Monday 30 June 2014

Malaysia: Launch of the Malaysian Code for Institutional Investors

The Securities Commission and Minority Shareholder Watchdog Group have launched the Malaysian Code for Institutional Investors: see here (pdf). The Code was developed by Malaysia's largest institutional investors and contains principles designed to promote effective stewardship.

UK: Law Commission publishes trade and industry statute law repeal proposals

The Law Commission, as part of its statute law repeals work, has proposed the repeal of legislation within the field of trade and industry, including the Companies Act 1947: see here (pdf).

Friday 27 June 2014

UK: PRA consults on implementing the FPC recommendation on loan to income ratios in mortgage lending

The Prudential Regulation Authority published a consultation paper yesterday setting out how it proposes to respond to the recommendation made by the Financial Policy Committee that mortgage lenders limit the number of mortgage loans made at or greater than 4.5 times LTI to no more than 15% of their overall number of mortgage loans: see here (pdf).

UK: Glencore announces appointment of female non-executive director

Glencore yesterday announced the appointment of a new non-executive director - Patrice Merrin - and in doing so brought to an end its position as the last FTSE100 company without female representation on its board: see here.

Thursday 26 June 2014

UK: Small Business, Enterprise and Employment Bill 2014-15 introduced in Parliament

The Small Business, Enterprise and Employment Bill 2014-15 was introduced in Parliament yesterday and received its First reading: see here. Second reading is scheduled to begin today. A copy of the Bill, as introduced, is available here or here (pdf). Explanatory notes are available here or here (pdf). Further materials, including impact assessments, have been published by the Department for Business, Innovation and Skills: see here.

The Bill contains a wide range of provisions, including those for the establishment of a register of those with significant control over companies. It will also introduce a new general rule that company directors must be natural persons (at present, under section 155 of the Companies Act 2006, companies can act as a director of a company where that company has at least one director that is a natural person). This general rule can, however, be subject to exceptions determined by the Secretary of State.

Ireland: Company Law Review Group publishes 2013 annual report

The Company Law Review Group has published its annual report for 2013: see here (pdf). This provides an update on the work of the Group over the past few years as well as a useful overview of the Companies (Miscellaneous Provisions) Act 2013.

Wednesday 25 June 2014

Hong Kong: reforming the regulatory regime governing listed entity auditors

The Financial Services and Treasury Bureau has launched a consultation on proposals to reform the regulatory regime for listed entity auditors, the purpose of which is to introduce greater independence and to bring the regime into line with international standards and practices. For further information see the consultation paper (English, pdf) and FAQs (Chinese, pdf).

Tuesday 24 June 2014

Japan: TSX to develop new corporate governance code

The Japanese Government has formally announced plans to introduce a new corporate governance code, as part of a Japan Revitalisation Strategy: see here (pdf). The Code will be developed by the Tokyo Stock Exchange and will operate on the basis of comply or explain (the Exchange already has its own governance principles for listed companies: see here). It is expected to take effect next year. New disclosure obligations will also be introduced for listed companies, from March 2015, in respect of the number of women occupying executive positions.

Isle of Man: Limited Liability Companies (Amendment) Bill 2013 receives Royal Assent

The Limited Liability Companies (Amendment) Bill 2013 received Royal Assent on 17 June: see here (pdf, at line 4332). A copy of the Act is not yet available but a copy of the Bill as introduced is available here (pdf) and explanatory notes are available here (pdf). The new Act will make it possible to form single member limited liability companies on the Isle of Man.

Note also: a copy of the Foreign Companies Act 2014, which became law earlier this year, has been published on the Isle of Man legislation website: see here (pdf).

UK: supporting the development of credit unions - call for evidence

HM Treasury has issued a call for evidence seeking views on what the Government should do to support the development of the credit union movement: see here.

Monday 23 June 2014

UK: FCA policy statement - addressing failings in standards, governance and culture

The Financial Conduct Authority has published a policy statement in which it set outs how it will use it powers, as part of its supervisory approach, to address firms' failures in standards, governance and culture: see here (pdf). The statement includes examples of how the FCA has intervened where governance failures have been identified and it also explains the operation of the FCA's new enhanced supervision regime.

UK: The Companies (Striking Off) (Electronic Communications) Order 2014

The Companies (Striking Off) (Electronic Communications) Order 2014 was laid before Parliament last week and comes into force on 11 July. Amongst other things, the Order amends the Companies Act 2006 in order to permit the registrar to send by electronic means a notice of strike off to a company not believed to be trading. A letter sent by post is currently required. Further information is available in the accompanying explanatory memorandum: see here (pdf).

Friday 20 June 2014

UK: PRA statement of policy - the use of powers to address serious failings in the culture of firms

The Prudential Regulation Authority has published a policy statement concerning the use of its powers to address serious failings in the culture of firms: see here (pdf). The statement explains that the PRA considers a variety of factors to identify failings in culture, including governance, incentives, risk awareness, and the ability to challenge senior management. It also provides some examples of the governance changes the PRA has required firms to make, or which firms have voluntarily agreed to make, including requiring a firm to put in place appropriate governance structures and committees to oversee regulatory concerns about meeting regulatory requirements.

Thursday 19 June 2014

Europe: EBA consults on remuneration disclosure guidelines

The European Banking Authority has begun a consultation on proposed guidelines concerning the information that institutions in the EU banking sector should disclose under Part Eight of the Capital Requirements Regulation (No 575/2013): see here.

Wednesday 18 June 2014

Australia: the meaning of 'non-executive director'

A few days ago, Dixon J., sitting in the Supreme Court of Victoria (Common Law Division), gave judgment in Jaques v AIG Australia Ltd [2014] VSC 269. The decision is noteworthy because of the discussion it contains of the meaning of 'non-executive director', the judge noting that in "... contemporary corporate governance theory, the role of independent, non-executive directors is encouraged" (para. 15).

Ireland: Companies Bill 2012 in the Seanad Éireann - second reading received and committee stage begins

The Companies Bill 2012, which was passed by the Dáil Éireann earlier this year, has begun its progress through the Seanad Éireann. A few days ago it received its second reading - see here - and yesterday the Committee stage began: see here. The amendments being considered at Committee stage are available here (pdf).

A copy of the Bill as passed in the Dáil Éireann is available: see volume one (parts 1 to 15) (pdf) and volume two (parts 16 to 25 and schedules) (pdf).

Netherlands: Monitoring Committee starts evaluation of Dutch corporate governance code

The Dutch Corporate Governance Code Monitoring Committee has begun an evaluation of the Dutch corporate governance code. Further information, in Dutch, is available here.

Tuesday 17 June 2014

UK: ICAEW asks - how diverse should boards be?

The ICAEW has published a fourth paper - titled 'How diverse should board be?' - as part of its Dialogue in Corporate Governance: see here (pdf).

Europe: ESMA's 2013 annual report published

The European Securities and Markets Authority has published its annual report for 2013, providing - in one place - a useful overview of its activities and future plans: see here (pdf).

Japan: panel recommends creation of national corporate governance code

The panel formed to make recommendations for vitalising Japan's financial and capital markets has published further recommendations, building on those published last year: see here (pdf). The panel recommendations the creation of a national corporate governance code (there are governance principles for companies listed on the Tokyo Stock Exchange) and work to develop and promote the recently published stewardship code.

Monday 16 June 2014

Russia: new corporate governance code and listing rules

Earlier this year the Central Bank of Russia approved a new edition of the Russian corporate governance code: see here (pdf). The code was drafted with the assistance of the European Bank for Reconstruction and Development. An English translation of the code has been produced by the EBRD: see here (pdf). The Moscow Exchange has also made changes to its listing rules concerning the governance of listed companies: see here.

Friday 13 June 2014

Australia: Federal Court upholds liability of credit rating agency

The Federal Court of Australia (Full Court) gave judgment several days ago in ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65. The judgment will be of interest beyond Australia because of the issues before the court, including the liability of credit rating agencies. The court upheld an earlier decision ([2012] FCA 1200) imposing liability on Standard and Poors for a flawed triple AAA rating (the highest it could assign) it had given to a financial instrument issued by ABN Amro.

UK: the operation of wholesale financial markets - review begins

A joint review by HM Treasury, the Bank of England and the Financial Conduct Authority has begun with regard to the operation of wholesale financial markets: see here. The terms of reference are available here.

India: the governance of bank boards - review committee report published

The Reserve Bank of India has published, for public comment, the report of the committee formed to consider the governance of bank boards: see here. Wide-ranging recommendations are made in respect of private and public sector banks, some of which are reflected in new legislation proposed by the Committee (including a Banking Sector Governance Act, a draft of which is included in the report). In particular, a uniform governance framework is proposed for the entire banking sector.

Thursday 12 June 2014

Philippines: amendments made to the revised code of corporate governance

The Philippines Securities and Exchange Commission has made several amendments to its Revised Code of Corporate Governance, including a change to the definition of corporate governance to include recognition of non-shareholder stakeholders: see here (pdf).

Wednesday 11 June 2014

IOSCO consults on good practices on reducing reliance on CRAs in asset management

The International Organization of Securities Commissions has published for consultation a report titled Good Practices on Reducing Reliance on CRAs in Asset Management: see here (pdf). The consultation seeks to identify specific practices to reduce over reliance on external credit ratings; once agreed, the finalised good practices document will be addressed to national regulators, investment managers, and investors.

Singapore: SGX consultation on regulatory framework for secondary listings

SGX has published a consultation paper setting out changes to its regulatory framework governing secondary listings: see here (pdf). The changes are designed, amongst other things, to provide greater clarity in respect of [a] SGX's oversight of secondary listed companies and [b] the review methodology used by SGX in assessing secondary listing applicants.

Tuesday 10 June 2014

UK: Key facts and trends in the accountancy profession

The Financial Reporting Council has today published its annual publication Key facts and trends in the accountancy profession: see here (pdf). The report notes, amongst other things, little change in recent years in the proportion of listed companies audited by the larger audit firms outside of the 'Big four'.

Monday 9 June 2014

UK FRC best practice guidance on the strategic report

The Financial Reporting Council has today published best practice guidance in respect of the preparation of the strategic report: see here (pdf). The guidance is not mandatory but, according to the FRC, is intended to have persuasive force.

Friday 6 June 2014

UK: FRC statement on 'true and fair' view

Section 393 of the Companies Act 2006 provides that the "... directors of a company must not approve accounts ... unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss ...". In a statement published yesterday, the Financial Reporting Council confirmed that this remains "... of fundamental importance in IFRS and UK GAAP, whether embodied in the new standards FRS 100 – 103 or the standards they replace": see here (pdf).

Thursday 5 June 2014

Jersey: Royal Court considers the legal nature of unit trusts

The Royal Court (Samedi division) gave judgment earlier this month in Barclays v Equity [2014] JRC102D. This judgment, which will be of interest beyond Jersey, contains interesting discussion of the legal nature of unit trusts, drawing on academic commentary from England and case law from Australia.

UK: The Queen's Speech - Small Business, Enterprise and Employment Bill

The UK Parliament was opened yesterday, for the final session of the current term, by The Queen. The Queen's speech sets out the Government's legislation programme for the final session. The proposed Small Business, Enterprise and Employment Bill will (amongst other things) provide for the establishment of a public register of company beneficial ownership and make changes to the regime for the disqualification of directors. Consultation on these proposals has already taken place: see here.

Wednesday 4 June 2014

Europe: ESMA publicly censures two credit rating agencies

The European Securities and Markets Authority - the European Supervisory Authority with direct supervisory responsibility for credit rating agencies in Europe - has, for the first time, issued a public notice censuring two credit agencies (Standard & Poor’s Credit Market Services France SAS and Standard & Poor’s Credit Market Services Europe Limited) for breaches of the Credit Rating Agency Regulation (1060/2009): see here (pdf).

Tuesday 3 June 2014

IAASB consults on proposed changes to International Standards on Auditing

The International Auditing and Assurance Standards Board has published for consultation proposed changes to the International Standards on Auditing the purpose of which is to clarify the expectations of auditors when auditing financial statement disclosures: see here.

Monday 2 June 2014

Jersey: States adopt Companies (Amendment No 11) (Jersey) Law 201-

The States of Jersey adopted the Companies (Amendment No 11) (Jersey) Law 201- last month, the purpose of which is to make various changes to the Companies (Jersey) Law 1991: see here or here (pdf). For an overview of the changes, see here (pdf).