UK: Constraining discretion in bank regulation - a speech by Andy Haldane

Last month, at the Federal Reserve Bank of Atlanta Conference on ‘Maintaining Financial Stability: Holding a Tiger by the Tail(s)', the Executive Director for Financial Stability at the Bank of England, Andy Haldane, delivered a speech titled Constraining discretion in bank regulation: see here (pdf). Amongst other things, Mr Haldane repeated his call for reform of the regulatory system and advocated the greater use of simple, prudent regulatory metrics. A video recording of an interview Mr Haldane gave at the conference is available below (or see here).

UK: Supreme Court to give judgment in Vestergaard next week

The Supreme Court has announced that it will give judgment next week in Vestergaard Frandsen A/S (now called mvf3 Apps) v Bestnet Europe Limited: see here. At issue before the court, to quote directly from its summary, was "[w]hether or not a party who is the subject of an admitted duty or obligation of confidence must have actual or objective knowledge that the acts complained of constitute a breach of that duty or obligation".

UK: New edition of the Takeover Code published

A new edition of the Takeover Code has been published and takes effect on 20 May: see here (pdf). The new edition contains amendments made by Instrument 2013/3 (here, pdf), resulting from the consultation recently undertaken by the Code Committee of the Takeover Panel in respect of companies subject to the Code (about which see here, pdf).

Germany: Updated Corporate Governance Code published

Earlier this year the Government Commission on the German Corporate Governance Code published for consultation proposed changes to the German Corporate Governance Code: see here. Yesterday the Commission confirmed the amendments that will be made to the Code: see here (pdf). A copy of the updated Code was also published: see here (pdf). A copy of the Code with the changes highlighted was also published: see here (pdf). A copy of the Code, in English, will be available here soon.

UK: Scotland: Law Commission publishes report on the consolidation of bankruptcy legislation

The Scottish Law Commission yesterday published its report on the consolidation of bankruptcy legislation in Scotland: see here (pdf). The report contains a draft of the Bankruptcy (Scotland) Bill 2013 (to be passed by the Scottish Parliament) and also identifies legislative changes (including some to the Companies Act 2006) that would fall to the UK Parliament.

UK: The Prospectus Regulations 2013

The Prospectus Regulations 2013 were laid before Parliament last week and come into force on 31 May: see here or here (pdf). An explanatory note for the Regulations, which amend section 86 ("Exempt offers to the public") of the Financial Services and Markets Act 2000 Act, is available here.

Denmark: Recommendations on Corporate Governance

Following the conclusion of a consultation earlier this year, the Committee on Corporate Governance has now published its revised Recommendations on Corporate Governance: see here (English, pdf) or here (Danish, pdf). 

Guernsey: reviewing the regulatory framework for financial services

The Commerce and Employment Department has begun a review of the regulatory framework for financial services, starting with the publication of a consultation paper concerning the role and objectives of the Financial Services Commission: see here (pdf).

South Africa: relief for unfairly prejudicial conduct

The Supreme Court of Appeal gave judgment last Friday in Grancy Property Limited v Manala (665/12) [2013] ZASCA 57: see here or here (pdf). The case concerned the operation of section 163 of the Companies Act 71 of 2008, which provides that a shareholder or director may apply to the court for relief in respect of oppressive or unfairly prejudicial conduct. The Supreme Court held that the Western Cape High Court (Cape Town) had erred in deciding that a shareholder had failed to make out a case for relief and in doing so considered, amongst other things, the scope of relief that could be provided. In the course of his judgment, Petse JA observed "... there is much to be said for the proposition that s 163 must be construed in a manner that will advance the remedy that it provides rather than limit it." (para 26). A summary of the decision is available here (pdf).

Iceland: Guidelines on Corporate Governance (fourth edition)

The codes and principles directory maintained by the European Corporate Governance Institute has recently been updated to include the fourth edition of the Guidelines on Corporate Governance published by the Iceland Chamber of Commerce, NASDAQ OMX Iceland hf. and Confederation of Icelandic Employers: see here.

UK: Transposition of the Alternative Investment Fund Managers Directive

The Government has published its response in respect of the consultation that took place earlier this year regarding the transposition of the Alternative Investment Fund Managers Directive: see here (pdf). A copy of the Alternative Investment Fund Managers Regulations 2013 has also been published - see here (pdf) - together with a set of questions and answers: see here (pdf).

Europe: The European Corporate Governance Codes Network

The European Corporate Governance Codes Network - an informal network of the organisations responsible for writing and/or monitoring the implementation of national corporate governance codes in European Union and European Economic Area countries, and which exists primarily for the sharing of views, experiences and practice - has launched a new website: see here. In addition to providing links to relevant codes and guidance, the website contains a very useful section with links to monitoring reports for the codes.

UK: Taxing companies in the global economy - evidence before the Economic Affairs Committee

Earlier this year the House of Lords Economic Affairs Committee began in inquiry exploring the taxation of companies an the global economy: see here. A transcript of oral evidence given at the first evidence session, at which Professor Steve Bond and Malcolm Gammie CBE QC appeared, is now available: see here (pdf).

UK: Financial Services (Banking Reform) Bill - update

The Financial Services (Banking Reform) Bill, which was introduced in the 2012-13 session of Parliament, has been carried over into the new session which began this week following the State Opening of Parliament. The Bill provides the framework for ring-fencing banks' activities. A copy of the Bill, as reintroduced, is available here or here (pdf). Explanatory notes are available here or here (pdf). The Bill will next be considered at report stage in the House of Commons.

UK: Supreme Court gives judgment in BNY Corporate Trustee Services appeals

The Supreme Court gave judgment today in the BNY Corporate Trustee Services Limited appeals: see here (pdf). A summary is available here (pdf). Amongst other things, the court considered the practical effect of section 123 ("Definition of inability to pay debts") of the Insolvency Act 1986. In this regard, Lord Walker (with whom Lords Mance, Sumption Carnwath agreed) observed (para. [37]):

[T]he provisions of section 123(1) and (2) should in my view be seen ...  as making little significant change in the law. The changes in form served, in my view, to underline that the “cash-flow” test is concerned, not simply with the petitioner’s own presently-due debt, nor only with other presently-due debt owed by the company, but also with debts falling due from time to time in the reasonably near future. What is the reasonably near future, for this purpose, will depend on all the circumstances, but especially on the nature of the company’s business. ... The express reference to assets and liabilities is in my view a practical recognition that once the court has to move beyond the reasonably near future (the length of which depends, again, on all the circumstances) any attempt to apply a cash-flow test will become completely speculative, and a comparison of present assets with present and future liabilities (discounted for contingencies and deferment) becomes the only sensible test. But it is still very far from an exact test, and the burden of proof must be on the party which asserts balance-sheet insolvency"

A summary of the court's decision was delivered by Lord Hope and can be watched here:

UK: England and Wales: delay and the issue of a pre-merger certificate

The ICLR has provided a summary for the recent High Court decision Re House-Clean Ltd [2013] WLR (D) 165: see here. The summary's headnote reads: "Delay was not relevant to the court’s consideration of whether the pre-merger requirements within Part 2 of the Companies (Cross-Border Mergers) Regulations 2007 had been satisfied and the court was obliged to issue a pre-merger certificate to a United Kingdom-based merging company if those requirements had been carried out." The decision is not, at present, available on the BAILII database.

India: Companies Bill 2012 not passed as Parliamentary session ends two days early

The Indian Parliament's current term was brought to end yesterday, two days early. The Companies Bill 2012, which was passed by the Lok Sabha last December (see here, pdf), was not passed by the Rajya Sabha. The chairman of the Rajya Sabha, in his valedictory remarks (see here, pdf), observed:

The experience of this Session, particularly of its second half, should induce cogitation on a number of matters arising out of the situation in which the House finds itself in its daily functioning. Three questions in particular need to be addressed. One, has the balance between deliberation, legislation and accountability been lost due to regular disruptions of the proceedings? Two, has the time not come to bridge the growing gap between the rules of procedure and the need felt by different sections of the House to voice opinion on matters of concern? This, needless to say, has to be done in an orderly manner to preserve the dignity of the House. Three, has the membership of this august body assessed the impact of disruptive behaviour on public opinion?"

UK: England and Wales: the power to give directions under section 1032 of the Companies Act 2006

A decision of the High Court from last year, Rloans LLP v The Registrar of Companies [2012] EWHC B33 (Comm), was added to the BAILII database earlier this week. The case concerned, amongst other things, the power of the court to give directions under section 1032 ("Effect of court order for restoration to the register") of the Companies Act 2006.

UK: England and Wales: dissolution of a partnership by an accepted repudiation?

Earlier this week the ICLR published a summary for the recent High Court decision Golstein v Bishop [2013] EWHC 881 (Ch): see here. To quote from the summary's headnote: "The dissolution of a partnership could not be brought about by an accepted repudiation." A copy of the decision has not yet been added to the BAILII database.

Ireland: Corporate Manslaughter Bill 2013 to begin second stage

The Corporate Manslaughter Bill 2013, a private member's bill, was introduced in the Seanad Éireann on 2 May and completed the first stage: see here. Second stage debate has been scheduled to begin today: see here (pdf). A copy of the Bill is available here (pdf). An explanatory memorandum is available here (pdf).

UK: England and Wales: High Court considers 'material adverse change' clause

Judgment was given late last month by Mr Justice Blair in Grupo Hotelero Urvasco SA v Carey Value Added SL & Anor [2013] EWHC 1039 (Comm). Of particular interest is the discussion concerning a "material adverse change" clause, about which the trial judge observed (para. [364]):

The interpretation of a "material adverse change" clause depends on the terms of the clause construed according to well established principles. In the present case, the clause is in simple form, the borrower representing that there has been no material adverse change in its financial condition since the date of the loan agreement. Under such terms, the assessment of the financial condition of the borrower should normally begin with its financial information at the relevant times, and a lender seeking to demonstrate a MAC should show an adverse change over the period in question by reference to that information. However the enquiry is not necessarily limited to the financial information if there is other compelling evidence. The adverse change will be material if it significantly affects the borrower's ability to repay the loan in question. However, a lender cannot trigger such a clause on the basis of circumstances of which it was aware at the time of the agreement. Finally, it is up to the lender to prove the breach."

India: company law reform - Companies Bill tabled (again) in the Rajya Sabha

The Companies Bill 2012, which was passed by the Lok Sabha last December (see here, pdf), was tabled for consideration and passing by the Rajya Sabha last week but this did not happen. The Bill has been scheduled for consideration and passing today: see here (pdf).

Singapore: company law reform - draft Companies Amendment Bill 2013 published

Last October, the Ministry of Finance published its response to the recommendations made by the steering group formed to review the Companies Act 1967: see here (pdf). A draft Bill - the Companies Amendment Bill 2013 - has now been published for consultation: see here (pdf). The Bill is accompanied by two supporting documents in which further questions are asked and more information provided about the Ministry's response to the steering group's recommendations: see here (pdf) and here (pdf). The steering group's report is available here (pdf).

Bermuda: the common law discretion to assist foreign liquidators

The Supreme Court gave judgment last month in In the Matter of Saad Investment Co. [2013] SC (Bda) 28 Com: see here (pdf). This is an important and interesting decision exploring the scope of the common law discretion to assist foreign liquidators in Bermuda, and one that considers much English case law.

Jersey: Royal Court gives directions under article 46 of the Foundations (Jersey) Law 2009

The Royal Court (Samedi Division) has, for the first time, given directions under a power given to it by article 46 the Foundations (Jersey) Law 2009: see A Ltd. v B Ltd and others [2013] JRC075. In doing so it has provided some important analysis of the scope and operation of article 46 and of the differences between trusts and foundations.

UK: Enterprise and Regulatory Reform Act 2013 published

The Enterprise and Regulatory Reform Act 2013 received Royal Assent last month: see here. The Act contains, amongst other things, some of the provisions necessary to introduce the new regime for shareholder approval of quoted company directors' remuneration. A copy of the Act was published today on the legislation.gov.uk website: see here (pdf).

UK: Supreme Court to give judgment next week in BNY Corporate Trustee Services

The Supreme Court has announced that it will hand down its judgment next Wednesday in BNY Corporate Trustee Services Limited v Eurosail-UK 2007-3BL PLC (on appeal from [2011] EWCA Civ 227). At issue, to quote the court's summary, was the "... proper interpretation of section 123(2) of the Insolvency Act 1986 as incorporated into a securitisation agreement, in particular whether a company is to be deemed 'unable to pay its debts' by reason of the fact that on an examination of its balance sheet its liabilities exceed its assets, or whether some further test is involved ...".

UK: HM Treasury makes first recommendations to the Financial Policy Committee

Section 4 of the Financial Services Act 2012 inserted new provisions into the Bank of England Act 1998 in respect of the Financial Policy Committee, including a requirement that HM Treasury make recommendations to the FPC in respect of matters that the FPC should regard as relevant to its understanding of the Bank of England's financial stability objective. The first recommendations have been made: see here (pdf).

UK: The QCA Corporate Governance Code for Small and Mid-Size Quoted Companies

The Quoted Companies Alliance yesterday published an updated edition of its Corporate Governance Code for Small and Mid-Size Quoted Companies: see here. The Code, which is endorsed by the Financial Reporting Council, is intended for companies not subject to the UK Corporate Governance Code, including standard listed companies and those on AIM and the ICAP Securities and Derivatives Exchange. A copy of the Code is not available to view free of charge.

UK: FRC publishes plan and budget for 2013-2016

The Financial Reporting Council - the organisation responsible for promoting high quality corporate governance and reporting to foster investment (to quote its mission) - has published its plan and budget for 2013-2016: see here (pdf). Amongst other things, the FRC identifies areas where it needs to improve its understanding, including capital markets and the needs of investors.