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Essential Corporate News – Week ending February 12, 2016

Publication February 12, 2016


Introduction

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

BIS: Summary guide for companies - Register of People with Significant Control

The Department for Business, Innovation and Skills (BIS) has published its summary guidance for companies on what they should do to identify the People with Significant Control (PSCs) of their company. It comments that if a company has a simple company ownership and control structure, it may not need to take account of additional guidance. This summary follows publication of the final draft statutory guidance for both companies and LLPs on the meaning of significant influence and control on January 27, 2016 and non-statutory guidance for companies, Societates Europaeae and limited liability partnerships on the new regime in February 2016. Separate guidance for PSCs is to be published by BIS shortly as the new PSC regime comes into effect on April 6, 2016.

The summary guidance provides a brief explanation of the PSC requirements for companies and covers the following matters:

  • What the PSC register is
  • What a company needs to do to comply
  • Identifying PSCs
  • Information to be entered on the PSC register
  • Ensuring the information is obtained
  • Recording the information
  • Providing the information to Companies House
  • Updating the information
  • What happens if the requirements are not met

(BIS, PSC register summary guidance, 08.02.16)

BIS: Non-statutory guidance for companies, Societates Europaeae and LLPs - Register of People with Significant Control

The Department for Business, Innovation and Skills (BIS) has published its non-statutory guidance for companies, Societates Europaeae (SE) and limited liability partnerships (LLPs) on what they should do to identify the People with Significant Control (PSCs) of their company, SE or LLP. This follows publication of the final draft statutory guidance on the meaning of significant influence or control for both companies and LLPs on January 27, 2016. Separate guidance for PSCs is to be published by BIS shortly as the new PSC regime comes into effect on April 6, 2016.

The non-statutory guidance provides a detailed explanation of the PSC requirements for companies, SEs and LLPs and it covers the following matters:

  • The regime for registering PSCs
  • Identifying PSCs
  • Information to be entered on the PSC register
  • Updating PSC information
  • Public and protected information
  • Companies keeping the information on their own register at Companies House
  • Understanding the conditions for being a PSC in detail
  • What to do when the information for the PSC register cannot be obtained

The non-statutory guidance also includes five annexes as follows:

  • Annex 1 - Regime for suppressing PSC information in exceptional circumstances
  • Annex 2 - Official wording for entering on the PSC register
  • Annex 3 - Example notices to be served by companies including example warning and restrictions notices
  • Annex 4 - Guidance for LLPs
  • Annex 5 -  Example notices to be served by LLPs

(BIS, PSC guidance for companies, LLPs, and SEs, 08.02.16)

The Companies Act 2006 (Amendment of Part 21A) Regulations 2016

On February 8, 2016 The Companies Act 2006 (Amendment of Part 21A) Regulations 2016 were published along with an explanatory memorandum. The Regulations amend sections 790C(4)(a) and 790C(8)(a) Companies Act 2006. The Regulations remove the unnecessary requirement to record every company in a chain of companies on a company’s register of people with significant control over the company if there is a legal entity in the chain which not a relevant legal entity.

The amendment to section 790C(4)(a) has the effect that an individual with significant control over a company is registrable in relation to that company if the individual holds an interest in the company directly, or if each of the individual’s indirect majority stake interests is not held through at least one relevant legal entity.

The amendment to section 790C(8)(a) has the effect that a relevant legal entity, as defined section 790C(6), is registrable in relation to a company if the relevant legal entity holds an interest in the company directly, or if each of its indirect majority stake interests is not held through at least one other relevant legal entity.

The Regulations will come into force on April 5, 2016.

(The Companies Act 2006 (Amendment of Part 21A) Regulations 2016, 08.02.16)

The Companies (Address of Registered Office) Regulations 2016 - Draft

On February 8, 2016 the draft Companies (Address of Registered Office) Regulations 2016 (the draft Regulations) were published, along with an explanatory memorandum. The draft Regulations implement section 1097A Companies Act 2006, as inserted by section 99 Small Business, Enterprise and Employment Act 2015, by introducing a new administrative procedure to allow the Registrar of Companies to change the registered office address of a company or limited liability partnership (LLP) where, upon application by a third party, the Registrar considers that the entity is not authorised to use that address. If the company or LLP fails to provide satisfactory evidence that it is authorised to use the address, its registered office address will be changed to an alternative address, a PO Box at Companies House.

The draft Regulations will come into force on April 6, 2016.

(The Companies (Address of Registered Office) Regulations 2016, 08.02.16)

The Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016 - Draft

On February 8, 2016 the draft Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016 (the draft Regulations) were published, along with an explanatory memorandum. The draft Regulations amend the Registrar of Companies and Applications for Striking Off Regulations 2009 (the 2009 Regulations) and result from section 102 Small Business, Enterprise and Employment Act 2015 which amends section 1095 Companies Act 2006.

The 2009 Regulations allow specified persons to make applications to the Registrar of Companies to remove inaccurate or invalid information from the public register. However, if any valid objection to an application is made, the Registrar has to reject the application. The draft Regulations introduce a new administrative procedure for the removal of information on the public register which names a person as a director in cases where the application for removal is made by or on behalf of that person. Where such an application is made by a person named as a director, in order to prevent that person’s details from being removed from the register, the company concerned must provide evidence to the Registrar that the person consented to act as a director of the company.

The draft Regulations will come into force on April 6, 2016.

(The Registrar of Companies and Applications for Striking Off (Amendment) Regulations 2016, 08.02.16)

European Commission: Proposal to extend MiFID II implementation date

On February 10, 2015 the European Commission published two proposals to amend Directive 2014/65/EU (MiFID II) and Regulation (EU) No 600/2014 (MiFIR), as well as an accompanying press release, with the effect of extending the MiFID II implementation date by one year to January 3, 2018. The change is due to the need for a complex technical infrastructure to be established to ensure the MiFID II package works effectively. The European Securities and Markets Authority has informed the European Commission that neither competent authorities, nor market participants, would have the necessary systems ready by the initial implementation date of January 3, 2017.

The two proposals are as follows:

  • A Directive amending MiFID II, which will grant national competent authorities and market participants one additional year to comply with MiFID II, with the new deadline being January 3, 2018.
  • A Regulation amending MiFIR, the Market Abuse Regulation (MAR) and the Central Securities Depositories Regulation to account for the change to the MiFID II implementation date. Additionally, MAR would be amended to provide that references to MiFID II and MiFIR before January 3, 2018 shall be read as references to the earlier MiFID Directive; and that provisions referring to concepts that will be introduced by MiFID II will not apply until the new implementation date.

The European Commission note that the extension will not have an impact on the timeline for adoption of the 'Level II' implementing measures under MiFID II and MiFIR. The European Commission will proceed with their adoption irrespective of the new MiFID II implementation date, in order to provide legal certainty for the new provisions.

(European Commission, Directive of the European Parliament and of the Council amending Directive 2014/65/EU on markets in financial instruments as regards certain dates, 10.02.16)

(European Commission, Regulation of the European Parliament and of the Council amending Regulation (EU) No 600/2014 on markets in financial instruments, Regulation (EU) No 596/2014 on market abuse and Regulation (EU) No 909/2014 on improving securities settlement in the European Union and on central securities depositories as regards certain dates, 10.02.16)

ESMA: Assessment of Turkish laws and regulations under the Prospectus Directive

On February 8, 2016 the European Securities and Markets Authority (ESMA) published an opinion having assessed the requirements of Turkish laws and regulations on prospectuses in order to compare them to EU requirements set out in the Prospectus Regulation (EC No. 809/2004) regarding minimum disclosure requirements for share prospectuses.

Article 20 of the Prospectus Directive provides that the competent authority of the home Member State of issuers having their registered office in a third country may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up in accordance with the legislation of a third country. ESMA’s assessment and subsequent opinion were carried out under Article 29(1)(a) of the ESMA Regulation and with regard to the “Framework for the assessment of third country prospectuses under Article 20 of the Prospectus Directive”.

ESMA concludes that a prospectus drawn up according to Turkish laws and regulations can constitute a valid prospectus under the Prospectus Directive for the purposes of its approval by the home competent authority of a Member State.

Furthermore, a wrap accompanying a Turkish prospectus for shares to be approved by a competent authority of a home Member State as a prospectus under the Prospectus Directive, is not necessary to make it equivalent with the requirements under the Prospectus Directive, provided that the prospectus contains financial statements in accordance with IFRS. ESMA notes that this opinion does not limit the discretion of national competent authorities to require additional information either in the prospectus or a wrap.

(ESMA, Assessment of Turkish laws and regulations on prospectuses, 08.02.16)

BIS: Chair and deputy chair appointed to new women on boards review

On February 7, 2016 the Department for Business, Innovation and Skills (BIS) announced that a chair and deputy chair have been appointed to lead a new independent review on increasing representation of women in the executive level of FTSE 350 companies. The chair of GlaxoSmithKline, Sir Philip Hampton, has been appointed chair of the review and Dame Helen Alexander, chair of UBM, will take on the role of deputy chair.

The new review will continue on from Lord Davies’s Women on Boards Review, a voluntary business led initiative, which has seen female representation on boards in the FTSE 100 rise from 12.5% to beyond the target of 25%.

Terms of reference for the new review will be finalised but the overall aims of the work will be to:

  • continue to champion work to improve representation of women on FTSE 350 boards; and
  • consider options for building the talent pipeline, focussing on improving representation of women in the executive layer of FTSE 350 companies.

(BIS, New chair and deputy chair of women on boards review will champion female executives, 07.02.16)


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