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GC100 and Investor Group: 2015 Statement on Directors’ Remuneration Reporting Guidance
On December 10, 2015 the GC100 and Investor Group (the Group) published a statement regarding its Remuneration Reporting Guidance (the Guidance), which was originally published in September 2013, and was reviewed in December 2014 resulting in its 2014 Statement.
The Group has reviewed the Guidance and 2014 Statement in the light of the 2015 AGM season and other developments. After due consideration, the Group believes that the Guidance, as supplemented by the 2014 Statement, continues to serve its purpose effectively and no changes will be made.
The Group will undertake a full review of the Guidance and publish an update during 2016. As part of its review, the Group will take account of any relevant factors, including:
- the experience of the full three-year cycle and issues that may arise as remuneration policies fall due for renewal;
- the research paper published by the Department for Business, Innovation & Skills in March 2015 on how companies and shareholders have responded to the new requirements on the reporting and governance of directors’ remuneration;
- any changes to the Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) arising from any revisions to the Shareholder Rights Directive; and
- any relevant proposals which emerge from the Investment Association’s Executive Remuneration Working Group.
FCA: Quarterly Consultation No. 11
On December 4, 2015 the Financial Conduct Authority (FCA) published its eleventh quarterly consultation paper (CP15/42) and an accompanying press release.
The FCA is proposing to make changes to different parts of the Handbook as follows:
- Implementation of the Transparency Directive Amending Directive (TDAD): Following the publication of the final rules on the implementation of the TDAD in November 2015, the FCA is consulting on amendments to its Enforcement Guide (EG) to comply with the requirement that Member States provide competent authorities with the power to suspend voting rights for shareholders who do not comply with certain Transparency Directive requirements. In light of this, the FCA suggests adding rule EG 7.3A to reflect its ability to apply to the Court for an order to suspend a person’s voting rights and rules EG 7.20-7.22 to describe how it will decide whether to apply for such an order. The FCA will consider the full circumstances of each case, focussing particularly on section 89NA of the Financial Services and Markets Act 2000, which sets out the factors a Court may have regard to in deciding whether to make a voting rights suspension order. The FCA has requested comments on these proposals by February 4, 2016.
- Impact on the Listing Rules (LR) of proposed Prospectus Rules (PR) amendments pursuant to EU regulatory technical standards (RTS): The FCA is consulting on the impact that proposed changes to the PRs may have on the LRs. The changes were proposed in consultation paper CP15/28 to bring the PRs in line with the draft RTS on the Prospectus Directive (PD). The draft RTS themselves arise from the Omnibus II Directive and were published by the European Securities and Markets Authority in June 2015. The FCA has recognised that three LRs dealing with listing particulars cross-refer to rules in the PRs which will be amended. These are: LR 4.3.1R (which deals with the approval of listing particulars and cross-refers to PR 3.1 which addresses the approval of prospectuses), LR 4.3.5R (which deals with the filing and publication of listing particulars and cross-refers to PR 3.2 which addresses filing and publication of prospectuses), and LR 4.4.2R (which deals with supplementary listing particulars and also cross-refers to PR 3.2). As a result, the FCA is now consulting on the impact that the changes proposed to the PRs will have on these three LRs. The FCA does not propose making changes to the current LR requirements, but does intend to remove the reference to the PD Regulation in LR 4.3.5R and LR 4.4.2R, as it will be obsolete once the RTS are adopted. The FCA has requested comments on these proposals by January 4, 2016.
BIS: Amended draft Statutory Auditors and Third Country Auditors Regulations 2016
On December 10, 2015 the Department for Business, Innovation and Skills (BIS) published an update to the draft Statutory Auditors and Third Country Auditors Regulations 2016 (the draft 2016 Regulations), which will implement the Statutory Audit Amending Directive and EU Audit Regulation in the UK. The draft 2016 Regulations were initially published with BIS’ consultation on the technical legislative implementation of the Directive and Regulation in October 2015, followed by amendments to the draft 2016 Regulations in November 2015.
The draft 2016 Regulations have been updated to include proposed amendments to the Companies (Disclosure of Auditor Remuneration and Liability Limitation Agreements) Regulations 2008 (the 2008 Regulations) and Part 42 of the Companies Act 2006 (the CA 2006) on Statutory Auditors.
The proposed amendments to the CA 2006 are:
- amendments to section 1253B (Requests from EEA competent authorities) to include requests from ESMA, the European Banking Authority and the European Insurance and Occupational Pensions Authority; and
- amendments to Section 1253E (Working arrangements for transfers of papers).
The proposed amendments to the 2008 Regulations are:
- deleting the reference to small companies in Regulation 4(1);
- deleting Regulation 4(4); and
- in Regulation 6, providing that certain subsidiary companies are not required to disclose the information on remuneration receivable required by Regulation 5(1)(b), if certain conditions are met.
Though comments are not being requested, BIS states that it is happy to receive comments on these changes despite the consultation period having ended.
How will latest changes to Volcker Rule affect non-US banks?
Kathleen A. Scott discusses the final Volcker Rule, focusing on some of the issues raised by non-US banks in their comments.