Essential Corporate News – Week ending June 3, 2016

Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.

On May 30, 2016 the European Securities and Markets Authority (ESMA) published a new Q&A, which provides responses to questions posed by the general public and competent authorities in relation to the practical application of the Market Abuse Regulation (MAR) framework. The Q&A is aimed at competent authorities to ensure that their supervisory activities and their actions are converging along the lines of the responses adopted by ESMA and at helping issuers, investors and other market participants by providing clarity on the content of the market abuse rules.

The Q&A currently includes one question which clarifies the scope of firms subject to the provision in Article 16(2) of MAR requiring them to detect and report suspicious orders and transactions. ESMA confirms that this requirement applies broadly and “persons professionally arranging or executing transactions” will include buy side firms such as UCITS management companies, alternative investment fund managers (AIFMs) and firms professionally engaged in trading on own account.

The Q&A will be updated where relevant as and when new questions or issues arise.

(ESMA, Q&A on the Market Abuse Regulation (ESMA/2016/738), 30.05.16)

On May 31, 2016, the European Commission published additional non-binding Q&A on the implementation of the new statutory audit framework which will apply from June 17, 2016. These Q&A are in addition to those published in September 2014 and February 2016.

The Q&A discuss the following:

• when an entity becomes a public-interest entity (PIE) and the duration of the audit engagement;
• the application of the new rules to non-listed PIEs;
• the regime applying to audit engagements entered into after the new rules entered into force;
• means of extending the maximum duration of audit engagements following a public tender;
• means of extending the maximum engagement period following a joint audit;
• the application of the new three-year cooling-off requirements for key audit partners;
• the application of the transitional regime; and
• the impact of the news rules on the composition of audit committees.

(European Commission, Additional Q&A - Implementation of the New Statutory Audit Framework, 31.05.16)