Tuesday 28 June 2022

Mongolia: Revised Code published by the Financial Regulatory Commission

A new edition of the Mongolian corporate governance code has recently been published by the Financial Regulatory Commission: see here.

Germany: New Code takes effect following Federal Gazette publication

The new edition of the German Corporate Governance Code, released earlier this year by DCGK, has now come into force following its publication yesterday in the Federal Gazette. A copy of the Code, in English, is available here; a copy in German is available here.

Friday 10 June 2022

UK: PACAC inquiry - the role of NEDs in Government departments

The House of Commons Public Administration and Constitutional Affairs Committee has this week launched an inquiry to examine the role and regulation of non-executive directors in Government departments. As part of the inquiry, the Committee will consider NEDs' influence, responsibilities and background; how NEDs are appointed and held accountable will also be considered. For further information, see the inquiry website or the call for evidence.

UK: England and Wales: corporate criminal liability - options for reform published by Law Commission

The Law Commission for England and Wales has today published a paper setting out options for reform in respect of the criminal liabliity of companies. The paper does not make recommendations but provides, instead, ten potential reforms.  These reforms include (a) permitting conduct to be attributed to a company if a member of its senior management engaged in, consented to, or connived in the offence; (b) introducing an offence of failure to prevent fraud by an employee or agent; and (c) introducing a reporting requirement requiring large corporations to report on anti-fraud procedures. Some potential reforms have been ruled out, including adopting models of attribution based on corporate culture or the principle of respondeat superior

For further information, see: press release | full options paper (pdf) | summary of options paper (pdf). 


Thursday 9 June 2022

UK: HM Treasury policy statement - the finance sector and critical third parties

HM Treasury has published a policy paper setting out, in general terms, its proposals to bring within the regulatory remit of the financial regulators certain third parties providing key functions and services to the finance sector (e.g., cloud-based computing services): see here. To quote directly from the policy paper (para. 1.6):
Under this proposal, HM Treasury will – in consultation with the financial regulators and other bodies – be able to designate certain third parties which provide services to firms as ‘critical’. The financial regulators will then be able to make rules, gather information, and take enforcement action, in respect of certain services that critical third parties provide to firms of particular relevance to the regulators’ objectives (which the regulators refer to as ‘material’ services)."

UK: England and Wales: common law derivative claims

The ICLR has published a summary for the recently reported decision McGaughey v Universities Superannuation Scheme Ltd [2022] EWHC 1233 (Ch): see here. To quote directly from the summary:
"In order to establish that they had standing or a sufficient interest to continue a claim, it was essential for derivative claimants to demonstrate both that the subject company had suffered a loss and that that loss was reflective of their own loss. The availability of an alternative independent claim against the wrongdoer, for example a breach of trust claim, did not prevent the derivative claimant from having standing. A derivative claimant relying on the fraud on a minority exception to the general rule had to establish a prima facie case that the defendants had committed a deliberate or dishonest breach of duty or that they had improperly benefitted themselves at the company’s expense. It did not provide much assistance to adopt the analysis of a fraud on a power".

European Union: political agreement reached - gender balance on listed company boards

The European Parliament and Council have reached agreement in respect of a Directive, proposed many years ago, the aim of which is to increase the gender balance on the boards of listed companies: see here. Member States will have two years to implement the Directive following its publication in the Official Journal.

Wednesday 1 June 2022

UK: Takeover Panel consultation - 'acting in concert' and companies

The Takeover Panel has published for consultation proposed changes to the Takeover Code concerning the presumptions within the definition of 'acting in concert': see here (pdf). The current definition - presumption 1, applicable to companies - contains a threshold of 20%. The Panel proposes that this should become 30% (aligning it with the threshold contained in the Code's definition of 'control') and that it would operatly differently depending on whether there is voting control or equity investment (equity investment would normally dilute through a chain of ownership; voting control would not dilute).

UK: Treasury consultation - the failure of systemic digital settlement asset (including stablecoin) firms

Her Majesty's Treasury has published for consultation proposals to amend the Financial Market Infrastructure Special Administration Regime to deal with the failure of systemic digital settlement asset (including stablecoin) firms: see here.