Publication
GCR Guide to Data & Antitrust – Competition law and data
Miranda Cole and Francesco Salis from our Brussels office are the authors of a chapter on the evolving view of data in the application of competition law.
Global | Publication | November 3, 2017
Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.
On November 3, 2017 the Investment Association published their updated Principles of Remuneration (Principles) which set out, through over-arching Principles and general guidance, the views of Investment Association members on the role of shareholders and directors in relation to remuneration and the manner in which it should be determined and structured. While predominantly aimed at Main List companies, the Investment Association notes that the Principles are also relevant to companies on other public markets, such as AIM, and other entities.
Key changes from the October 2016 Principles include the following:
On November 3, 2017 the Investment Association wrote to chairs of remuneration committees outlining key changes to their updated Principles of Remuneration and highlighting items of focus for their members in the 2018 AGM season.
Issues to be considered for 2018 AGMs include the following:
On October 27, 2017 Institutional Shareholder Services (ISS) published its 2018 benchmark policy consultation, seeking views on changes to certain of its voting policies for 2018. In relation to its UK/Ireland policy and its European policy, ISS is considering adding a new policy on virtual/hybrid shareholder meetings. While ISS notes that the practice of holding virtual shareholder meetings is rare in the UK, it comments that a growing number of companies have sought shareholder approval for article amendments that allow for the possibility of hybrid or virtual shareholder meetings in the future. While in continental Europe the practice of holding virtual or hybrid shareholder meetings has not been observed, it notes that it is thought that the practice could emerge at some point if UK and US-based companies continue to adopt it.
Key changes under consideration
Under the proposed policy, ISS will generally recommend FOR proposals that allow for the convening of hybrid shareholder meetings and will generally recommend AGAINST proposals that allow for the convening of virtual-only shareholder meetings.
ISS is proposing these changes in light of investors’ views on virtual shareholder meetings. It notes that some investors are concerned about moves to completely eliminate physical shareholder meetings, arguing that virtual meetings may hinder meaningful exchanges between management and shareholders and enable management to avoid uncomfortable questions. However, investors generally support “hybrid” meetings, where companies employ technological means to allow for virtual participation as a supplement to the physical shareholder meeting.
Questions for comment
While ISS welcomes any comments on the topic, it specifically seeks feedback on the following:
Next steps
Comments are requested by November 9, 2017. ISS expects to publish its final 2018 benchmark policy changes in the second half of November 2017 and it will apply the revised policies to shareholder meetings on or after February 1, 2018.
On October 30, 2017 the City of London Law Society (CLLS) and Law Society Company Law Committees’ Joint Working Parties on Market Abuse, Share Plans and Takeovers Code updated their Q&As on the Market Abuse Regulation (MAR) in light of ESMA’s updated Q&As on MAR published in July 2017.
Q&A 7 in Part A, on managers’ transactions, asks whether, where a director of a company whose shares are traded on AIM (Company A), who is also a person discharging managerial responsibilities (PDMR) of, and holds less than 50 per cent of the shares in, Company B, Company B is a “person closely associated with the director” so that Company B must notify Company A under Article 19(1) of MAR of transactions in Company A’s shares conducted on its own account.
The Q&A refers to Q7.7 of ESMA’s Q&As and has been amended to set out the circumstances in which Company B will be a person closely associated to the director, a PDMR of Company A. These include where the managerial responsibilities of Company B are discharged by the director, or if the director took part in or influenced the decision of Company B to carry out the transaction in Company A’s financial instruments. To avoid making Company B a “person closely associated” in these circumstances, the Q&As state that the director should not vote on, participate in any discussion in relation to or otherwise influence Company B to carry out a transaction in Company A’s financial instruments. The Q&A says that it will be sufficient for the director to recuse himself from any board meeting discussing or relating to Company A unless, on the specific facts, the director otherwise exerted an influence on Company B’s decision.
However, since MAR does not define “control”, this should be given its ordinary meaning (ie a majority of the voting rights) so if the director owned 60 per cent of Company B, this would make Company B a person closely associated to the director even if the director did not take part in or influence any decision of Company B to carry out a transaction in the financial instruments of Company A.
On October 30, 2017 the European Securities and Markets Authority (ESMA) updated its Q&As on its Alternative Performance Measures guidelines (APM Guidelines). ESMA’s APM Guidelines aim to promote the usefulness and transparency of APMs in prospectuses and regulated information.
ESMA has added six new Q&As:
On October 27, 2017 the European Securities and Markets Authority (ESMA) published the priorities to be considered by listed companies and their auditors when preparing and auditing their 2017 financial statements. These priorities are set out in the annual Public Statement on European common enforcement priorities in which ESMA promotes the consistent application of International Financial Reporting Standards (IFRS).
The common enforcement priorities for the 2017 year-end are as follows:
On October 30, 2017 the Financial Reporting Council (FRC) published FRED 69 following its annual review of FRS 101 Reduced Disclosure Framework. This annual review considers whether additional disclosure exemptions are needed as IFRS evolve and it is also used to respond to stakeholder feedback about other possible improvements.
Having considered the 2017/18 annual review of FRS 101, the FRC is proposing no amendments to FRS 101. More detailed consideration of IFRS 17 Insurance Contracts will be required, but this work will be deferred until a clearer picture of the progress with the endorsement of the standard is known.
The FRC asks for comments by February 2, 2018. It will publish a summary of the consultation responses, either as part of, or alongside, its final decision.
Publication
Miranda Cole and Francesco Salis from our Brussels office are the authors of a chapter on the evolving view of data in the application of competition law.
Publication
Miranda Cole, Lara White and Christoph Ritzer from our Brussels, London and Frankfurt offices are the authors of a chapter on how the interplay between competition and privacy law is affecting online advertising.
Publication
Unannounced inspections by competition authorities, usually called “dawn raids”, are undoubtably one of the most efficient tools for collecting evidence and enforcing competition rules. They are also an area where investigators test (and sometimes exceed) the boundaries of companies’ procedural rights.
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