Corporate weekly highlights—13 July 2017

This week’s edition of Corporate highlights includes ESMA’s updated Market Abuse Regulation Q&A; the London Stock Exchange’s discussion paper on proposed on AIM rulebooks changes; the FCA’s Prospectus Rules (Miscellaneous Amendments) Instrument 2017; and the Takeover Panel’s Practice Statement No 31.

Equity Capital Markets

ESMA updates Market Abuse Regulation Q&As

The European Securities and Markets Authority (ESMA) has updated its Q&A document regarding the implementation of the Market Abuse Regulation.

Certain sections of the Market Abuse Regulation apply to a person discharging managerial responsibility (PDMR) in an issuer and those ‘persons closely associated’ with them. ESMA has added a new Q&A to its Q&A document providing guidance on parts of the definition of a ‘closely associated person’ under Article 3(1)(26)(d) of the Market Abuse Regulation.

The new Q&A clarifies that the reference to ‘the managerial responsibilities of which are discharged’ in Article 3(1)(26)(d) of the Market Abuse Regulation should be read to cover those cases where a PDMR within an issuer (or a closely associated natural person, trust or partnership) takes part in or influences the decisions of another legal person, trust or partnership to carry out transactions in the issuer's financial instruments.

For details see news, LNB News 06/07/2017 132.

London Stock Exchange invites views on AIM rulebooks changes

The London Stock Exchange has issued a discussion paper on proposed changes to the AIM rules for companies and AIM rules for nominated advisers (AIM rulebooks).

The proposals relate to admission criteria; early clarity for applicants; nominated advisers in the admission process; approach across the nominated adviser community in respect of appropriateness considerations; and corporate governance levels.

Responses should be sent by 8 September 2017.

For details see news, LNB News 11/07/2017 127.

FCA publishes Prospectus Rules (Miscellaneous Amendments) Instrument 2017

The Financial Conduct Authority (FCA) has published the Prospectus Rules (Miscellaneous Amendments) Instrument 2017, which amends the FCA Handbook and Prospectus Rules sourcebook so as to build in provisions of the Prospectus Regulation which shall apply from 20 July 2017.

Although the Prospectus Regulation shall apply from 21 July 2019, certain of its provisions shall apply from 20 July 2017, namely points (a), (b) and (c) and the second sub-paragraph of Article 1(5). The Instrument amends the Prospectus Rules sourcebook to build in these provisions.

For details see news, LNB News 07/07/2017 89.

ESMA consults on simplifying the prospectus rules

The European Securities and Markets Authority (ESMA) has published three consultation papers (CPs) on the Prospectus Regulation, which aim to make it easier and cheaper for companies, and in particular smaller companies, to access capital and improve prospectus accessibility for investors.

The three CPs contain draft technical advice on the format and content of the prospectus, on the EU growth prospectus and on scrutiny and approval.

The CP on the format and content of the prospectus relates to situations where prospectuses are required when securities are offered to the public or admitted to trading on a regulated market. ESMA proposes to largely maintain the existing regime but is also proposing a number of targeted alleviations in order to reduce the burden and costs on issuers. In addition, ESMA has developed draft requirements for the new Universal Registration Document and for secondary issuances, proposed reduced disclosure in order to take greater account of publicly available information.

In the CP on the EU Growth prospectus ESMA has developed draft technical advice dealing with the format and content of the Small and Medium Enterprises (SME) focused EU Growth prospectus. The proposal, consists of a schedule for registration document information and a separate schedule for information concerning the securities, each of which can be used for both equity and non-equity issuance.

In the CP on scrutiny and approval ESMA sets out criteria for scrutiny and procedures for approval and filing of the prospectus, proposing that: standard criteria for scrutiny of the completeness, comprehensibility and consistency of the prospectus are adopted and that, beyond these standard criteria, National Competent Authorities (NCAs) are afforded a certain level of flexibility as a means of ensuring investor protection.

Feedback is sought by 28 September 2017. ESMA has said it will deliver the technical advice to the European Commission by 31 March 2018.

For details see news, LNB News 06/07/2017 144.

Public company takeovers

Takeover Panel publishes Practice Statement No 31

Practice Statement No 31 has been published by the Takeover Panel Executive (the Executive). It covers strategic reviews, formal sale processes and other circumstances in which a company is seeking potential offerors.

Specifically, Practice Statement No 31 describes how the Executive ordinarily interprets and applies aspects of Rule 2 (secrecy before announcements; timing and contents of announcements), Rule 21.2 (inducement fees and other offer-related arrangements) and Rule 21.3 (equality of information to competing offerors) in circumstances in which a company wishes to: make an announcement that it is conducting a strategic review of its business, which in certain cases may include an offer for the company as a possible outcome; conduct a ‘formal sale process’ and benefit from the dispensations referred to in Note 2 on Rule 2.6 and Note 2 on Rule 21.2; or otherwise seek one or more potential offerors.

Practice Statements Nos 3 (controlled auctions) and 6 (strategic review announcements) have been withdrawn. Practice Statement 20 has been amended so that paragraph 5.13 refers to Practice Statement No 31 rather than Practice Statement No 6.

For details see news, LNB News 07/07/2017 101.

Dates for your diary

Date Subjects covered
20 July 2017 The Prospectus Regulation enters into force. It will apply 24 months from this date. For further information see LNB News 30/06/2017 28.
24 July 2017 Eligible Scottish partnerships (Scottish limited partnerships and general Scottish qualifying partnerships) formed on or after this date will be required to register their people with significant control (PSC) information with Companies House on formation. Subsequent changes to PSC information will need to be filed at Companies House within 14 days beginning with the later of 24th July 2017, and the day on which all the required particulars of the registrable person are first confirmed.
1 August 2017 Deadline for responses to the International Auditing and Assurance Standards Board's consultation on a proposal to revise its standard for the audit of accounting estimates and related disclosures (ED-540). For further information see LNB News 13/01/2017 145.
Further dates To look further ahead, see: Corporate horizon scanning—2017 and beyond.

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