Loading...

Follow Lexis Nexis Corporate Law on Feedspot

Continue with Google
Continue with Facebook
or

Valid

This week’s edition of Corporate highlights includes the government’s response to the Business, Energy & Industrial Strategy Committee’s Future of Audit report and dispute resolution analysis on an appeal relating to an unfair prejudice case which involved an order to purchase the minority shareholder’s shares (Re Sprintroom Ltd).

In this issue:BrexitFinancial Services (Miscellaneous) (Amendment) (EU Exit) (No 2) Regulations 2019

SI 2019/1010: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for Brexit. This enactment is being made in order ensure a coherent and functioning financial services regulatory regime once the UK leaves the EU. It makes amendments to a number of financial services EU exit statutory instruments and to an EU delegated regulation, correcting errors identified in legislation after it was made, making amendments to ensure consistency between EU exit instruments and introducing a transitional provision. These amendments will ensure that these instruments operate effectively after the UK leaves the EU. It comes into force partly on 11 June 2019, partly on whichever is the later of immediately before exit day or 11 June 2019 and fully on whichever is the later of exit day or 11 June 2019.

For further information, see: LNB News 04/04/2019 35.

AuditGovernment responds to BEIS Committee report on the Future of Audit

The Business, Energy and Industrial Strategy Committee (Committee) has published the government’s response to the Committee's report on the Future of Audit. The government's response welcomes the Committee's report on the Future of Audit and suggests that the majority of the Committee's recommendations are matters that will be the subject of consultations that the government has commissioned, or will be commissioning, in this area.

For further information, see: LNB News 07/06/2019 60.

Additional Corporate updates this weekRe Sprintroom Ltd, Prescott v Potamianos; Potamianos v Prescott

These appeals related to an unfair prejudice petition. It was found that the minority shareholder of a company had been subject to unfairly prejudicial conduct by a majority shareholder who had called for and obtained his removal as a director following a challenge to the intellectual property rights of the company. The Court of Appeal, Civil Division, dismissed the majority shareholder's appeal on the ground that, whilst the minority shareholder had acted in a way that was in breach of his fiduciary duty, that breach had not amounted to conduct that made it fair to exclude him from management.

For the approved judgment, see: [2019] All ER (D) 41 (Jun).

Unfair prejudice petitions—offers to purchase (Re Sprintroom Ltd)

Dispute Resolution analysis: The Court of Appeal considered that the trial judge had been wrong to postpone to a later hearing consideration of an offer to purchase the petitioner’s shares in this case, noting that such offers are generally better considered at the liability stage. This judgment provides useful guidance for practitioners advising in the early stages of an unfair prejudice claim, including on the factors which are likely to be relevant in most cases involving a consideration as to whether an offer to purchase shares was reasonable. Written by James Davies, barrister and mediator at New Square Chambers.

For further information, see News Analysis: Unfair prejudice petitions—offers to purchase (Re Sprintroom Ltd).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

New and updated contentNew Precedent—Public Company Takeovers

We have published the following Precedent in our Public Company Takeovers topic: Scheme document—additional information.

Dates for your diary
DateDevelopment
5 July 2019Deadline for responses to the ICSA consultation on effectiveness of independent board evaluation in UK listed sector.
The Governance Institute (ICSA) has published a consultation aimed at assessing the quality of independent board evaluation in the UK listed sector, as well as ways in which it might be improved. The review is being carried out at the request of the Department for Business, Energy and Industrial Strategy (BEIS).
See: LNB News 31/05/2019 33.
16 July 2019Revised Stewardship Code expected to be published and come into effect.
Following a consultation paper published in January 2019, the final version of the revised Stewardship Code is expected to be published and come into effect on 16 July 2019.
See: LNB News 30/01/2019 105 and Practice Note: The UK Stewardship Code—FRC consultation on revised Stewardship Code.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&As added this week:

  1. Is it possible to amend the amount of guarantee given by the members of a company limited by guarantee, and if so, how?

  2. Does a change in the rights attaching to the A shares in a private company limited by shares require the consent of the holders of the company’s B shares?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—7 June2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes our Market Tracker Trend Report—Trends in UK Equity Capital Markets (June 2019), an FCA policy statement relating to the implementation of the revised Shareholder Rights Directive and a further FCA policy statement relating to the implementation of the Prospectus Regulation.

In this issue:Equity Capital MarketsMarket Tracker Trend Report—Trends in UK Equity Capital Markets (June 2019)

Corporate analysis: Market Tracker’s annual report on trends in UK Equity Capital Markets reviews IPOs and secondary fundraisings from 2016 through to 2018 on both the Main Market and AIM. The report also looks at legal and regulatory developments in 2018 and the first quarter of 2019, and analyses current hot topics including the effect of recent reforms to the Main Market IPO process and the impact of Brexit on risk factors in prospectuses.

A copy of the report can be found here.

Highlights of the report include:

  1. a three-year comparison of IPO and secondary offering activity on the Main Market and AIM, with a focus on transaction volume, gross proceeds and market capitalisation

  2. analysis of the headline IPOs during 2018

  3. industry sector review, summarising emerging sector trends in new listings

  4. geographical trends in new listings and a comparison of country of incorporation and country of operation

  5. summary and analysis of recent changes to the Main Market IPO process and its impact

  6. in-depth look at cancelled and postponed IPOs in 2018

  7. overview of the impact of Brexit on ECM activity, and

  8. a detailed look at recent and upcoming legal and regulatory developments

This report includes expert commentary and market insight from leading practitioners, including:

  1. Mark Austin, Partner, Freshfields Bruckhaus Deringer LLP

  2. Rosalie Chadwick, Head of Corporate Finance, Pinsent Masons LLP

  3. Jamie Corner, European Counsel, Davis Polk & Wardwell London LLP

  4. Dan Hirschovits, Partner, Davis Polk & Wardwell London LLP

  5. Clive Hopewell, Partner, Head of International Capital Markets, Bird & Bird LLP

  6. Alexander Keepin, Partner, Corporate Finance and Head of Mining, Bryan Cave Leighton Paisner LLP

  7. James Spinney, Head of Capital Markets, Strand Hanson

  8. Julian Stanier, Corporate Finance Partner, Pinsent Masons LLP

  9. Marcus Stuttard, Head of AIM & UK Primary Markets, London Stock Exchange Group

  10. Tim Ward, CEO, Quoted Companies Alliance

  11. Martin Webster, Corporate Finance Partner, Pinsent Masons LLP

  12. Alasdair Weir, Senior Associate, Pinsent Masons LLP

  13. Simon Witty, Partner, Davis Polk & Wardwell London LLP

FCA publishes PS19/12 and near-final Handbook rules to implement the Prospectus Regulation

The FCA has published a policy statement (PS19/12) setting out the near-final rules on the changes the FCA plans to make to the Handbook to align it with the Prospectus Regulation. It also summarises the feedback received to the consultation paper (CP19/6) and the FCA's response. The consultation closed on 28 March 2019.

For further information, see: LNB News 31/05/2019 38.

FCA fines Cathay International, its CEO and finance director for breaches of the Listing Principles and DTRs

The FCA has published decision notices concerning Cathay International Holdings Limited and two of its directors, Mr Jin-Yi Lee and Mr Eric Siu. The FCA considers that Cathay breached the FCA’s Listing Principles and Disclosure Rules and Transparency Rules and has imposed a fine of £411,000. In the FCA’s view, Mr Lee was knowingly concerned in the company’s breaches and so has been fined £214,300. The FCA also considers that Mr Siu was knowingly concerned in one of the company’s breaches and so has been fined £40,200.

For further information, see: LNB News 03/06/2019 21.

The London Stock Exchange publicly censures and fines Real Good Food

On 30 May 2019, the London Stock Exchange (LSE) announced in AIM Disciplinary Notice 21 that it had publicly censured Real Good Food plc and fined it £450,000 (discounted to £300,000 for early settlement) for breaches of rules 10, 13, 17, 19 and 31 of the AIM Rules for Companies.

For further information, see: LNB News 30/05/2019 30.

Corporate GovernanceICSA consultation on effectiveness of independent board evaluation in the UK listed sector

ICSA: The Governance Institute (ICSA) has published a consultation aimed at assessing the quality of independent board evaluation in the UK listed sector, as well as ways in which it might be improved. The review is being carried out at the request of the Department for Business, Energy and Industrial Strategy (BEIS). The deadline for responses to the consultation is 5 July 2019.

For further information, see LNB News 31/05/2019 33.

FCA publishes final rules implementing the revised Shareholder Rights Directive

The Financial Conduct Authority (FCA) has published a policy statement (PS19/13) following its consultation paper (CP19/7) on proposals to (i) implement requirements of the revised Shareholder Rights Directive (SRD II) and (ii) improve shareholder engagement. The policy statement summarises the feedback the FCA received to the consultation—which closed on 27 March 2019—and the FCA’s response to it. It also sets out the final rules.

For further information, see: LNB News 31/05/2019 49.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
7 June 2019Closing date for the call by the Department of Business, Enterprise & Industrial Strategy (BEIS) for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing in February 2019 the terms of reference for an independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The Brydon Review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audit on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs, as well as serve the interests of other stakeholders and the public interest.
For further information, see: LNB News 10/04/2019 85.
10 June 2019HM Treasury has issued a consultation document on the steps that the UK government proposes to take to meet the UK’s obligation to transpose the Fifth Money Laundering Directive (MLD5) into national law and on the potential costs and benefits of the changes considered.
In implementing MLD5, the government is catering for the scenario where an implementation period is in place after the UK leaves the EU. During this implementation period common rules will remain in place, meaning that EU law will continue to have effect in the UK in the same way as now until the end of an agreed implementation period. This would require the UK to implement MLD5 by January 2020.
For further information, see: LNB News 15/04/2019 77.
10 June 2019EU Member States shall by this date bring into force the laws, regulations and administrative provisions necessary to comply with the majority of the requirements of Directive EU 2017/828 amending the Shareholder Rights Directive (the Amending Directive).
The principal amendments to be made by the Amending Directive relate to identification of shareholders; facilitation of the exercise of shareholder rights; investor engagement policy; directors' remuneration and related party transactions.
For further information, see: LNB News 14/03/2017 117LNB News 03/04/2017 138LNB News 05/04/2017 148LNB News 20/05/2017 1.
10 June 2019Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 come into force.
These Regulations are laid to implement in part Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement in the UK. Articles 9a and 9b of the Directive are implemented to ensure that the implementation works with the framework already in place in UK legislation with regards to directors’ remuneration.
For further information, see LNB News 09/04/2019 6.
10 June 2019Proxy Advisors (Shareholders’ Rights) Regulations 2019 come into force.
These provisions are made to transpose Article 3j of the revised EU Shareholder Rights Directive (SRD II) into UK law, in line with the UK’s obligations as a member of the EU. Article 3j of SRD II places requirements on proxy advisors, which primarily offer voting services and/or advice to shareholders in publicly listed companies, to make certain disclosures about the way in which they conduct their business.
For further information, see: LNB News 14/05/2019 53.
11 June 2019BEIS launched a consultation on 11 March 2019 seeking views on the recommendations made by the Independent Review of the Financial Reporting Council (FRC) to create a new regulator responsible for audit, corporate reporting and corporate governance. The consultation will close at 11:45 pm on 11 June 2019.
For further information, see: LNB News 12/03/2019 12.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation..

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes guidance issued by the Department of Business, Energy & Industrial Strategy (BEIS) on audit and accounting in the event of a no-deal Brexit, the publication of the Investment Association’s report calling for more transparency on FTSE companies’ dividend policies and new AIM guidance notes on nominated advisers and the use of the AIM Designated Market route to admission.

In this issue:BrexitAccounting and auditing requirements—no deal Brexit guidance

The Department for Business, Energy & Industrial Strategy (BEIS) has published new guidance for stakeholders on how companies can ensure they comply with accounting and reporting requirements (see Accounting if there’s no Brexit deal), as well as how auditing professionals should prepare (see Audit if there’s no Brexit deal), if the UK leaves the EU in a ‘no deal’ scenario.

For further information, see: LNB News 24/05/2019.

Corporate GovernancePreparing for the new corporate governance requirements on executive pay and employee engagement

Share Incentives analysis: Several corporate governance developments affecting remuneration come into effect this year. Nicholas Stretch, head of the Incentives practice at Ashurst, picks out the key changes and considers how companies will need to get to grips with them when reporting on executive pay.

For further information, see News Analysis: Preparing for the new corporate governance requirements on executive pay and employee engagement.

Directors and company secretariesCompanies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019

SI 2019/970: These Regulations were made on 22 May 2019 to implement in part EU Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017 amending EU Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement in the UK. Articles 9aand 9b of Directive 2017/828/EU are implemented to ensure that the implementation works with the framework already in place in UK legislation with regards to directors’ remuneration. The Regulations will come into force on 10 June 2019.

For further information, see: LNB News 09/04/2019 6.

Share capitalInvestment Association calls for companies to state dividend distribution policy

The Investment Association (IA) has published a report, ‘Shareholder votes on dividend distributions in UK listed companies’, which calls for companies to be more transparent on their approach to paying dividends. The report forms part of an investigation into dividend payment practices carried out by the IA at the request of the UK government as part of its consultation 'Insolvency and Corporate Governance'. Lexis®PSL Corporate has also been following and tracking developments in the arena of dividends; see: Dividends 2019—Market Tracker Trend Report.

For further information, see: LNB News 28/05/2019 11.

Accounts and reportsCommission publishes Q&As on ESEF RTS

The European Commission has published a Q&A document on Commission Delegated Regulation (EU) 2018/815, which was published in the Official Journal of the EU on 29 May 2019 and sets out regulatory technical standards (RTS) on the specification of the European single electronic reporting format (ESEF).

For further information, see: LNB News 29/05/2019 61.

Equity capital markets (AIM)Inside AIM newsletter reveals guidance notes on nominated advisers

The London Stock Exchange (LSE) has published two guidance notes as part of its Inside AIM newsletter, which look at staffing of nominated advisers (Nomads) and the use of the AIM Designated Market route to admission.

For further information, see: LNB News 28/05/2019 72.

Additional Corporate updates this weekAuden McKenzie (Pharma Division) Ltd v Patel

This case related to a company’s share purchase agreement. The first defendant had no real prospect of successfully defending the claimant companies' claim for damages for, among other things, deceit in relation to the alleged misrepresentation of the financial circumstances of the first claimant company following the entry by the second claimant company into a share purchase agreement for the purchase of the first claimant's holding company. Consequently, the Commercial Court granted summary judgment on the first claimant's claim for damages against the first defendant. However, the court was not prepared to decide any other points on a summary basis, including the first defendant's counterclaim and additional claim.

For further information, see: Auden McKenzie (Pharma Division) Ltd v Patel [2019] All ER (D) 130 (May).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
31 May 2019Deadline for feedback on NEX Exchange’s consultation regarding its Growth Market Rules for Issuers.
The main reason for the consultation is to reflect the changes being brought in by the Prospectus Regulation in July 2019, which introduces the new EU growth prospectus for certain issues by SMEs. The EU growth prospectus will have a standardised format and allow reduced disclosure requirements. It is intended that the Growth Market Rules for Issuers, will reflect many of the requirements of the new EU regime
For further information, see: LNB News 02/05/2019 35.
7 June 2019Closing date for the call by the BEIS for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing in February 2019 the terms of reference for an independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The Brydon Review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audit on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs, as well as serve the interests of other stakeholders and the public interest.
For further information, see: LNB News 10/04/2019 85.
10 June 2019HM Treasury has issued a consultation document on the steps that the UK government proposes to take to meet the UK’s obligation to transpose the Fifth Money Laundering Directive (MLD5) into national law and on the potential costs and benefits of the changes considered.
In implementing MLD5, the government is catering for the scenario where an implementation period is in place after the UK leaves the EU. During this implementation period common rules will remain in place, meaning that EU law will continue to have effect in the UK in the same way as now until the end of an agreed implementation period. This would require the UK to implement MLD5 by January 2020.
For further information, see: LNB News 15/04/2019 77.
10 June 2019EU Member States shall by this date bring into force the laws, regulations and administrative provisions necessary to comply with the majority of the requirements of Directive EU 2017/828 amending the Shareholder Rights Directive (the Amending Directive).
The principal amendments to be made by the Amending Directive relate to identification of shareholders; facilitation of the exercise of shareholder rights; investor engagement policy; directors' remuneration and related party transactions.
For further information, see: LNB News 14/03/2017 117LNB News 03/04/2017 138LNB News 05/04/2017 148
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes the latest updates on Brexit, publication of a report on the Draft Registration of Overseas Entities Bill that calls for loopholes in the draft legislation to be addressed and a FCA decision that found three asset management firms breached competition law by sharing sensitive information regarding prices for IPOs. It also focuses on two recent cases, one relating to the doctrine of economic duress and one relating to a breach of warranty claim that was capped by provisions in a SPA.

In this issue:BrexitCompetitiveness of Enterprises and Small and Medium-sized Enterprises (Revocation) (EU Exit) Regulations 2019

SI 2019/934: These regulations are made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 in preparation for Brexit. These regulations revoke EU Regulation (EU) 1287/2013establishing a programme for the competitiveness of enterprises and small and medium-sized enterprises and repealing EU Decision 1639/2006/EC in order to address failures of retained EU legislation to operate effectively, and other deficiencies arising from the withdrawal of the UK from the EU. It comes into force on the later of exit day or on 7 June 2019.

For further information, see: LNB News 17/05/2019 68.

Corporate crime for corporate lawyersJoint committee calls for loopholes in draft property money laundering Bill to be fixed

The Joint Committee examining the draft Registration of Overseas Entities Bill has called for loopholes in the draft legislation to be addressed.

In a report published on 20 May 2019, the Joint Committee says the Bill is to be welcomed to aid criminal investigations that are currently impeded due to difficulties in accessing information on individuals who own or control overseas entities used in money laundering. The draft Registration of Overseas Entities Bill aims to tackle these difficulties with increased transparency around who owns UK land and the creation of a public register of beneficial owners—the individuals who profit from an overseas entity’s investment—through Companies House. However, the Joint Committee highlights specific areas that must be improved to ensure its efficacy. Issues include the Bill not covering trusts, a lack of clarity around entity exemption, infrequent updates to the register of beneficial owners, a lack of verification checks and difficulty in enforcing the new law.

For further information, see: LNB News 20/05/2019 80.

FCA: First decision under concurrent competition powers published—anti-competitive conduct in the asset management sector

On 22 May 2019, the Financial Conduct Authority (FCA) published the full text of its decision of 21 February 2019, which found that three asset management firms breached competition law by sharing sensitive information regarding prices for initial public offerings. In its first formal decision under its ‘concurrent’ competition powers, the FCA fined Hargreave Hale Ltd £306,300 and River & Mercantile Asset Management LLP £108,600. Newton Investment Management Limited was given immunity under the competition leniency programme and was therefore not fined.

For further information, see Practice Note: Asset management firms (information sharing) and LNB News 22/05/2019 16.

Additional Corporate updates this weekCommercial contract not avoided on economic duress grounds where duress was lawful (Times Travel (UK) LTD v Pakistan International Airlines Corporation)

Dispute Resolution analysis: In Times Travel (UK) LTD v Pakistan International Airlines Corporation[2019] EWCA Civ 828, the Court of Appeal considered the issue of whether a contract may be avoided on the grounds of economic duress stemming from a lawful act or omission. The court held that, in a commercial context, if one party is exerting lawful economic pressure to achieve a result which it believes, in good faith, it was entitled to (irrespective of whether such a belief was reasonable), then such actions will not amount to economic duress so as to avoid the contract. The analysis is written by Laura Alliss, associate director/solicitor at DJM Solicitors.

For further information, see News Analysis: Commercial contract not avoided on economic duress grounds where duress was lawful (Times Travel (UK) LTD v Pakistan International Airlines Corporation).

Damages for breach of accounting warranties capped at the purchase price of target company by SPA provisions (116 Cardamon Ltd v Macalister)

In 16 Cardamon Ltd v Macalister [2019] All ER (D) 97 (May), the High Court considered a claim for breach of various accounting warranties included in a share purchase agreement. The High Court found that contrary to the impression given by the target company’s accounts as warranted in the share purchase agreement, it was insolvent. It therefore held that there had been a breach of warranty and awarded damages equal to the amount of the purchase price of the target company (being the maximum aggregate sum recoverable for a breach of warranty pursuant to the terms of the share purchase agreement), although the High Court found that the damages flowing from the breach of warranty were in excess of that figure.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
31 May 2019Deadline for feedback on NEX Exchange’s consultation regarding its Growth Market Rules for Issuers.
The main reason for the consultation is to reflect the changes being brought in by the Prospectus Regulation in July 2019, which introduces the new EU growth prospectus for certain issues by SMEs. The EU growth prospectus will have a standardised format and allow reduced disclosure requirements. It is intended that the Growth Market Rules for Issuers, will reflect many of the requirements of the new EU regime
For further information, see: LNB News 02/05/2019 35.
7 June 2019Closing date for the call by the Department of Business, Enterprise & Industrial Strategy (BEIS) for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing in February 2019 the terms of reference for an independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The Brydon Review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audit on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs, as well as serve the interests of other stakeholders and the public interest.
For further information, see: LNB News 10/04/2019 85.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&A added this week: Is a provision of a company’s articles that a director can be removed by a members’ resolution requiring 75% approval valid, or does section 168 of the Companies Act 2006 take precedence?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up: Market Tracker weekly round-up—17 May 2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes news of the publication of new guidance on financial reporting for smaller quoted companies and the making of the Proxy Advisors (Shareholders’ Rights Regulations) 2019. It also provides details of our most recent Market Tracker trend report on current market practice relating to dividends payments across the FTSE 350.

In this issue:Market Tracker trend report—Dividends 2019

Corporate analysis: Market Tracker’s latest trend report, Dividends 2019, gives an update on market practice regarding dividends payments across the FTSE 350 since last year’s report. The report follows the announcement by the Government that they are concerned about how some companies are going about paying dividends and have asked the Investment Association to carry out further research into the prevalence of such practices. This report includes an interview with the Investment Association and contributions from Martin Webster, Partner at Pinsent Masons LLP, and Jonathan Beastall, Senior Adviser at Pinsent Masons LLP.

For further information, see: Market Tracker Trend Report—Dividends 2019.

Financial service regulation for corporate lawyersNew guidance to help smaller quoted firms with the financial reporting process

The Financial Reporting Council and the Institute of Chartered Accountants in England and Wales have jointly published a new guide to help smaller listed and AIM companies with the financial reporting process. The guide provides practical tips and questions for audit committees to consider, with a view to improving the quality of financial reporting by smaller quoted companies.

For further information, see: LNB News 13/05/2019 31.

ESMA publishes European Commission request for technical advice on elements of MAR

The European Securities and Markets Authority (ESMA) has published a formal request it received for technical advice on the report to be submitted by the European Commission under Article 38 of Regulation (EU) 596/2014 on market abuse (MAR). The letter, dated 20 March 2019, asks for ESMA’s advice on a number of matters including insider dealing and market manipulation, the definition of inside information, the prohibition on trading, a potential EU-wide framework for cross-market order book surveillance, and the benchmark provisions.

For further information, see: LNB News 15/05/2019 34.

MembersProxy Advisors (Shareholders’ Rights Regulations) 2019

SI 2019/926: Provisions are made to transpose Article 3j of the revised EU Shareholder Rights Directive (SRD II) into UK law, in line with the UK’s obligations as a member of the EU. Article 3j of SRD II places requirements on proxy advisors, which primarily offer voting services and/or advice to shareholders in publicly listed companies, to make certain disclosures about the way in which they conduct their business. These Regulations will come into force on 10 June 2019.

For further information, see: LNB News 14/05/2019 53.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a weekly basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
31 May 2019Deadline for feedback on NEX Exchange’s consultation regarding its Growth Market Rules for Issuers.
The main reason for the consultation is to reflect the changes being brought in by the Prospectus Regulation in July 2019, introducing the new EU growth prospectus for certain issues by SMEs. The EU growth prospectus will have a standardised format and allow reduced disclosure requirements.
For further information, see: LNB News 02/05/2019 35.
7 June 2019Closing date for the BEIS call for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing—in February 2019—the terms of reference for the independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audits on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs and to serve the interests of other stakeholders, as well as the public interest.
For further information, see: LNB News 10/04/2019 85.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&A added this week: Can the articles of association have a bespoke quorum provision for an adjourned general meeting?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—10 May2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes details of a NEX Exchange consultation setting out proposed changes to the NEX Exchange Growth Market Rules for Issuers and details of a BEIS consultation on Corporate Transparency and Registration Reform which seeks to address the misuse of UK registered entities by criminals and corrupt elites and include enhanced disclosure requirements for directors, shareholders and persons filing information with Companies House.

In this issue:Equity capital marketsNEX Exchange consults on changes to its Growth Market rules

NEX Exchange has published a consultation paper setting out proposed changes to the NEX Exchange Growth Market Rules for Issuers (Rules). The consultation period ends on 31 May 2019. The main reason for the consultation is to reflect the changes being brought in by the Prospectus Regulation (EU) 2017/1129 in July 2019, introducing the new EU growth prospectus for certain issues by small and medium-sized enterprises (SMEs). The EU growth prospectus will have a standardised format and allow reduced disclosure requirements.

For further information, see: LNB News 02/05/2019 35.

Corporate governanceBEIS consults on proposals to improve transparency in companies and to provide greater protection against fraud

The Department for Business, Energy and Industrial Strategy (BEIS) has published a consultation paper—Corporate Transparency and Registration Reform. The reforms seek to address the misuse of UK registered entities by criminals and corrupt elites and include enhanced disclosure requirements for directors, shareholders and persons filing information with Companies House. The consultation, which closes on 5 August 2019, is organised into four key areas: (a) knowing who is setting up, managing and controlling corporate entities, (b) improving the accuracy and usability of data on the Companies Register, (c) protecting personal information and (d) ensuring compliance, sharing intelligence and certain other measures.

For further information, see: LNB News 07/05/2019 2.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a weekly basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

New and updated contentNew Brexit toolkit

Lexis®PSL has released a complete redesign of the Brexit toolkit, which includes a refreshed homepage, revised Practice Area sections and a link to our new SI summaries page.

Our Brexit toolkit provides easy access to a wide range of Brexit content, making it quicker and easier for you to find the information you need.

The Brexit toolkit can be accessed here or from your Practice Area home page.

Dates for your diary
DateDevelopment
31 May 2019Deadline for feedback on NEX Exchange’s consultation regarding its Growth Market Rules for Issuers.
The main reason for the consultation is to reflect the changes being brought in by the Prospectus Regulation in July 2019, introducing the new EU growth prospectus for certain issues by SMEs. The EU growth prospectus will have a standardised format and allow reduced disclosure requirements.
For further information, see: LNB News 02/05/2019 35.
7 June 2019Closing date for the BEIS call for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing—in February 2019—the terms of reference for the independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audits on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs and to serve the interests of other stakeholders, as well as the public interest.
For further information, see: LNB News 10/04/2019 85.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&As added this week:

  1. When transferring the business and assets of an unincorporated association with several hundred members to a new limited company, can the newly formed company be incorporated with just a few subscribers with bulk of the membership transferring later or do all the members need to be transferred from incorporation?

  2. What steps are required in order to transfer a deceased’s share in a limited liability partnership to their heirs?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our: Market Tracker round-up—3 May 2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes details of an FRC consultation on revisions to the Standards for Investment Reporting, which set requirements and provide guidance for reporting accountants carrying out engagements in UK investment circulars and a Companies Court case concerning applications for the sanction of two linked cross-border mergers of companies under the Companies (Cross-Border Mergers) Regulations 2007, SI 2007/2974.

In this issue:Equity capital marketsFRC consults on revising Standards for Investment Reporting

The Financial Reporting Council (FRC) has launched a consultation on revisions to the Standards for Investment Reporting (SIRs), which set requirements and provide guidance for reporting accountants carrying out engagements in UK investment circulars. Period for comment ends on 26 July 2019.

The SIRs set the requirements and provide guidance for reporting accountants for all engagements in connection with an investment circular prepared in connection with a securities transaction governed wholly or partly by the laws and regulations of the UK. The FRC is conducting a review of SIRs principally because the majority of the SIRs have not been updated since 2006–2008 and therefore amendments to the SIRs are required, both retrospectively and prospectively, to reflect changes in the UK regulatory landscape, including the establishment of the Financial Conduct Authority in place of the Financial Services Authority and changes to the Listing Rules and the City Code on Takeovers and Mergers.

For further information, see LNB News 01/05/2019 78.

Private M&A (intra-group reorganisation)Re Interoute Networks Ltd—application to sanction two linked cross-border mergers

The proceedings concerned two applications for the sanction, under the Companies (Cross-Border Mergers) Regulations 2007, SI 2007/2974, reg 16 (Cross-Border Mergers Regulations), of two linked cross-border mergers of companies.

The mergers involved 13 companies, all within a single group, the Interoute group of companies. Each merger was a merger by absorption under Cross-Border Mergers Regulations, SI 2007/2974, reg 2(2). The first merger involved eight companies, six of which were English, one Scottish and one Dutch (Merger 1). There was one surviving transferee, MDNX Group Holding Ltd (MDNX), which was an English company. All of the transferor companies were wholly owned subsidiaries of MDNX.

Immediately after Merger 1 completed, it was intended that the second merger of six companies would complete (Merger 2). MDNX, the transferee under Merger 1, was involved as transferor under Merger 2. MDNX would merge into its direct sister subsidiary, Interoute Networks Ltd (Interoute Networks). Interoute Networks was also an English company and was the transferee and sole surviving entity under Merger 2. There were four other transferor companies involved in Merger 2: three were English and one was Dutch. They were all direct sister subsidiaries of Interoute Networks.

The reason two mergers were being contemplated, rather than a single merger, was that if there was a single cross-border merger, the Dutch regulations would otherwise require an expensive and time-consuming audited report because the Merger 1 companies were not direct sister companies of Interoute Networks, even though they were wholly owned within the same group. Under each merger, all of the assets and liabilities of each transferred company would be transferred to the transferee MDNX or Interoute Networks. Each of the transferor companies would be dissolved without going into liquidation as required under the Cross-Border Mergers Regulations, SI 2007/2974, reg 2(2)(e). The purpose of the two mergers was to reduce the number of subsidiaries within the group in an economical and efficient manner.

The Companies Court decided that: (i) the formal requirements under reg 16(1) had been met; and (ii) the court did have discretion to approve the merger. In considering whether it had discretion to approve the merger, the court applied the test set out in Re Diamond Resorts (Europe) Ltd [2012] EWHC 3576 (Ch), namely whether the court was satisfied that the proposed merger did not adversely affect any stakeholder in any of the merging companies (whether shareholder, employee or creditor) in any material way, and, further, that there was no other good reason why approval of the proposed merger should be refused. Applying that test, in the case of the two mergers, the potential for objection to the mergers was very difficult to see. Those were essentially intra-group mergers intended to render more efficient the corporate structure of the group. There was absolutely no prejudice to anyone in the mergers going ahead. Accordingly, the Diamond Resorts test had been satisfied.

For further information, see Re Interoute Networks Ltd [2019] EWHC 1030 (Ch).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a weekly basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

New and updated contentNew Brexit toolkit

Lexis®PSL has released a complete redesign of the Brexit toolkit, which includes a refreshed homepage, revised Practice Area sections and a link to our new SI summaries page.

Our Brexit toolkit provides easy access to a wide range of Brexit content, making it quicker and easier for you to find the information you need.

The Brexit toolkit can be accessed here or from your Practice Area home page.

Dates for your diary
DateDevelopment
7 June 2019Closing date for the Department for Business, Energy and Industrial Strategy’s (BEIS) call for views on the quality and effectiveness of statutory audit in the UK. This follows BEIS publishing—in February 2019—the terms of reference for the independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market.
The review is seeking views, information and evidence from anyone with a direct or indirect interest in UK audits on the extent of the assurance that audit currently provides to users of financial statements and how it might develop to better meet those users' needs and to serve the interests of other stakeholders, as well as the public interest.
For further information, see: LNB News 10/04/2019 85.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&As added this week:

  1. How can a partner be removed from a general partnership?

  2. Is an unquoted holding company required to disclose its corporate governance arrangements if it has no customers or suppliers?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker round-up—26 April 2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes the European Parliament resolutions on the Commission’s proposal for a directive amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions, for a directive amending Directive (EU) 2017/1132 regarding the use of digital tools and processes in company law and for a regulation to amend the Market Abuse Regulation and the new Prospectus Regulation as regards the promotion of the use of SME growth markets. It also covers the CMA’s final report into the UK statutory audit market and the FCA’s approach to supervision and enforcement.

In this issue:Equity Capital Markets (AIM)Commission welcomes progress as European Parliament approves CMU package including reform to covered bonds, SME growth markets, sustainability disclosures and EMIR

The European Commission has welcomed the European Parliament's final votes on legislation putting in place the building blocks of a capital markets union, including the adoption of the Commission's proposal for a regulation to amend the Market Abuse Regulation and the Prospectus Regulation on the promotion of the use of SME growth markets.

For further information, see: LNB News 18/04/2019 36.

Company incorporationDirective requiring online company registration passes through parliament

Directive 2017/1132/EU—first proposed by the European Commission back in April 2018 (see: LNB News 27/04/2018 1)—has passed through the European Parliament on its first reading on 18 April 2019. The Directive requires all Member States to have a fully online process of registration for companies in an effort to lessen inefficiencies and unnecessary costs and delays. Member States will need to ensure that it is possible to upload every company document online and to identify company founders by the use of digital means such as e-ID, digital signatures or video-conference.

For further information, see: LNB News 24/04/2019 62.

Financial services regulation for corporate lawyersFCA publishes its approach to enforcement

The Financial Conduct Authority (FCA) has published its ‘Approach to enforcement’ document, which sets out how the FCA identifies and attempts to drive out behaviour that fails to meet its standards, or is dishonest or unlawful. The document follows the FCA’s March 2018 ‘Our approach to enforcement’ consultation paper

For further information, see: LNB News 24/04/2019 43.

FCA publishes its approach to supervision

The FCA has published its ‘Approach to supervision’ document, which sets out the FCA’s role in ensuring fair and honest markets, why and how the FCA prioritises its supervision work and how, in practice, it supervises the firms and individuals it regulates.

For further information, see: LNB News 24/04/2019.

Additional Corporate updates this weekCMA market study: Final report recommends overhaul of UK audit market

On 18 April 2019, the Competition and Markets Authority (CMA) published its final report following its market study into the UK statutory audit market. The market study found serious competition concerns and recommends changes to legislation to improve the audit sector for the benefit of both savers and investors. The CMA launched its market study in October 2018 following the collapse of high-profile companies such as construction firm Carillion (audited by KPMG) and has identified several reasons why it believes audit quality is falling short, including companies choosing their own auditors based on the best ‘cultural fit’ or ‘chemistry’ rather than those who offer the toughest scrutiny, and inadequate choice and competition, with the Big Four audit firms conducting 97% of the audits of the biggest companies. To address its concerns, the CMA recommendations include separation of audit and advisory businesses, with separate management and accounts; a mandatory joint audit system, with Big Four and non-Big Four firms collaborating on an audit; and statutory regulatory powers to increase accountability of those appointing auditors. The CMA resisted calls for breakup of the Big Four, but this option could be revisited within five years if the profession does not improve. The government now has 90 days to respond to the recommendations.

For further information, see: LNB News 18/04/2019 13.

Final report of CMA audit market study recommends sweeping reforms

Corporate analysis: The CMA has published its final report into the workings and failings of the UK statutory audit services market, with recommendations to address serious competition problems in the UK audit industry.

For further information, see News Analysis: Final report of CMA audit market study recommends sweeping reforms.

European Parliament adopts merger and divisions Directive

Directive 2017/1132—proposed by the European Commission in April 2018—has been adopted by the European Parliament on its first reading on 18 April 2019. The Directive endeavours to make it easier for companies to merge, divide or transfer their registered seat within the Single Market. The Directive also ensures that these processes do not detrimentally impact the rights of company employees, creditors and minority shareholders.

For further information, see: LNB News 24/04/2019 73.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
30 April 2019Deadline for comments on DP19/1: Building a regulatory framework for effective stewardship.
On 30 January 2019, the FCA and the Financial Reporting Council (FRC) issued DP 19/1 concerning the importance of effective stewardship. The objective of DP 19/1 is to advance the debate about what effective stewardship should look like, what the minimum expectations should be for financial services firms that invest for clients and beneficiaries, what higher standards the UK should aspire to and how these might best be achieved. It also considers the potential public and private benefits of improved stewardship.
For further information, see: LNB News 30/01/2019 105.
30 April 2019Deadline for comments on the FRC’s consultation on business reporting of intangible assets.
The FRC has published a consultation paper, which invites comments on how business reporting of intangible assets could be improved. The FRC argues that intangible assets are increasingly important in a knowledge-based economy and notes concerns that financial statements often fail to recognise important intangibles, such as intellectual capital.
For further information, see: LNB News 06/02/2019 37.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—18 April2019.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week's edition of Corporate highlights includes news of an update to our Public M&A trend report and the latest on Brexit, eg the issue by HMT of equivalence directions for EEA-approved prospectuses and EEA-adopted IFRS. It also covers an updated FCA technical note on periodic financial information and inside information, a consultation on the transposition of the Fifth Money Laundering Directive and two recent cases on contractual law issues.

In this issue:BrexitEuropean Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No 2) Regulations 2019

SI 2019/859: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) in preparation for Brexit. This enactment amends the definition of ‘exit day’ in EU(W)A 2018, s 20(1) from 12 April 2019 at 11 pm to 31 October 2019 at 11 pm, and consequently amends EU(W)A 2018, s 20(2). Various provisions of EU(W)A 2018, including the repeal of the European Communities Act 1972, and a wide range of primary and secondary legislation, take effect or come into force on exit day. It comes into force immediately after 3.15 pm on 11 April 2019.

For further information, see: LNB News 12/04/2019 11.

Technical update to the Withdrawal Agreement following Article 50 extension

The Department for Exiting the European Union has published correspondence with the European Commission confirming agreement to a technical change to the Withdrawal Agreement. The amendment alters the recitals and Article 185 to reflect the agreed extension to the Article 50 withdrawal period.

For further information, see LNB News 12/04/2019 42.

HM Treasury makes equivalence directions for EEA-approved prospectuses and EEA-adopted IFRS

HM Treasury (HMT) has made the Prospectus Directive and Transparency Directive Equivalence Directions 2019 (the Directions) in exercise of the powers conferred by Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, SI 2019/541, reg 2(1) and Sch 1, para 9.

The Directions recognise the equivalence for the purposes of the Prospectus Rules of prospectuses drawn up under the law of each EEA state. The Directions also recognise that EEA-adopted International Financial Reporting Standards are equivalent to UK accounting standards for the purposes of the Transparency Directive and the Prospectus Directive.

For further information, see: LNB News 12/04/2019 65.

Public company takeoversUK Public M&A Trend Report update—1 January–31 March 2019

Lexis®PSL Corporate and Market Tracker has conducted research to examine the current trends in UK public M&A for the period 1 January 2019 to 31 March 2019.

For further information, see: UK Public M&A Trend Report update—1 January–31 March 2019.

Corporate crime for corporate lawyersHMT consults on transposition of MLD5

HMT has issued a consultation document on the steps that the UK government proposes to take to meet the UK’s obligation to transpose the Fifth Money Laundering Directive (MLD5) into national law and on the potential costs and benefits of the changes considered. The closing date for comments is 10 June 2019.

For further information, see: LNB News 15/04/2019 77.

Financial services regulation for corporate lawyersFCA publishes updated technical note on periodic financial information and inside information

The Financial Conduct Authority (FCA) has published an updated technical note on periodic financial information and inside information (FCA/TN/506.2). The updated technical note considers the requirement under the Regulation (EU) 596/2014, Market Abuse Regulation for an issuer to inform the public as soon as possible of any inside information directly concerning that issuer, in the context of periodic financial information.

For further information, see: LNB News 16/04/2019 14.

Additional Corporate updates this weekDirector and company secretary induced company to breach contract (Antuzis v DJ Houghton Catching Services Ltd)

In Antuzis v DJ Houghton Catching Services Ltd [2019] EWHC 843 (QB), the claimants were granted summary judgment against the first defendant company on their claim for breach of their employment contracts, arising from alleged unpaid wages, lack of holiday pay and unlawful deductions and fees. The court further ruled, on a preliminary issue, that the second and third defendants (who were, respectively, the director and secretary of the company) were jointly and severally liable to the claimants for inducing the first defendant company's breaches of contract. This was on the basis that they had not been acting bona fide in relation to the company and, on the evidence, they had both 'actually realised' that what they had been doing had involved causing the company to breach its contractual obligations towards the claimants.

For further information, see Antuzis v DJ Houghton Catching Services Ltd [2019] All ER (D) 78 (Apr).

Heads of terms formed a binding agreement, which was wrongfully terminated (Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd

Jeffrey Chapman QC, barrister at Fountain Court Chambers, gives an overview of Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd [2019] EWHC 507 (Ch). Relations between two companies that had partnered in the retail electricity market ceased, raising questions as to whether heads of terms formed a binding agreement, issues of contractual breach and termination and difficulties in the interpretation of the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (including whether electricity is to be classed as ‘goods’).

For further information, see News Analysis: Is electricity considered ‘goods’? (Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd and others).

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

Dates for your diary
DateDevelopment
30 April 2019Deadline for comments on DP 19/1: Building a regulatory framework for effective stewardship.
On 30 January 2019, the FCA and the Financial Reporting Council (FRC) issued DP 19/1 concerning the importance of effective stewardship. The objective of DP 19/1 is to advance the debate about what effective stewardship should look like, what the minimum expectations should be for financial services firms that invest for clients and beneficiaries, what higher standards the UK should aspire to and how these might best be achieved. It also considers the potential public and private benefits of improved stewardship.
For further information, see: LNB News 30/01/2019 105.
30 April 2019Deadline for comments on the FRC’s consultation on business reporting of intangible assets.
The FRC has published a consultation paper, which invites comments on how business reporting of intangible assets could be improved. The FRC argues that intangible assets are increasingly important in a knowledge-based economy and notes concerns that financial statements often fail to recognise important intangibles, such as intellectual capital.
For further information, see: LNB News 06/02/2019 37.
Trackers

To track key legislative and regulatory developments, see our Trackers:

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

This week’s edition of Corporate highlights includes the latest updates on Brexit, the draft Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019, the Sir Donald Brydon Independent review into audit quality and effectiveness call for views and the Small Business, Enterprise and Employment Act 2015 (Commencement No 7, Consequential, Transitional and Savings Provisions) Regulations 2019.

In this issue:BrexitBrexit Bulletin—EU agrees to extend the Article 50 withdrawal period until 31 October

On 10 April 2019, the EU27 met to consider the UK’s request to extend the Article 50 withdrawal period beyond 12 April 2019. The UK had originally repeated its request for an extension until 30 June 2019. Following extended talks, the European Council adopted a decision, taken in agreement with the UK, providing for an extension until 31 October 2019 at the latest. The decision notes that the extension should last only as long as necessary, and no longer than 31 October 2019. The Withdrawal Agreement may enter into force on an earlier date if approval and ratification procedures are completed sooner. On this basis, UK withdrawal would take place on the first day of the month following the completion of the ratification procedures or on 1 November 2019, whichever is the earliest. If the UK fails to adhere to the obligation to hold European Parliament elections, the extension will end on 31 May 2019.

The European Council decision confirms that the UK will remain an EU Member State for the duration of the extension, with full rights and obligations in accordance with Article 50 TEU. It also notes that the extension excludes any re-opening of the Withdrawal Agreement and the UK has a right to revoke its notification to withdraw from the EU at any time. These points were echoed in the remarks of European Council President Donald Tusk.

The European Council conclusions emphasised the position of the EU27 that the further extension cannot be allowed to undermine the regular functioning of the EU and its institutions. Taking note of the UK’s aim to avoid participating in the European Parliament elections, the decision confirms that if the UK fails to approve the Withdrawal Agreement by 22 May 2019 and is still a Member State on 23 May 2019, it will be under an obligation to hold the elections in accordance with EU law. If the UK fails to do so, the extension will end on 31 May 2019.

For further information, see: LNB News 11/04/2019 76.

Financial Services (Miscellaneous) (Amendment) (EU Exit) (No 2) Regulations 2019

SI 2019/Draft: These draft regulations are laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) in preparation for Brexit. This draft enactment is being laid in order ensure a coherent and functioning financial services regulatory regime once the UK leaves the EU. It is proposed to make amendments to a number of financial services EU exit statutory instruments and to an EU delegated regulation, correcting errors identified in legislation after it was made, making proposed amendments to ensure consistency between EU exit instruments and introducing a transitional provision. These proposed amendments will ensure that these instruments operate effectively after the UK leaves the EU. It comes into force on the day after the day on which these regulations are made.

For further information, see: LNB News 04/04/2019 35.

Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (EU Exit) Regulations 2019

SI 2019/834: This regulation is made in exercise of legislative powers under EU(W)A 2018 in preparation for Brexit. This regulation makes amendments to legislations in the field of private international law and, in particular, amends legislation determining the law applicable to contractual and non-contractual obligations in the case of conflict of laws. This regulation will address issues created by the UK leaving the EU so that they will continue to operate effectively after Brexit. It comes into force on exit day. This statutory instrument was updated from draft on 10 April 2019.

For further information, see: LNB News 14/02/2019 48.

AFME Q&A for issuers on enabling equity capital market mandates to continue in a no deal Brexit

The Association for Financial Markets in Europe has published a Q&A document to help issuers understand why UK investment banks and capital markets firms will require additional flexibility to ensure certain equity capital market mandates continue after a no deal Brexit without disruption.

For further information, see: LNB News 09/04/2019 5.

Directors and company secretariesCompanies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019

SI 2019/Draft: These draft regulations are laid before Parliament to implement in part Directive 2017/828/EU of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (the Directive). Articles 9a and 9b of the Directive are implemented to ensure that these provisions work with the framework already in place in UK legislation with regards to directors’ remuneration. The regulations come into force on 10 June 2019.

For further information, see: LNB News 09/04/2019 6.

Revised shareholder Rights Directive: amendments to the directors’ remuneration regime

Corporate analysis: The government has published draft regulations implementing parts of the revised Shareholder Rights Directive. The draft regulations update the existing UK legal framework relating to directors’ remuneration to make it consistent with the requirements of the Directive.

For further information, see News Analysis: Revised Shareholder Rights Directive: amendments to the directors’ remuneration regime.

AuditIndependent review of audit quality and effectiveness launches call for views

The Independent review into audit quality and effectiveness has launched a call for views on the quality and effectiveness of statutory audit in the UK. This follows the Department for Business, Energy and Industrial Strategy publishing—in February 2019—the terms of reference for the independent review by Sir Donald Brydon into the quality and effectiveness of the UK audit market. The consultation closes on 7 June 2019.

For further information, see: LNB News 10/04/2019 85.

Additional Corporate updates this weekSmall Business, Enterprise and Employment Act 2015 (Commencement No 7, Consequential, Transitional and Savings Provisions) Regulations 2019

SI 2019/816: Certain provisions of the Small, Business, Enterprise and Employment Act 2015 (SBEEA 2015) come into force in Scotland on 6 April 2019 pursuant to these regulations. The commenced provisions will bring into force for Scotland, specified provisions of SBEEA 2015 which were introduced in England and Wales by the Small Business, Enterprise and Employment Act 2015 (Commencement No 6 and Transitional and Savings Provisions) Regulations 2016.

For further information, see: LNB News 05/04/2019 83.

Additional news—daily and weekly news alerts

This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.

New and updated contentNew Practice Notes

We have published the following Practice Notes concerning the impact of Brexit:

  1. Brexit—impact on private M&A transactions

  2. Brexit—impact on corporate joint ventures

Dates for your diary
DateDevelopment
30 April 2019Deadline for comments on DP 19/1: Building a regulatory framework for effective stewardship.
On 30 January 2019, the Financial Conduct Authority and the Financial Reporting Council (FRC) issued DP 19/1 concerning the importance of effective stewardship. The objective of DP 19/1 is to advance the debate about what effective stewardship should look like, what the minimum expectations should be for financial services firms that invest for clients and beneficiaries, what higher standards the UK should aspire to and how these might best be achieved. It also considers the potential public and private benefits of improved stewardship.
LNB News 30/01/2019 105
30 April 2019Deadline for comments on the FRC’s consultation on business reporting of intangible assets.
The FRC has published a consultation paper, which invites comments on how business reporting of intangible assets could be improved. The FRC argues that intangible assets are increasingly important in a knowledge-based economy and notes concerns that financial statements often fail to recognise important intangibles, such as intellectual capital.

Read for later

Articles marked as Favorite are saved for later viewing.
close
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Separate tags by commas
To access this feature, please upgrade your account.
Start your free month
Free Preview