Japan: new edition of the Stewardship Code published

Following a consultation earlier this year, the Council of Experts on Japan’s Stewardship Code has now published a final version of its updated Stewardship Code: see here. An English translation of the new Code is available here (pdf). A copy of the Code, in English, highlighting the changes made is available here (pdf).

EU: ECB guidance on 'fit and proper' assessments

The European Central Bank has published a guide on the 'fit and proper' assessments that it undertakes in respect of board members (whether management or supervisory) for those institutions under its direct supervision: see here (pdf). This role forms part of the ECB's supervisory activities under Article 4(1)(e) of the SSM Regulation (Regulation (EU) No 1024/2013).

Jersey: the Bank (Recovery and Resolution) (Jersey) Law 2017

A copy of the Bank (Recovery and Resolution) (Jersey) Law 2017 has been published: see here or here (pdf). The Law was adopted by the States in February and sanctioned by Order of Her Majesty in Council earlier this month: see here (pdf). As its title suggests, the new Law sets out the framework for dealing with failing banks (or those likely to fail) and provides for the creation of the Jersey Resolution Authority.

Isle of Man: The Beneficial Ownership Act 2017

The Beneficial Ownership Act 2017 received Royal Assent last month. The Act - available here (pdf) - replaces the Companies (Beneficial Ownership) Act 2012 (here, pdf). An overview of the new Act is available here. In very general terms, the Act sets out the framework whereby details of those controlling more than 25% of the beneficial ownership of a company are held in the Isle of Man database of beneficial ownership.

EU: Landeskreditbank fails in its challenge of the ECB's direct supervisory oversight

Earlier this month the General Court of the European Union gave its judgment in Landeskreditbank Baden-Württemberg ‒ Förderbank v ECB (Case T-122/15). The General Court - sitting in extended composition - dismissed Landeskreditbank's action in which it had challenged the decision of the European Central Bank to classify it as a significant entity (and, therefore, one that fell under the direct supervision of the ECB through the single supervisory mechanism). A summary is available here (pdf).

EU: Shareholder Rights Directive published in the Official Journal

The new Shareholder Rights Directive (Directive (EU) 2017/828), amending Directive 2007/36/EC, has now been published in the Official Journal of the European Union: see here. For further information about the changes being made, see here.

Jersey: Limited Liability Partnerships (Jersey) Law 2017

A copy of the revised framework governing limited liability partnerships in Jersey - the Limited Liability Partnerships (Jersey) Law 2017 - has recently been published on the Jersey Legal Information Board's website: see here.

Ireland: CLRG publishes annual report

The Company Law Review Group has published its annual report: see here (pdf). The annual report says that, in the coming months, the Group will publish a report into possible protections for company employees and unsecured creditors.  It is also said that the Group's current review of the enforcement of company law is at an advanced stage (a discussion document has been considered by the Group and a final report for publication is underway).

Japan: TSX white paper on the corporate governance of listed companies

The Tokyo Stock Exchange has published the latest edition of its corporate governance white paper: see here (pdf). The white paper - that is what it is called in the English version, although it's not a white paper in the more traditional sense that this term is used in the UK - presents a very comprehensive analysis of listed companies' corporate governance practices as well their compliance with the 2015 corporate governance code.

UK: Corporate governance and the Conservative Party's manifesto

The Conservative Party published its election manifesto today: see here (pdf). This sets out several commitments concerning corporate governance - under the banners of "fairer corporate governance" and "better corporate governance" - that we can expect to see in a white paper when/if the Party is re-elected to Government (if the election had not been called, it's likely that we would have had the white paper by now, following on from the green paper last autumn). There are also commitments to reform the rules on takeovers and mergers.

With regard to governance, there appears to be a commitment to introduce through legislation an annual binding vote on remuneration (the wording in the manifesto is not as clear as it could be); it is also said that companies will be required to publish pay ratios. Change to the law is also promised to require listed companies to introduce a mechanism for greater employee voice on the board. Several options for achieving this are given including having an employee nominated director, creating an employee advisory council or assigning responsibility for employee representation to one of the non-executive directors. There is also a pledge to consult on how to strengthen the governance of private companies.

EU: Commission begins company law consultation

The European Commission has begun a consultation seeking views on how to promote the use of online tools throughout a company's life, as well as the problems that currently exist in cross-border restructuring and operations (including conflict of law rules): see here.

UK: 'Strengthening accountability' - PRA publishes updated policy statements

The Prudential Regulation Authority has published updated supervisory statements in respect of the accountability framework for banking and insurance (including the Senior Managers and Certification regime): see here.

Pakistan: Senate passes the Companies Bill, 2017

The SECP has announced that Senate has approved the Companies Bill, 2017: see here (pdf). This follows approval from the Senate Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Privatization earlier this month and approval from the National Assembly in February. The Bill, once enacted and in force, will replace the Companies Ordinance, 1984.

Update (1 June 2017) - the Bill has become law: see here.

UK: Pre-Pack Pool publishes its first annual report

The Pre-Pack Pool has published its first annual report: see here (pdf). The Pool was launched in November 2015, in response to one of the key recommendations in the Graham Review. The Pool was set up to provide  an independent review of proposed connected party pre-pack transactions before they are completed, thereby providing an assurance for creditors.

The report notes that between 1 November 2015 and 31 December 2016, the Pool received for review 53 proposed connected party pre-pack purchases. The majority of these received a 'not unreasonable' opinion; six received a 'case not made' opinion. The report also notes that the number of pre-packs has fallen faster than the overall decline in administrations, and that the number of connected party purchases has also fallen.

Australia: extending crowd-sourced equity funding to proprietary companies

The Treasury is seeking views on draft legislation the purpose of which is to extend crowd-sourced equity funding to proprietary companies. A copy of the Corporations Amendment (Crowd-Sourced Funding for Proprietary Companies) Bill 2017 is available here (pdf). An explanatory memorandum is available here (pdf) and further background information is available here.

Bhutan: the Companies Act 2016 and the pursuit of gross national happiness

A copy (in English) of the Companies Act 2016, which contains Bhutan's new company law framework, is now available: see here (pdf). The influence of the UK's Companies Act 2006 can be seen: compare, for example, sections 161 and 162 of the 2016 Act with section 172 of the UK's Companies Act 2006. The differences between the UK and Bhutan become apparent, however, when looking at section 163 of the 2016 Act, which requires (to quote the English translation), the establishment of "...a Code of Conduct for the governance of companies which shall promote those conditions that will enable the pursuit of Gross National Happiness in accordance with Article 9, section 2 of the Constitution of the Kingdom of Bhutan".

New Zealand: new edition of the NZX corporate governance code published

NZX has published an updated edition of its corporate governance code: see here (pdf). The Code will apply to all NZX Main Board listed issuers for reporting periods ending on and after 31 December 2017. For further information, see here and here.

Thailand: SEC publishes new governance code and new code for institutional investors

Earlier this year the Securities and Exchange Commission published a new edition of its Corporate Governance Code for Listed Companies as well as a new Investment Governance Code for Institutional Investors: see, respectively (both in English), here (pdf) and here. It is interesting to note the emphasis placed upon innovation and responsible business in the governance code. The new code for institutional investors contains most (if not all) of the principles that are becoming commonplace in such codes (e.g., disclosure; monitor and engage; have policies on engagement and the exercise of voting rights; manage conflicts of interest; act collectively where appropriate).

Europe: freedom of establishment and cross-border conversions

Advocate-General Kokott delivered her opinion last Thursday in Polbud-Wykonawstwo sp. z o.o., in liquidation (Case C-106/16). The provisional text of the opinion is available here.

The case concerned a Polish private limited company that wanted to transfer its legal seat to Luxembourg. The mechanism for doing so under Polish law required the company to be removed from the Polish commercial register, the process for which also demanded that the company was wound-up.  Did this requirement for winding-up undermine freedom of establishment under the Treaty on the Functioning of the European Union?  Yes, according to the Advocate-General; to quote directly from her opinion:

"In the case where a company incorporated under the law of one Member State has actually established itself, or intends to establish itself, in another Member State for the purpose of carrying on genuine economic activity there, and converts itself into a company governed by the law of the latter Member State, the application of national legislation under which the removal of that company from the commercial register of the Member State of origin is subject to the condition that that company must first be wound up after having been liquidated restricts the freedom of establishment".

UK: The Criminal Finances Act 2017

A copy of the Criminal Finances Act 2017, which became law last month, has now been published: see here or here (pdf). Part 3 contains two new corporate offences: the failure to prevent the facilitation of UK tax evasion offences (section 45); and the failure to prevent the facilitate of foreign tax evasion offences (section 46). It is for the Treasury to determine when Part 3 will be brought into the force (section 58).

Germany: new edition of governance code published in Federal Gazette

A copy of the new edition of Germany's Corporate Governance Code has been published in the Federal Gazette: see here and here (pdf). An English translation will be available soon. For background information about the new Code, see here.

Pakistan: Companies Bill, 2017 approved by Senate Standing Committee

The Senate Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Privatization has approved, with changes, the Companies Bill, 2017. The Bill, which was passed by the National Assembly in February, now requires Senate approval. Further information is available in an announcement from the SECP: see here (pdf). The Bill, once enacted and in force, will replace the Companies Ordinance, 1984.

Update (1 June 2017) - the Bill has become law: see here.

BCBS publishes twelfth update on Basel III implementation

The Basel Committee on Banking Supervision has published its twelfth update on the implementation of the Basel III regulatory reforms: see here (pdf). The update notes, amongst other things, that all of the 27 jurisdictions comprising the Basel Committee have final risk-based capital rules, LCR regulations and capital conservation buffers in force.

UK: FCA policy statement (and final rules) - remuneration in CRD IV firms

The Financial Conduct Authority has published a policy statement explaining the changes its has made to its Handbook in order to implement guidelines from the European Banking Authority on the implementation of the remuneration requirements in the Capital Requirements Directive IV: see here (pdf).

FSB publishes thematic peer review report of corporate governance

The Financial Stability Board has published the results of its thematic peer review of corporate governance, looking at the implementation of the G20/OECD Principles of Corporate Governance by FSB member jurisdictions: see here (pdf). The report makes twelve recommendations, including enhancing the effectiveness of whistle-blowing and the policies that protect whistle-blowers.

UK: Scotland: good college governance consultation paper

The Scottish Government has published Good College Governance, a consultation paper in which it seeks views on two of the recommendations made in the College Good Governance Task Group Report: see here (pdf).