Friday 29 October 2021

UK: Supreme Court judgment next week - proprietary claims and priority

The UK Supreme Court has announced that it will hand down its judgment in CPS v Aquila Advisory Ltd [2021] UKSC 49 on 3 November next week. The issues before the court, to quote directly from the summary provided, were these: "Where a proprietary claim is brought by a company against its directors to recover proceeds of crime received in breach of fiduciary duty: (1) Can that proprietary claim be asserted in priority to a confiscation order obtained by the Crown Prosecution Service? (2) Can the illegality of the directors be attributed to the company in circumstances where the company suffered no loss and stood to profit from the crime?"

UK: PRA report - climate change and the regulatory capital framework

The Prudential Regulation Authority has published a report exploring the links between climate change and the regulatory capital framework.  The report concludes that regulatory capital has a role to play in dealing with the consequences - the financial risks - of climate change, but notes that further work design and evaluation work is required.  In this regard, the PRA plans to publish a call for research and host a conference. The aim is to provide more guidance by the end of 2022. A copy of the report, titled Climate Change Adaptation Report 2021 - Climate-related financial risk management and the role of capital requirements, is available here (pdf).

Wednesday 27 October 2021

UK: introducing a corporate re-domiciliation regime - consultation launched

The Government has today - on autumn budget day - published a consultation paper seeking views on the introduction of a corporate re-domiciliation regime: see here (pdf). To quote from the consultation paper (at paras. 2.1 and 2.2): "This [new regime] would enable a company to shift its place of incorporation from one jurisdiction to the UK while maintaining the same legal identity ... Re-domiciliation would therefore enable a company to maximise continuity of its operations while enabling it to shift its place of incorporation. Its corporate history, management structure, assets, intellectual and other property rights, contracts, and regulatory approvals will generally remain intact...".

UK: England and Wales: regulatory action by FCA did not require insolvency court permission

Judgment was given today in Financial Conduct Authority v Carillion Plc [2021] EWHC 2871 (Ch). The question before the court was whether regulatory action by the FCA against a company in liquidation, under section 91 and/or section 123 of the Financial Services and Markets Act 2000, constituted "action or proceeding" such that it required the permission of the insolvency court under section 130(2) ("consequences of winding-up order") of the Insolvency Act 1986. The trial judge, Mr Justice Michael Green, held that such permission was not required. 

Monday 25 October 2021

UK: The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021

The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 were laid before Parliament a few days ago and come into force on 12 November: see here or here (pdf). The accompanying explanatory memorandum is available here (pdf). The Rules provide further detail for the operation of the special administration procedure established in the Payment and Electronic Money Institution Insolvency Regulations 2021

Friday 22 October 2021

UK: FCA permiter report - online harms and fraud

The Financial Conduct Authority has today published its annual permiter report: see here (pdf). Within it, the FCA joins those calling for changes to made to the Government's Online Safety Bill in respect of fraud. The report states (pp. 31-31):
We continue to believe the protection of consumers from illegal online scams would be strengthened through clear legal obligation on platform operators within the Government’s Online Safety Bill (OSB) and that the duties in the OSB should extend to paid-for advertising, as well as user-generated content. We also hope that the OSB can be amended to designate content relating to fraud offences as ‘priority’ illegal content and so require monitoring and preventative action by platforms".

Wednesday 20 October 2021

UK: England and Wales: insolvency - the rule against double proof and a novel situation

The Court of Appeal gave judgment today in Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings Plc & Ors [2021] EWCA Civ 1523. The decision is noteworthy because of the way in which the court, in the novel situation before it, developed the rule against double proof - sometimes known as the rule against double dividend: see Lord Walker in Re Kaupthing Singer and Friedlander Ltd [2011] UKSC 48

As Lord Justice Lewison explained (para. [172]): "Where (a) the surety has paid part of the debt owed by the principal debtor to the creditor and (b) the surety has given up any right to indemnity from the principal debtor, with the consequence that he has no entitlement to prove for anything, then the creditor must give credit for the payment in the insolvency of the principal debtor. It is the second condition that makes all the difference. There is nothing in the Insolvency Rules which deals with the rule against double proof. Consequently I do not consider that a modest development of the rule intrudes upon legislative competence".

And, as Lady Justice Asplin added (para. [178]): "I too consider, instinctively, that if a surety pays part of a guaranteed debt, and releases his right of indemnity from the principal debtor, the amount which the creditor is entitled to recover in the principal debtor’s insolvency must be reduced as a result of the payment and as a result, the creditor can only prove in the principal debtor’s estate for the lesser sum".

Tuesday 19 October 2021

UK: Government publishes "Greening Finance: A Roadmap to Sustainable Investing"

Yesterday the Government published "Greening Finance: A Roadmap to Sustainable Investing": see here (pdf). The document sets out the Government's plans for the creation of a new integrated framework for sustainability disclosures - to be known as Sustainability Disclosure Requirements (SDR) and building on proposals published earlier this year, for consultation, requiring mandatory TCFD aligned climate-related financial disclosures by certain companies.  

The new framework contains three components: (1) corporate disclosure requirements, to be made with reference to international standards and a new UK "green taxonomy"; (2) asset manager and asset owner disclosure requirements; and (3) investment product disclosure requirements, including the introduction of a sustainable investment labelling regime. A summary is available here

Monday 18 October 2021

Jersey: a new definition of "prospectus"

The Companies (Amendment of Law) (No. 2) (Jersey) Order 2021 comes into force tomorrow (19 October). The Order amends the Companies (Jersey) Law 1991 in order to provide a new definition for "prospectus", bringing the Jersey prospectus regime closer to that found in the UK. The change was the subject of a consultation earlier this year (about which see here, doc). 

Saturday 16 October 2021

Austria: 2021 edition of Corporate Governance Code

Rather belatedly (again), I note the publication of the 2021 edition of the Austrian Corporate Governance Code, available (in English) here.

Greece: the 2021 edition of the Hellenic Corporate Governance Code

Rather belatedly, I note that a new edition of the Hellenic Corporate Governance Code was published earlier this year by the Hellenic Corporate Governance Council. A copy, in English, is available here.

Wednesday 13 October 2021

BCBS: Basel III monitoring report published

The Basel Committee on Banking Supervision has published the latest edition of its Basel III monitoring report: see here or here (pdf). The report, based on data from December 2020, notes that banks have (on average) improved their capital and liquidity ratios. 

Tuesday 12 October 2021

UK: Secondary Capital Raising Review - terms of reference and call for evidence

The terms of reference for the UK Secondary Capital Raising Review were published today alongside a call for evidence: see, respectively, here (pdf) and here (pdf). An short overview is also available in the HM Treasury press release.

Monday 11 October 2021

South Africa: DTIC consultation - draft Companies Amendment Bill, 2021

The Department of Trade, Industry and Competition is seeking views on the draft Companies Amendment Bill, 2021: see here. Amongst the many proposed changes are those concerning the disclosure of directors' remuneration and the role of shareholders in approving remuneration policy.

UK: FCA expectations of firms - remote and hybrid working

The Financial Conduct Authority has, today, set out (in a non-exhaustive way) its expectations of firms in respect of remote and hybrid working: see here.

UK: FRC calls for greater transparency over use of alternative performance measures

The Financial Reporting Council has advised, following the conducting of a thematic review, that UK listed companies need to be more transparent in respect of their use of alternative performance measures: see here (pdf).