Tuesday, 23 September 2014

USA: taxation - corporate inversion reforms published

The US Treasury has published reforms to reduce some of the tax advantages of so-called 'corporate inversions' (a transaction in which a US based multinational restructures so that its US parent is replaced by a foreign parent, in order to avoid taxes in the US). Further information is available here and here.

Monday, 22 September 2014

Singapore: Companies (Amendment) Bill introduced in Parliament

The Companies (Amendment) Bill was introduced in Parliament earlier this month. A date for the second reading has not yet been set. A copy of the Bill is available here (pdf) and further information is available here.

Friday, 19 September 2014

UK: The Community Interest Company (Amendment) Regulations 2014

The Community Interest Company (Amendment) Regulations 2014 were made on 14 September and come into force on 1 October: see here or here (pdf). Their purpose is to remove, for community interest companies, the share dividend cap (as contained in the Community Interest Company Regulations 2005). Further information is available in the explanatory memorandum available here (pdf).

Australia: rectification of a company's constitution

The Supreme Court of New South Wales (Court of Appeal) gave judgment a couple of days ago in Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd [2014] NSWCA 326. The decision is of interest for several reasons, including the court's discussion (and rejection) of the argument that it had jurisdiction to order rectification of a company's constitution.

Thursday, 18 September 2014

Isle of Man: a call to update insolvency law

The High Court gave judgment several days ago in Munin Navigation v Petrodel: see here. The court held that it had the discretion to grant retrospection sanction for a liquidator to employ lawyers; in doing so the trial judge (His Honour Deemster Gough) called for the updating of insolvency law on the Isle of Man (at para 63):
"I proffer a general comment on the archaic statutory provisions and rules which govern insolvency in the Isle of Man. These provisions are out of date, confusing and much in need of revision to accommodate the type of business the Island presently conducts and hopes to attract as it moves forward in the 21st century. It has been said before, and bears repeating, that all those who have to deal with insolvency and winding up of companies in the Isle of Man, not least the Courts, would benefit greatly from an up-to-date revision of the law in these areas, such that the Island can better cater for modern commercial practice."

Wednesday, 17 September 2014

UK: FRC publishes new edition of the UK Corporate Governance Code

The Financial Reporting Council has today published a new edition of the UK Corporate Governance Code: see here. A copy of the new Code is available here (pdf). A feedback statement, providing further background to the changes introduced in the new Code, is available here (pdf).

Tuesday, 16 September 2014

UK: The Financial Services (Banking Reform) Act 2013 (Commencement No. 6) Order 2014

The Financial Services (Banking Reform) Act 2013 (Commencement No. 6) Order 2014 was made on 12 September: see here. An explanatory note, setting out which provisions of the 2013 Act are brought into force by the Order, is available here.

UK: Takeover Panel proposes new framework for post-offer undertakings and intention statements

The Code Committee of the Takeover Panel has published a consultation paper in which it sets out proposed changes to the Takeover Code in order to create a new framework for post-offer undertakings and intention statements: see here (pdf).

Monday, 15 September 2014

India: governance norms - SEBI amendments to Clause 49 of the Equity Listing Agreement

The Securities and Exchange Board of India has published several amendments to Clause 49 of the Equity Listing Agreement (which sets out various corporate governance norms; a revised version was published earlier this year): see here (pdf). Amongst the amendments are those concerning the companies subject to Clause 49 as well as a delay in the provision requiring boards to have at least one female director.

Friday, 12 September 2014

Singapore: draft Companies (Amendment) Bill - update

The Ministry of Finance and Accounting and Corporate Regulatory Authority have completed their review of the feedback received during two rounds of consultation on the draft Companies (Amendment) Bill. A summary of the changes being made to the Bill following these consultations is available here (pdf). Summaries of the feedback received are available here, together with further background information.

Thursday, 11 September 2014

UK: statutory audit services market - comments on CMA's draft Order

Earlier this year the Competition and Markets Authority published a draft of the Order that will implement the recommendations made by the Competition Commission (one of the bodies the CMA has replaced) in respect of the market for statutory audit services: see here (pdf). The Order covers audit tendering and audit committee responsibilities. Responses received in respect of the draft Order have now been published: see here.

Wednesday, 10 September 2014

Europe: Junker Commissioners designate announced

The Junker Commissioners designate have been announced: see here. The UK's nominee, Lord Hill, has been invited to become the Commissioner for Financial Stability, Financial Services and Capital Markets Union. His mission letter is available here (pdf) and his specific areas of responsibility are outlined here. The unit responsible for corporate governance and social responsibility has become part of the remit of Věra Jourová, the Commissioner designate for Justice, Consumers and Gender Equality. There is no mention of corporate governance in her mission letter (available here, pdf).

Tuesday, 9 September 2014

Europe: Commission consultation on the Small Business Act

The European Commission is seeing views on the revisions that should be made to the Small Business Act: see here. In the accompanying questionnaire, views are sought on suggested proposals within several categories including reducing the administrative burden; access to finance; and promoting market access for SMEs.

Monday, 8 September 2014

Europe: Commission consultation on cross-border mergers and divisions

The European Commission has begun a consultation on the EU legal framework for cross-border mergers and divisions: see here. The Commission is collecting information in order to assess the functioning of the framework and any potential need for changes in the current rules.

Friday, 5 September 2014

UK: supervising branches of the international banks - PRA policy and supervisory statements published

The Prudential Regulation Authority has published further information concerning its supervision of the branches of international banks. This is set out in a supervisory statement (herepdf) and policy statement (herepdf).

Thursday, 4 September 2014

Europe: Q & A on the new statutory audit framework

The European Commission has published a series of questions and answers in respect of the new statutory audit framework (Directive 2014/56/EU and Regulation (EU) No 537/2014): see here (pdf).

Wednesday, 3 September 2014

USA: OCC publishes risk governance framework guidelines

The Office of the Comptroller of the Currency yesterday published final guidelines to strengthen the governance and risk management practices of certain large financial institutions: see here (pdf). The guidelines provide that institutions should establish and adhere to a written risk governance framework to manage and control risk-taking activities; they also provide minimum standards regarding institutions’ boards of directors in respect of the oversight of the risk governance framework.

UK: the failure to prevent economic crimes - new corporate offence being considered

Today's Financial Times newspaper reports comments made by the Attorney General, the Rt Hon Jeremy Wright QC MP, at the Cambridge International Symposium on Economic Crime. According to the report, the UK Government is considering the introduction of a new corporate offence, modelled on section 7 of the Bribery Act 2010: the failure to prevent economic crimes such as money laundering and fraud. The report is available here.

Tuesday, 2 September 2014

UK: Scotland: section 1032 of the Companies Act 2006 and restoration to the register

The operation of section 1032 ("Effect of court order for restoration to the register") of the Companies Act 2006 was considered by Sheriff Principal Scott QC last month in ELB Securities Ltd v Alan Love and Prestwick Hotels Ltd. 2014 SCGLA 46. The Sheriff Principal held that the effect of section 1032 was that not all matters reverted to the status quo pre-dissolution; he stated (para. [29]):

"For section 1032(1) to be construed such that it gives rise to an unqualified reversion to the status quo, one would require to ignore or treat as pro non scripto the preceding sections 1021 and 1022 along with the provisions of the succeeding section 1034. In this regard the maxim generalibus specialia derogant must, in my view, apply".

Monday, 1 September 2014

UK: BIS and FRC consult on accounting framework changes

The Department for Business, Innovation and Skills has published a consultation paper in respect of the UK's implementation of chapters one to nine of the EU Accounting Directive 2013/34/EU: see here (pdf). The paper also seeks views on changes to the UK accounting regime in response to issues raised during the Company and Commercial Law Red Tape Challenge.

The Financial Reporting Council has also published a consultation paper, to accompany the BIS paper, concerning accounting standards for small entities: see here (pdf).

Friday, 29 August 2014

Hong Kong: HKEx concept paper on weighted voting rights

The Hong Kong Exchange has published a concept paper in which it seeks views on whether governance structures that give certain shareholders voting power, or other rights, disproportionate to their shareholding, should be permissible for listed companies or those seeking a listing: see here (pdf).

Thursday, 28 August 2014

India: SEBI review of continuous disclosure regime for listed companies

The Securities and Exchange Board of India has published for comment a revised version of Clause 36 - containing the core principles on the disclosure of price sensitive and material information by listed companies - that will be included in the Listing Agreement and/or draft SEBI (Listing Obligations and Disclosure Requirements) Regulations 2014: see here (pdf).

Wednesday, 27 August 2014

UK: FCA consultation on early implementation of the requirements for reports on payments to governments

The Financial Conduct Authority has published a consultation paper in which it sets out how it proposes to amend its Disclosure Rules and Transparency Rules in order to implement early the Transparency Directive Amendment Directive 2013/50/EU in respect of the obligation of issuers in the extractive industries to report annually on payments made to governments in the countries in which they operate: see here (pdf).

Tuesday, 26 August 2014

UK: Scotland: Law Commission trust law reform proposals published

The Scottish Law Commission published its Trust Law report today: see here. Major reforms are proposed, including placing the law within a single statute. A press release and impact assessment can be found here.

Monday, 25 August 2014

UK: Lib Dem manifesto proposals for executive pay

The Liberal Democrats have published proposals concerning executive pay that will be included in their 2015 election manifesto: see here. The detail is sparse, but more disclosure and employee consultation is promised.

Friday, 22 August 2014

UK: FRC proposes amendments to FRS102

The Financial Reporting Council has published an exposure draft - FRED55: Draft amendments to FRS102, pension obligations - the purpose of which is to clarify issues relating to accounting for defined benefit pension plans in advance of new UK and Irish GAAP becoming mandatory from 1 January 2015: see here (pdf).

Thursday, 21 August 2014

UK: Implementation of Chapter ten of the Accounting Directive 2013/34/EU - extractive industry reporting

The Department for Business, Innovation and Skills has published its response to the consultation it recently undertook in respect of the UK's implementation of Chapter ten ("Report on payments to governments") of the EU Accounting Directive 2013/34/EU: see here (pdf). A draft statutory instrument - the Reports on Payments to Governments Regulations 2014 - has also been published: see here (pdf).

It is the Government's intention that those undertakings subject to the Regulations will be required to report on payments made in financial years commencing on or after 1 January 2015. An undertaking is subject to the Regulations if it defined as large, or it is a public interest entity, and it is a mining or quarrying undertaking or a logging undertaking. The definition of undertaking includes limited companies and limited liability partnerships.

Tuesday, 19 August 2014

India: OECD report on related party transactions and minority shareholder protection

The OECD has published a report titled Improving Corporate Governance in India - Related Party Transactions and Minority Shareholder Protection: see here (pdf). The report refers to provisions in India's new company law framework - the Companies Act 2013 - but it does not include some recent changes, including those made by the Companies (Meetings of Board and its Powers) Second Amendment Rules 2014: see here (pdf).

Monday, 18 August 2014

UK: FTSE100 CEO pay is 143 times that of average employee

According to research published today by the High Pay Centre, the chief executives of FTSE100 companies are paid 143 times more than their average employee: see here.

Update (1 September 2014): The High Pay Centre has admitted errors in its calculations, and is now reporting a ratio of 130:1 and not 143:1. See here for further information. The reliability of the HPC data and calculations is such that The Guardian newspaper has removed from its website an article on the ratio: see here.

Friday, 15 August 2014

UK: Companies House annual report and accounts 2013/14

Companies House has published its annual report and accounts for 2013/14: see here. It is reported that 533,032 new incorporations took place during the year, bringing the number of companies on the register to 3.3 million (of which 7,821 are public limited companies).

Thursday, 14 August 2014

Singapore: MAS/SGX review of securities market structure and practices - proposals now confirmed

Earlier this year the Monetary Authority of Singapore and Singapore Exchange published a consultation paper titled Review of Securities Market Structure and Practices: see here (pdf). The consultation period closed in early May and, a few days ago, a joint response was published: see here (pdf). The response outlines the actions that will now be taken, including setting a minimum trading price for issuers listed on the SGX Mainboard and the introduction of a wider range of sanctions for breaches of listing rules.

Wednesday, 13 August 2014

New Zealand: Law Commission report on multiple defendants proposes capped liability scheme for auditors

Earlier this year the New Zealand Law Commission published its report Liability of Multiple Defendants: see here (pdf). The Commission has concluded that the system of joint and several liability is the preferred system and that it should remain the general rule. This said, the Commission has proposed some adjustments to the current regime, including the introduction of scheme whereby the liability of auditors and audit firms can be capped in respect of large or complex audits including the audits of listed companies.

Tuesday, 12 August 2014

UK: England and Wales: employment, bonuses and contractual discretion

Judgment was given last week in Brogden v Investec Bank Plc [2014] EWHC 2785 (Comm). The decision, which concerned unsuccessful claims for bonus payments, is noteworthy because of the discussion it contains regarding the manner in which contractual discretion should be exercised.

The trial judge, Mr Justice Leggatt, observed (at para. [100]): "Both on the authorities and as a matter of principle, it seems to me that where a contract gives responsibility to one party for making an assessment or exercising a judgement on a matter which materially affects the other party's interests and about which there is ample scope for reasonable differences of view, the decision is properly regarded as a discretion which is subject to the implied constraints that it must be taken in good faith, for proper purposes and not in an arbitrary, capricious or irrational manner".

Monday, 11 August 2014

UK: NHS Foundation Trust Governance Code - revised edition published

Monitor has published a revised edition of its NHS Foundation Trust Code of Governance: see here (pdf). The revised edition, dated July 2014, replaces the Code published in December 2013. A list of the changes is available here (pdf).

Friday, 8 August 2014

Europe: Review of the European System of Financial Supervision

The European Commission has published its review of the European System of Financial Supervision: see here. According to the review reports, the European Supervisory Authorities has performed well; further improvements are, however, identified for the short and medium term in order that they are able to fully exploit their mandates.

Thursday, 7 August 2014

UK: FCA restrictions on the distribution of CoCos to retail investors

Section 138I of the Financial Services and Markets Act 2000, inserted by section 24 of the Financial Services Act 2012 - imposes obligations on the Financial Conduct Authority in respect of the exercise of its rule-making powers, including, for example, publishing a draft of the rules accompanied by a cost benefit analysis. An exception is provided by section 138M of the 2000 Act in respect of temporary product intervention rules, the first use of which was illustrated earlier this week when the FCA announced that it would impose restrictions on the distribution of contingent convertible securities (CoCos) to retail investors from 1 October: see here (pdf).

At European level, the risks associated with investment in CoCos were highlighted on 1 August in a statement published by the European Securities and Markets Authority: see here (pdf).

UK: FCA consultation - workplace pensions and independent governance committees

The Financial Conduct Authority has published for consultation the rules it proposes to make in order to require certain firms to establish independent governance committees in respect of their workplace personal pension schemes: see here (pdf).

Wednesday, 6 August 2014

UK: Part V of the Walker Guidelines - amended version published

Part V of the Guidelines for Disclosure and Transparency in Private Equity (also known as the Walker Guidelines) were amended last month. The amended version of Part V is available here (pdf) and replaces part V and Annex D from the Guidelines issued in 2007.

Tuesday, 5 August 2014

The fourth edition of the ICGN Global Governance Principles

The codes and principles directory maintained by the European Corporate Governance Institute was updated yesterday with a copy of the fourth edition of the Global Governance Principles published by the International Corporate Governance Network: see here.