paras 49-51 per Chadwick LJ; Lexi Holdings v Luqman [2007] EWHC 2652 (Ch), paras 201-205 per Briggs J (as he then was). To the contrary, a director who knows that a fellow director is acting in breach of duty or that an employee is misapplying the assets of the company must take reasonable steps to prevent those activities from occurring".

Singapore: special resolution required to voluntarily wind-up company, Court of Appeal rules

In holding that a special resolution of the members was required, the Court of Appeal - in Superpark Oy v Super Park Asia Group Pte Ltd [2021] SGCA 8, available here (pdf) - rejected the argument that a third route was available in addition to the two circumstances outlined within section 290(1) of the Companies Act. The court stressed the "substantial and meaningful" distinction between compulsory and voluntary winding-up - a distinction that, in its view, would be elided if a company's creditors were able to do away with the requirement for the members of the company to have passed a special resolution for voluntary winding up as required by section 290(1).

Note: section 290(1) has been replaced by a provision expressed in largely identical terms: section 160 of the Insolvency, Restructuring and Dissolution Act 2018, which came into force on 30 July 2020.

UK: England and Wales: directors, bribery and section 176 of the Companies Act 2006

Judgment was delivered yesterday in Kings Security Systems Ltd v King & Anor [2021] EWHC 325 (Ch). While first instance, it is nevertheless noteworthy for the trial judge's discussion of whether the introduction of section 176 ("Duty not to accept benefits from third parties") of the Companies Act 2006 had removed the availability of tort based claims against a director in respect of bribery. The trial judge, Andrew Lenon QC, held that section 176 did not have this effect, observing that if section 176 had indeed removed the ability to bring such claims:

.... the liability of the briber and the liability of the bribed director would be governed by different rules. In the absence of clear words, I do not consider that this was the intention of the legislator. Even if the effect of section 170(3) is to substitute the general duties for the tort of bribery ... section 170(4) provides that 'the general duties shall be interpreted and applied in the same way as common law rules or equitable principles, and regard shall be had to the corresponding common law rules and equitable principles in interpreting and applying the general duties.' The law relating to bribery therefore remains relevant. Advancing a separate cause of action in bribery where there are grounds for claiming a breach of section 176 of the 2006 Act may, however, add nothing more than colour". 

UK: Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021

A draft of the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Change of Expiry Date) Regulations 2021 was laid before Parliament on 11 February under the affirmative procedure. The accompanying (draft) explanatory memorandum - available here (pdf) - explains the purpose of the Regulations as follows (para. 7.1): 

This instrument extends the expiry date of the period during which the power in section 20 [of the Corporate Insolvency and Governance Act 2020] can be used, from 30 April 2021 to 29 April 2022. The section 20 power enables the Secretary of State to make regulations temporarily modifying corporate insolvency or governance legislation for various purposes in connection with mitigating the impact of coronavirus. An example of a previous exercise of this power is the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020/1349. 

Further information is also available in the announcement made earlier this week by the Department for Business, Energy and Industrial Strategy: see here. 

Jersey: Royal Court considers shareholder remedies

I note, a little belatedly, an important judgment of the Royal Court (Samedi division) on shareholder remedies from earlier this year: Financial Technology Ventures II (Q) LP and Ors v ETFS Capital Limited and Tuckwell [2021] JRC025.  The judgment contains a detailed exposition of the principles concerning the unfair prejudice remedy (Article 141(1) of the Companies (Jersey) Law 1991) and winding-up on just and equitable grounds (Article 155(1)), drawing heavily on (non-binding) English authorities.

The court (Deputy Bailiff MacRae and Jurats Olsen and Christensen) accepted that the company's affairs had been conducted in an unfairly prejudicial manner in respect of the actions taken by the company's founder and chairman, who held (directly or indirectly with his wife) 58% of the company's issued share capital. These actions - described by the court as being part of a scheme designed to drive the plaintiffs out of the company - included those designed to secure the removal of independent directors and unilaterally changing the business of the company.

UK: FRC publishes 21/22 draft plan, strategy and budget

A few days ago the Financial Reporting Council published its draft plan, strategy and budget for 2021/22: see here (pdf). Alongside the work being done to create ARGA - the new Audit, Reporting and Governance Authority - the document notes the intention to "[u]ndertake assessments of performance against the UK Corporate Governance Code, the UK Stewardship Code and the Wates Corporate Governance Code for Large Private Companies. Subject to the outcome of Government consultation [a white paper is expected soon, the Financial Times has reported], consult on revisions to the UK Corporate Governance Code and associated guidance ahead of legislation"

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UK: Scotland: unfair prejudice petitions - the reasonable offer and abuse of process

The Court of Session (Outer House) delivered its opinion in Cheyne and Cheyne v Cheyne Engineering Ltd and Balmoral Group Holdings Ltd [2021] CSOH 17 last week. This is an important decision on the operation in Scotland of the unfair prejudice remedy - sections 994 to 996 of the Companies Act 2006 - because of the confirmation it provides of the court's power to dismiss an unfair prejudice petition as an abuse of process where a reasonable offer has been made for the petitioner's shares.  To quote Lord Ericht (at para. [57]): 

The unfair prejudice provisions in the Companies Act 2006 apply in both Scotland and England. The remedies given are equitable, and the court has a wide discretion. In these circumstances it seems to me that it is inherently desirable that there is consistency between the approach of the Scottish and English courts. Accordingly, in my opinion, where the respondent to an unfair prejudice petition makes a reasonable offer which gives the petitioner all the remedy which the petitioner could realistically expect to obtain, and the petitioner refuses the offer and continues with the litigation, it is competent in Scotland for the court to dismiss the petition as an abuse of process. I reserve my opinion as to whether dismissal for abuse of process for refusal of an offer would be competent in Scotland in any petition or action other than an unfair prejudice petition". 

UK: England and Wales: Supreme Court on parent company liability for actions of subsidiary companies

A belated (and overdue) return to the blog, to report the delivery today, by the Supreme Court, of its judgment in Okpabi v Royal Dutch Shell Plc [2021] UKSC 3: see here or here (pdf).  A summary of the judgment is available here (pdf). 

The Supreme Court unanimously held that the Court of Appeal (in [2018] EWCA Civ 191) had erred in law in several respects, thereby opening the way for the claim to be brought in England against the UK incorporated parent company in respect of environmental harm caused by a Nigerian subsidiary.  It was wrong, the Supreme Court held, to approach the question of whether a parent company owed a duty of care in respect of the conduct of its subsidiaries by reference to any generalised assumption or presumption. Moreover, the Court of Appeal had focused unduly on the question of control by the parent company; what mattered, the Supreme Court stated, was the extent to which the parent took over, or shared with the subsidiary, the management of the relevant activity (something that control by the parent might demonstrate, but not necessarily).  The Supreme Court also held that, to the extent that the Court of Appeal had suggested that the parent company's promulgation of group wide policies or standards could never in itself give rise to a duty of care, that was inconsistent with Lungowe v Vedanta Resources plc [2019] UKSC 20.

An oral summary of the Supreme Court's decision was delivered by Lord Hamblen: see below. 

UK: The Sanctions and Anti-Money Laundering Act 2018 (Commencement No. 2) Regulations 2020

The Sanctions and Anti-Money Laundering Act 2018 (Commencement No. 2) Regulations 2020 were made yesterday: see here or here (pdf). The Regulations bring into force certain provisions of the Sanctions and Anti-Money Laundering Act 2018 when the transition period ends; they also bring into force, today, section 51 ("Public registers of beneficial ownership of companies registered in British Overseas Territories"). Section 51 requires, amongst other things, that the Secretary of State should, no later than 31 December 2020, prepare a draft Order in Council requiring the government of any British Overseas Territory that has not introduced a publicly accessible register of the beneficial ownership of companies within its jurisdiction to do so. Other provisions are brought into force on IP completion date.

Europe: company law and corporate social responsibility

The European Commission has recently published a study - commissioned by the Policy Department for Citizen's Rights and Constitutional Affairs - that provides an overview of national CSR policies and legislation within several Member States (France, Germany, Italy, the Netherlands, Poland and Spain) with a particular focus on due diligence. The study - available on the European Parliament's Think Tank (contract, commercial and corporate law) - can be downloaded directly here (pdf).

UK: Government consultations: corporate directors; the companies register and registrar powers

As part of the Government's corporate transparency and register reform programme, three consultations were published last week: [1] information on the register; [2] the powers of the registrar; and [3] prohibiting corporate directors. With the third consultation paper, the Government has said that it intends to implement the framework within section 87 of the Small Business, Enterprise and Employment Act 2015 which provides for a prohibition, with certain exceptions, on corporate directors. The consultation seeks views on the scope of these exceptions.

UK: England and Wales: fiduciary liability - account of profits and causation

Judgment was given by the Court of Appeal yesterday in Gray v Global Energy Horizons Corporation [2020] EWCA Civ 1668. The decision is noteworthy because of what is said about the equitable claim for an account of profits and the extent to which - if at all - causation is an essential element.  The court unanimously observed (paras. [126] and [127]):  

.... the basic equitable rule is indeed a stringent one which requires an errant fiduciary to account to his principal for all unauthorised profits falling within the scope of his fiduciary duty. The rule is intended to have a deterrent effect, and to ensure that no defaulting fiduciary can make a profit from his breach of duty. It does not matter if the result is to confer a benefit on the principal which the principal would otherwise have been unable to reap ... It follows, in our view, that the doctrine of unjust enrichment has, at best, only a subsidiary role to play in limiting the liability of a fiduciary to account.  We are here concerned with the obligation of a defaulting fiduciary to account for unauthorised profits, not with compensation for an equitable wrong, and still less with an independent cause of action in restitution to reverse an unjust enrichment of the defendant at the expense of the claimant ... the liability of a defaulting fiduciary to account for unauthorised profits is a strict one, which has always been jealously enforced by courts of equity. There needs to be some link or nexus between the breach of duty proved and the profits for which an account is ordered, such that there is a “reasonable relationship” between them (as Lewison J said in the Ultraframe case).  But the link or nexus does not need to be of a causal character. It will normally be sufficient if the profit arose within the scope of the defaulting fiduciary’s conduct in breach of duty". 

UK: The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2020 were laid before Parliament yesterday and come into force on 31 December: see here or here (pdf). The accompanying explanatory memorandum, available here (pdf), explains the purpose of the Regulations as follows: "to extend the duration of the temporary measures restricting the use of statutory demands and winding up petitions introduced by the Corporate Insolvency and Governance Act 2020 [as amended by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020/1031] ... beyond their current expiration date of 31 December 2020. This instrument extends these measures to 31 March 2021". 

Canada: CSA consultation on activist short-selling

The Canadian Securities Administrators have published a consultation paper on the topic of activisit short-selling: see here (pdf). Activist short-selling is defined for the purposes of the paper as "instances where an individual or entity takes a short position in a security and then makes a public statement, issues a report, or otherwise publicly shares information or analysis that is likely to have a negative effect on the price of the security". The paper seeks views on a wide range of matters, including perceptions of activity short-selling: consultees are asked, for example, to provide examples of conduct associated with activist short-selling campaigns regarded as problematic, and to identify any perceived weaknesses in regulation and enforcement.

UK: Government consultation on corporate liability for economic crime - an update

In January 2017, the Government published a call for evidence in respect of the law on corporate liability for economic crimes: see here (pdf). Last month, the Government published its response: see here (pdf). The Government has concluded - in the light of insufficiently strong evidence of the need for reform in consultee responses, and the need to take account of more recent reforms - that it is not appropriate to proceed with legislative reform immediately. Instead, as already noted on this blog, the Law Commission has been asked to review the law on corporte criminal liability.

Canada: companies, the Charter of Rights and protection from cruel and unusual treatment or punishment

It is, I hope, not too late to note a judgment of the Supreme Court handed down at the start of last month: Quebec (Attorney General) v. 9147-0732 Québec inc., 2020 SCC 32. The court held that section 12 of the Canadian Charter of Rights and Freedoms, which provides that "Everyone has the right not to be subjected to any cruel and unusual treatment or punishment" did not apply to companies.  The Court of Appeal had, by majority, held that section 12 did apply to companies. A summary of the Supreme Court's judgment is available here. 

UK: Treasury consultation: a special administration regime for payment and electronic money institutions

HM Treasury has, today, published a consultation paper in respect of a proposal to introduce a special administration regime for payment institutions (PIs) and electronic money institutions (EMIs): see here (pdf). To quote directly from the consultation paper (paras. 1.4 and 1.5):

.... there is evidence that the existing insolvency process for PIs and EMIs is suboptimal with regards to consumers. Recent administration cases involving PIs and EMIs have taken years to resolve in some cases, with customers left without access to their money for prolonged periods and receiving reduced monies after the cost of distribution. In six recent cases of PIs and EMIs in insolvency proceedings (of which three started in 2018), only one has so far returned funds to customers.  The Government is therefore proposing to introduce changes that will help protect customers in the event of a PI or EMI being put into insolvency. As these changes can be delivered relatively quickly and could mitigate harms from any future insolvencies, the Government believes it is appropriate to progress these changes before the conclusion of the Payments Landscape Review is published".

UK: FRC research - audit committee chairs and audit quality

The Financial Reporting Council has published the results of qualitative research exploring audit committee chairs' views on, and approach to, audit quality: see here (pdf). The accompanying press release, available here, carries the headline "New research supports introduction of standards for Audit Committees" but readers of the report might think that other findings are more significant, including, for example, one of the key themes to emerge: that audit committee chairs had different views on, and approaches to, audit quality. Another theme was a lack of shareholder interest in audit matters (other issues, such as remuneration, were identified as being more important).