Corporate weekly highlights—14 March 2019

This week’s edition of Corporate highlights includes details of two new Brexit SIs on stamp duty and financial services, proposals by the London Stock Exchange to change its primary and secondary market rulebooks in the event of a no deal Brexit, the announcement of the replacement of the FRC with a new Audit Reporting and Governance Authority and a related consultation regarding this new regulator, recommendations from the Digital Competition Expert Panel on reforms to tackle challenges posed by digital markets and a government commitment in the Spring Statement 2019 to tackle late payments for small businesses.

In this issue:


Stamp Duty and Stamp Duty Reserve Tax (Amendment) (EU Exit) Regulations 2019

SI 2019/515: These regulations (which were made on 7 March 2019) are made in exercise of legislative powers under the Finance Act 1986 and Finance Act 2012 in preparation for Brexit. This enactment ensures that reliefs necessary for maintaining market liquidity from Stamp Duty and Stamp Duty Reserve Tax transactions continue to cover the UK and Gibraltar in the event that no deal is reached on the UK’s withdrawal from the EU. The Regulations will come into force on exit day.

For further information, see: LNB News 08/03/2019 141.

Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019

SI 2019/541: These regulations were made on 11 March 2019 in exercise of legislative powers under the European Union (Withdrawal) Act 2018 to address deficiencies in relation to the EU equivalence framework for financial services and retained EU law arising from Brexit. The regulations make provision for elements of the UK equivalence framework in a no deal scenario and provide ministers with a temporary power (for up to 12 months after exit day) to make equivalence directions and exemption directions for EEA member states. It came into force partly on 12 March 2019 and will apply fully on exit day.

For further information, see: LNB News 18/01/2019 48.

LSE proposes changes to its primary and secondary market rulebooks in the events of a no deal Brexit

The London Stock Exchange (LSE) has announced, as part of its ongoing contingency planning, proposed changes to its Primary and Secondary Market Rulebooks (Market Notices N04/19 and N05/19) in the event of a no deal Brexit including amendments to the Admission and Disclosure Standards, the AIM Rules for Companies and the AIM Rules for Nominated Advisers. The amendments are consequential to reflect the UK’s legal and regulatory framework outside the EU and will allow the LSE to continue to operate its markets effectively and meet its regulatory obligations.

For further information, see: LNB News 08/03/2019 109.


FRC to be replaced by the Audit Reporting and Governance Authority

The Business Secretary Greg Clark has announced a new enhanced regulator to transform the audit and accounting sector in response to the comprehensive Independent Review led by Sir John Kingman. As per the review’s recommendations, the Financial Reporting Council (FRC) will be replaced with a new regulator called the Audit, Reporting and Governance Authority. The government further notes that the establishment of new leadership at the top of the FRC, which will transition into the new body will also begin, with the recruitment for the Chair and Deputy Chair opening shortly.

For further information, see: LNB News 11/03/2019 120.

BEIS launches consultation on recommendations made by the Independent Review of the FRC

The Department for Business, Energy & Industrial Strategy (BEIS) launched a consultation on 11 March 2019 which is seeking views on the recommendations made by the Independent Review of the Financial Reporting Council to create a new regulator responsible for audit, corporate reporting and corporate governance. The consultation will close at 11:45 pm on 11 June 2019.

For further information, see: LNB News 12/03/2019 12.

Additional Corporate updates this week

Digital Competition Expert Panel recommends reforms to tackle challenges posed by digital markets

On 13 March 2019, the Digital Competition Expert Panel published its report entitled ‘Unlocking digital competition’. The Panel’s report makes recommendations to the UK’s competition framework to address the challenges posed by digital markets, in the UK and internationally. The Panel recommended updating the UK rules governing mergers and antitrust enforcement, as well as establishing a digital markets unit. 

For further information, see: LNB News 13/03/2019 100.

Spring Statement 2019: Announcement on late payments to ensure ‘issue gains the board-level attention it deserves’

In the Spring Statement 2019, the government announced it will tackle late payments for small businesses, by requiring ‘company Audit Committees to review payment practices, and report on them in their Annual Accounts’. Edwin Morgan, interim director general of the Institute of Directors, said it will ‘ensure the issue gains the board-level attention it deserves’. A full response to 2018’s call for evidence will also be published shortly.

For further information, see: LNB News 13/03/2019 152.

Additional news—daily and weekly news alerts

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New and updated content

New Practice Note—Brexit

We have published the following Practice Note concerning the impact of Brexit: Brexit—European entities.

Dates for your diary

21 March 2019Deadline for comments on the European Commission consultation on remuneration report.
On 4 March 2019, the European Commission published a consultation document seeking input from Member States and stakeholders on the draft guidelines on the remuneration report under the Directive 2017/828, Shareholders Rights Directive (SRD II).
LNB News 04/03/2019 4
27 March 2019Deadline for comments on CP 19/7: Consultation on proposals to improve shareholder engagement.
On 30 January 2019, the FCA issued CP19/7 which proposed regulatory measures to implement parts of the revised Directive 2017/828, SRD II. The SRD II aims to promote effective stewardship and long-term investment decision-making primarily through better transparency of engagement policies and investment strategies across the institutional investment community. The proposed measures implement the provisions of SRD II for FCA-regulated life insurers and asset managers, and for issuers of shares in respect of related party transactions.
LNB News 30/01/2019 105
28 March 2019Deadline for comments on CP 19/6: Changes to align the FCA Handbook with the EU Prospectus Regulation.
On 29 January 2019, the FCA published CP 19/6. The majority of the changes proposed involve reproducing text from the Prospectus Regulation directly into the new sourcebook. The FCA assumes that an implementation period will be agreed on the UK leaving the EU and that EU law will continue to apply in the UK until the end of the implementation period.
LNB News 29/01/2019 71
29 March 2019At 11.00pm on 29 March 2019 UK time (which will be 00.00am CET on 30 March 2019), the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) shall cease to apply to the UK, along with all other EU primary and secondary law and the UK's withdrawal from the EU (Brexit) will be achieved.
On 29 March 2017, the UK Prime Minister gave formal notification of the UK's intention to withdraw from the EU, commencing the withdrawal process under Article 50 TEU. Article 50 TEU prescribes a two-year period for the UK and the EU to negotiate the terms of Brexit, which may be extended by agreement.
Brexit: UK Article 50 TEU notification starts the clock—what happens now?
29 March 2019Deadline for comments on the FRC’s proposed revision to the UK Stewardship Code.
In January 2019, the FRC announced intention to overhaul the UK Stewardship Code (the Code). On 30 January 2019, the FRC issued a consultation paper setting out its proposed new Code along with a summary of the changes from the existing Code.
LNB News 30/01/2019 105


To track key legislative and regulatory developments, see our Trackers:

  1. Brexit legislation tracker

  2. Brexit timeline

  3. Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) timeline

  4. Market Abuse Regulation timeline

  5. Prospectus Regulation tracker

  6. Transparency Directive tracker

  7. Listing Rules tracker

  8. Disclosure Guidance and Transparency Rules Sourcebook tracker

  9. Prospectus Rules tracker

Latest Q&As

New Q&As added this week:

  1. Are the officers of a co-operative or community benefit society (registered society) subject to the same duties as the directors of a limited company?

Useful information

To view analysis of the latest deals in the market and the underlying transaction documents, use our Market Tracker deal analysis tool.

To read about the latest corporate announcements, see our Market Tracker weekly round-up—8 March2018.

To read about the latest issues and developments which we are following in Market Tracker, see our latest blog post: Market Tracker weekly bulletin—14 March 2019.

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