Publication
Generative AI
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Global | Publication | July 27, 2018
Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.
On July 23, 2018 the Department for Business, Energy & Industrial Strategy (BEIS) published a draft Registration of Overseas Entities Bill that will require overseas entities desiring to own land in the UK to take steps to identify their beneficial owner(s) and to register them. With the Bill, BEIS also published an overview document which both provides an overview of the Bill and seeks views on how clauses within the Bill will be implemented in practice.
At the 2016 Anti-Corruption Summit in London, the UK Government made a commitment to establish a public register of beneficial owners of non-UK entities that own or buy UK property, or which participate in UK Government procurement over certain thresholds. The register of overseas entities will be held by the Registrar of Companies and will for the most part be accessible to the public, with the aim being to increase transparency and trust in the UK property market. Since the 2016 commitment, a call for evidence was issued in 2017 and a Government response was published earlier in 2018.
The Bill will require any overseas entity that wishes to own land in the UK to take steps to identify their beneficial owner(s) and to register them. Once registered in the register of overseas entities, an overseas entity will obtain an overseas entity ID and will be required to update its information annually, until such time as it successfully applies to be removed from the live register of overseas entities. In order to comply with the updating duty, the overseas entity will have to annually deliver updated information (or confirm that the information in relation to it on the overseas entities register is up-to-date) and statements required for registration and will have to have taken steps to identify registrable beneficial owners (including sending notices to such beneficial owners). Failure to provide an update on the information held on the register is an offence under the Bill, as is delivering (or causing to be delivered) misleading, false or deceptive information.
In order to register title to land, an overseas entity will have to be registered with Companies House and to have complied with the updating duty. Although registration is prima facie voluntary, the Bill provides that not doing so will result in: (1) an overseas entity being unable to register as proprietor of land in the UK (necessary for obtaining full legal title) via the three land registries of England and Wales, Scotland and Northern Ireland; and (2) certain dispositions made by an overseas entity registered proprietor being incapable of registration at the land registries. In practice, this means that a failure to register with Companies House, or to comply with the updating duty, will in most cases affect the ability of the entity to either sell or lease the land, or create a charge over it as any purchaser or lessee would be unable to register the disposition with the relevant land registry in any part of the UK and therefore be reluctant to transact with the overseas entity.
The Government has been considering how to deliver the central government procurement element of the policy to maximise its effect against corruption and money laundering. The Government has decided that the most effective way to achieve the required level of transparency is to require information about beneficial ownership as a condition of awarding contracts that meet certain conditions or thresholds. This information will be published under the provisions of this Bill.
The information about beneficial ownership that will be required for procurement purposes will, as a minimum, be equivalent to that proposed for the register of overseas entities, and it will be published in an equally transparency way. The Government is currently considering mechanisms including the Contracts Finder Service (currently used to publish contract award information) to achieve this.
Comments are requested by September 17, 2018. The Government anticipates that, following Royal Assent and the making of secondary legislation, the register of overseas entities will be operational in 2021.
(Overview Document: Draft Registration Of Overseas Entities Bill – 23.07.18)
On July 24, 2018 the London Stock Exchange (Exchange) published AIM Notice 53 on the Exchange’s consultation on proposed changes to the AIM Disciplinary Procedures and Appeals Handbook (Handbook).
The Exchange published a Discussion Paper – AIM Rules Review in July 2017 in order to seek initial market views on approaches to breaches of the AIM Rulebooks and the proposed changes are a result of the review of the Handbook proposed in the Discussion Paper. Respondents encouraged the Exchange to review ways to further improve the efficiency of the process for taking any enforcement action. The proposed changes to the Handbook are designed to take into account feedback received but do not represent a change to the Exchange’s overall approach to investigation and enforcement.
Comments and feedback on the consultation are requested by September 10, 2018. The Exchange will confirm the results of the consultation as soon as reasonably practicable following the end of the consultation period.
(LSE: Proposed AIM Disciplinary Procedures and Appeals Handbook – 24.07.18)
On July 24, 2018 the Department for Business, Energy & Industrial Strategy (BEIS) published a White Paper setting out the next stage in the Government’s reform of its powers in relation to protecting national security from hostile actors’ acquisition of control over entities or assets.
BEIS published a Green Paper on the review of national security implications of foreign ownership or control in October 2017 which proposed both short-term and longer-term reforms. The short-term reforms were to address risks in emerging technology industries and the Government amended the thresholds for the turnover and share of supply tests in three areas of the economy in June 2018 by way of amendments to the Enterprise Act 2002.
The White Paper proposes how the Government will be able to assess more fully transactions that may give rise to national security risks. It will encourage notification of investments and other events that may cause national security concerns, but reserve the right to call in transactions or other events (including after they have taken place for a prescribed period) to undertake a national security assessment.
The Government is seeking views on the trigger events parties consider they would notify to the Government (such as an acquisition of control or significant influence over an entity or asset) and a detailed statement of policy intent will set out what and how the Government expects national security risks to arise from trigger events.
The Government plans to introduce a clear, transparent and predictable screening process for notifications that raise significant concerns and it will then have the ability to impose conditions to prevent or mitigate any risks, including the ability to block or unwind the trigger event. Criminal and civil sanctions will then apply if remedies imposed on a trigger event are not complied with or orders served on parties are not complied with.
Consultation responses must be submitted by October 16, 2018, and the Government will use the responses to the White Paper to refine the proposals.
On July 26, 2018 the London Stock Exchange (Exchange) published a new edition of Inside AIM in relation to the preparation for the corporate governance changes that take effect from September 2018.
From September 28, 2018 AIM companies will be required to disclose details of the recognised corporate governance code that they have decided to apply, how they comply with that code and, where they depart from the code, an explanation of the reasons for doing so.
The Exchange notes the following:
AIM companies will be required to review their corporate governance disclosures annually and, in most cases, this review will take place at the same time as the company prepares its annual report and accounts.
A company's website should include the date when it last reviewed its compliance with its chosen code and, as part of that review, update its AIM Rule 26 disclosures to remain accurate.
Disclosure on a company's website should be clearly presented and easily accessible from the AIM Rule 26 landing page on its website. It is acceptable for the statement to incorporate by reference provided that the material is freely available and the statement clearly indicates where a copy of that material can be read or obtained.
If an AIM company has not yet made disclosure against a recognised code in its annual report, the corporate governance statement must be disclosed on its website by 28 September 2018, in accordance with AIM Rule 26.
The Exchange has not prescribed a list of recognised codes, however it refers to the QCA Corporate Governance Code and the UK Corporate Governance Code as established benchmarks for AIM company codes. AIM companies should ensure they stay informed of any changes to the recognised code they apply.
For AIM companies that have a dual listing in their home state, it is acceptable to report using an appropriate standard in their home jurisdiction.
It is for investors to determine whether the corporate governance policies, practices and any reasons stated for non compliance with the adopted code, are appropriate for the AIM company, taking into account factors such as its stage of development, sector and size.
(LSE: Inside AIM - Preparation for Corporate Governance Changes – 26.07.18)
Publication
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Publication
We are delighted to announce that Al Hounsell, Director of Strategic Innovation & Legal Design based in our Toronto office, has been named 'Innovative Leader of the Year' at the International Legal Technology Association (ILTA) Awards.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023