On June 20, 2012, British Deputy Prime Minister Nick Clegg announced at the United Nations Rio+20 Summit that the UK will become the first country to require emissions data disclosure in companies’ annual directors’ reports. Pursuant to regulations to be made under the UK’s Climate Change Act 2008, which must come into force by April 2013, all UK “quoted companies” will be required to report their greenhouse gas emissions. (Quoted companies generally are UK companies whose equity share capital is included in the Official List, officially listed in an European Economic Area (EEA), or admitted to dealing on either the NYSE or NASDAQ.) In 2016, the British government will determine whether to extend this requirement to all large UK companies, including private companies.
UK Regulation
UK Corporate Governance: The 2011 Report Card
Introduction: The Financial Reporting Council (“FRC”), the independent regulator responsible for promoting corporate governance in the UK, published its annual report at the end of last year assessing the impact and effectiveness of the new UK Corporate Governance Code (“CGC”) and the new Stewardship Code (“SC”) (the “Codes”), setting out proposals for reform and improvement in best practice.
Duties of Directors of UK Subsidiary Companies – An Introduction
While the duties of directors of unlisted private companies often coincide with the strategy and requirements of the subsidiary’s parent company, this is not always the case, and the circumstances may require a director to act independently of the parent. Directors may risk personal liability as regulators are taking tougher stances especially toward bribery, corruption and anti-competitive behavior, particularly cartel abuses. Directors and prospective directors will therefore want to know the extent to which they can protect themselves against these risks.
Protectionism and Paternalism at the UK Takeover Panel — Part II
The Panel Holds Its Ground — An Analysis of Some of the Key Proposals
Introduction — The Panel Stands Firm
In late November 2010, we published an article on the policy statement of the UK Panel on Takeovers and Mergers (Panel) which set out the ground work for changes to the rules governing the conduct of public takeovers in the UK as embodied in the UK Code on Takeovers and Mergers (Code)[1]. Last week, the Panel published a public consultation paper (PCP 2011/1) which sets out the detailed proposed amendments to the Code[2] as trailed in our earlier article. In summary, notwithstanding an outcry from seasoned market participants (in particular the advisory community) on some of the proposed changes which are perceived as having a detrimental impact on the openness of the UK M&A market, disappointingly, the Panel has not shifted from its position as set out late last year on the fundamentals/principles of its new approach on key areas such as the ‘put up shut up’ (PUSU) regime and offeree protection arrangements. We examine below certain critical features of some of these proposed changes.
UK and European Remuneration Reform: Year in Review
In the past three years, international regulatory focus on remuneration has gripped the globe. The heart of the debate which arose in the context of remuneration structures in investment banking and their contribution to global financial crisis has extended past this into remuneration across a broad range of industries. This past year has seen a number of developments which have intensified in both the UK and Europe as we draw close to the year end. We look back at the year and consider where regulation and industry guidelines have emerged in the context of pay structures and recent developments in the area of transparency and taxation. We also provide a comprehensive review of the hugely anticipated new remuneration code[1] the final version of which was published by the Financial Services Authority last Friday.
Protectionism and Paternalism at the UK Panel on Takeovers and Mergers
On 1 June 2010 the UK Panel on Takeovers and Mergers (Panel), issued a ‘Green’ Consultation Paper[1] on the Review of Certain Aspects of the Regulation of Takeover Bids in the UK (Green Paper). This Green Paper was issued following an announcement earlier in the year by the Panel that it would review certain rules of the UK Code on Takeovers and Mergers (Code) in the lights of widespread commentary and public discussion following the acquisition of Cadbury PLC by Kraft Foods Inc. in Q1 2010. On 21 October 2010[2], the Code Committee of the Panel issued a statement setting out its findings following this initial consultation period which involved reviewing nearly 100 responses from a broad range of commerce, industry and practice including academics, trade union representatives and the professional advisory community (Response Statement).
UK Government Publishes Consultation Paper on Proposed New Regulatory Landscape
In a previous alert published in July, The UK’s Blueprint for Financial Regulation, we looked at the UK Government’s proposals for an overhaul of the UK financial regulatory infrastructure. These proposals were issued upon the initiation of the new Government, aimed at addressing a systemic failure in the UK domestic regime to recognise and respond in a timely and adequate manner to the global financial crisis.
UK Bribery Act “Adequate Procedure” Draft Guidance Published
In anticipation of the April 2011 implementation of the new UK Bribery Act 2010 (the “Act”),[1] on September 14, 2010, the UK Ministry of Justice launched an eight-week consultation regarding the Government’s proposed guidance to commercial organisations on the prevention of bribery. The consultation features the publication of draft guidance on the “adequate procedures” defence under the Act.
Triplets?. . . ‘No, I’d Rather Have Twins’ — The UK’s Blueprint for Financial Regulation
In a dramatic move, initially trailed this time last year, the Conservatives (now in coalition with the Liberal Democrats) have confirmed that they will in their term of service, abolish Britain’s tripartite financial services regime, to replace it with a form of "twin peaks" style of regulation.
The Four ‘Ds’: Deterrence, Discipline, Disgorgement … and Dawn Raids — Latest on the UK Financial Services Authority’s Enforcement Regime
On 1 March, the UK Financial Services Authority ("FSA") published its new framework for financial penalty-setting. Explaining the tri-partite objectives of the new policy of deterrence, discipline and disgorgement, Margaret Cole (Director of Enforcement and Financial Crime) said: