Corporate weekly highlights—10 May 2018

11 May 2018

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This week’s edition of Corporate highlights includes the proposed corporate governance reforms to ensure small CICs continue to report on director remuneration. Highlights also include a new practice note we have published to our Share capital topic area.

Corporate governance

Government to introduce changes to ensure small CICs continue to report on director remuneration

The government has announced proposed incidental changes in efforts to implement corporate governance reforms. Given the restrictions on disclosures required of small companies and the removal of obligations to report on directors’ remuneration, the government is looking to ensure small community interest companies (CICs) continue to report on director remuneration, which includes pay and other benefits.

The regulator of CICs holds an expectation that CICs will continue to provide remuneration information on their annual report (CIC34), so that the community interest test is satisfied. In the event that a CIC does not satisfy the community interest test, the regulator can take enforcement action.

For further information, see LNB News 03/05/2018 96.

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New and updated content

New practice note

We have published the following practice note in our Share capital topic area (Produced in partnership with Tessa Park of Kingston Smith LLP):

Changes to share capital—accounting treatment

Dates for your diary

Date	Subjects covered
25 May 2018	Data protection: the General Data Protection Regulation shall be directly applicable and fully enforceable in all Member States. On 15 December 2015, the EU institutions reached agreement on the General Data Protection Regulation (EU) 2016/679 (GDPR), which will replace the Data Protection Directive 95/46/EC upon which the UK's Data Protection Act 1998 is based. The GDPR was published in the Official Journal of the European Union on 4 May 2016. It came into force on 24 May 2016. The GDPR will be directly applicable in all Member States from 25 May 2018 and the government has confirmed that the UK will be implementing the GDPR as it will remain a member of the EU on this date. The General Data Protection Regulation (GDPR) The GDPR—preparing for implementation
25 May 2018	AIM: responses to consultation on proposed changes to the AIM Rules for Nominated Advisers requested by this date. Following on from issues raised in its AIM Rules Review Discussion Paper published in July 2017, the London Stock Exchange (LSE) issued AIM Notice 51 on 26 April 2018 under which it is proposing changes to the AIM Rules for Nominated Advisers. The proposed changes cover eligibility and continued eligibility of nominated adviser firms and clarity in relation to the LSE’s supervisory powers. AIM Notice 51 Mark-up of Nomad Rules
1 June 2018	The Financial Reporting Council (FRC) has updated its sanctions guidance for auditors, accountants and actuaries in order to implement the recommendations of an independent review of sanctions undertaken in 2017. The updated guidance will take effect on this date. A panel chaired by former Court of Appeal Judge Sir Christopher Clarke conducted the independent review of sanctions, publishing its report in October 2017. The panel made several recommendations, including: an increase in fines to £10m or more for seriously poor audit work by a ‘Big 4’ firm, exclusion from the accounting profession for a minimum of ten years for dishonesty, greater use of non-financial penalties and sanctions that reflect the level of cooperation by respondents. See LNB News 09/04/2018 6.