FinTech in Turkey: Overview
Ekin İnal and Ecem Naz Boyacıoğlu provide an overview of FinTech in Turkey.
In 2017, Canadian legislators, regulators, and stock exchanges have implemented—or taken steps toward implementing—new rules and guidance in a number of areas relating to public company governance. As the year winds down, our Canadian Special Situations team reviews five key legal and regulatory developments in 2017, and what they mean for Canadian public companies.
If CBCA and OBCA amendments pass, more issuers will be required to adopt majority voting, annual, individual election of directors, and diversity disclosure—if they have not already.
The past year has seen significant steps to amend both the Federal and Ontario corporate statues. If implemented, the main practical effect of the proposed amendments to the Canada Business Corporations Act (CBCA) and Ontario Business Corporations Act (OBCA) would be to require all Federal and Ontario public companies to adhere to majority voting, annual, individual elections for directors, and diversity disclosure, regardless of the exchange on which they are listed.
In doing so, the amendments would bring the CBCA and OBCA largely into line with existing requirements for TSX-listed companies. In addition, the amendments would fill certain perceived gaps in exchange requirements. The amendments would make these practices increasingly the norm, even where issuers may not be technically obliged to adopt them.
The Federal amendments, which were first introduced in September of 2016, are likely to pass in something close to their present form. They are now being considered in the Senate. However, the Ontario amendments, which were first introduced in March of 2017, are much less likely to pass, given that they were put forward in a private member’s bill (though by a government MPP).
Both sets of amendments include:
In addition to these changes, the CBCA amendments allow CBCA public companies to take full advantage of notice-and-access by removing technical impediments.
The OBCA amendments include lowering the ownership threshold for shareholder proposals to nominate directors to shareholders collectively owning at least 3% of a company’s shares, rather than the current 5% under the CBCA and OBCA. However, whereas the current OBCA provision allows a proposal to include “nominations for the election of directors”, the amendments allow a proposal to nominate only a “single individual”. The amendments also lower the threshold for requisitioning a meeting to shareholders collectively owning at least 3%, rather than the current 5% under the CBCA and OBCA. They also include allowing shareholders to make a proposal that a company adopt an executive compensation policy for officers and directors. If such a policy is adopted, the company would be required to set compensation in accordance with the policy.
Parties in related-party transactions will face more regulatory scrutiny of their process, especially with respect to fairness opinions.
On July 27, 2017, the Canadian Securities Administrators (the “CSA”) published Multilateral CSA Staff Notice 61-302. The guidance advises that regulators in Ontario, Quebec, Alberta, Manitoba, and New Brunswick (Staff) will be reviewing related-party transactions covered by Multilateral Instrument 61-101 (MI 61-101) on a “real-time basis”. It also provides clarity around the areas on which Staff will focus.
Overall, the guidance underscores the importance of ensuring a fair and rigorous process when undertaking a related-party transaction.
A few areas of the guidance are particularly noteworthy:
Securities regulators are showing increased impatience at boilerplate or vague diversity disclosure.
CSA Multilateral Staff Notice 58-309—Staff Review of Women on Boards and in Executive Officer Positions—Compliance with NI 58-101 Disclosure of Corporate Governance Practices provides the CSA’s third annual survey of compliance with National Instrument 58-101 and specifically, with its comply-or-explain diversity disclosure regime.
The review, released October 5 2017, notes that for the sample of 660 issuers reviewed this year, 14% of board seats were occupied by women, as against 11% 2 years ago. Similarly, the number of issuers surveyed with at least one woman on their board rose to 61%, from 49%. The review also notes that 26% of board vacancies in the sample were filled by women (a figure the CSA first reported this year).
Nonetheless, the CSA has noted that disclosure deficiencies continue in a number of areas, and reminds issuers that:
Securities regulators and exchanges are making clear that issuers must maintain consistent, high-quality disclosure regardless of the venue in which disclosure occurs. The TSX will also expect key governance documents to be placed on an issuer’s website.
While social media and company websites may lack the formality of SEDAR, the same expectations around the quality and consistency of disclosure still apply. Overall, there is an emerging expectation that issuers present one face to the public—not different information in different venues—and that basic governance documents be accessible.
On March 9, 2017, the CSA published Staff Notice 51-348—Staff’s Review of Social Media Used by Reporting Issuers. The CSA noted that 72% of the sample of 111 issuers reviewed were actively using at least one social media website.
In reviewing social media disclosure, the CSA identified a number of issues that will attract the CSA’s scrutiny and potential corrective action, including:
The CSA also highlighted the importance of having a social media governance policy covering matters such as, for instance, who can post, what can be posted, and who must approve the posts. The Ontario Securities Commission has also noted similar deficiencies in social media disclosure, and recommended a social media disclosure policy, in its Corporate Finance Branch Annual Report for 2016-2017.
In addition, amendments to the TSX Company Manual in October 2017 will require every TSX-listed issuer to put current versions of the following on its website effective April 1, 2018:
its articles of incorporation, or any other constating or establishing documents and its by-laws; and
if adopted, copies of its majority voting policy; advance notice policy; position descriptions for the chairman of the board and lead director; board mandate; and board committee charters.
The TSX has tightened its guidance around majority voting policies and advance notice provisions, specifically criticizing a number of practices that some issuers have adopted which undermine the intentions behind such policies.
Since 2014, TSX issuers have been required to have majority voting policies. As discussed above, the intention of these policies is to enhance shareholder democracy by preventing directors being elected in uncontested elections without receiving a majority of votes cast.
Many issuers have also adopted advance notice provisions, which allow shareholders to nominate directors only if they give sufficient advance notice to the company. As with majority voting policies, advance notice provisions tend to enhance shareholder democracy, because they prevent shareholder ambushes which catch companies and their shareholders off-guard.
Nonetheless, over the past few years certain problematic practices have emerged. In TSX Staff Notice 2017-0001, issued March 9, 2017,the TSX identified a number of such practices. In its review of 200 majority voting policies, problematic features included:
In its review of 25 advance notice policies, the TSX also identified a number of problematic features, including:
Should you have any questions about what these policies mean for your company, please do not hesitate to contact a member of our Canadian Special Situations team:
Orestes Pasparakis, Partner, Co-Chair, Canadian Special Situations team: +1 416.216.4815 / email@example.com
Walied Soliman, Chair of Norton Rose Fulbright Canada, Co-Chair, Canadian Special Situations team: +1 416.216.4820 / firstname.lastname@example.org
Ekin İnal and Ecem Naz Boyacıoğlu provide an overview of FinTech in Turkey.
During his State of the Nation Address, the President gave reassuring impetus to solving the current energy crisis and perennial load shedding that has been decimating the economy.