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This week’s edition of Corporate highlights includes the latest updates on Brexit, reports by ECON on Commission proposals to upgrade the European Supervisory Agencies framework, and an annual report from ESMA on the application of accepted market practices in accordance with the Market Abuse Regulation. Also included is a Commercial news analysis reflecting on the Law Society’s reply to Law Commission’s consultation on electronic execution of documents.
Financial services regulation for corporate lawyers
Commercial law for corporate lawyers
Additional Corporate updates this week
Additional news—daily and weekly news alerts
New and updated content
Dates for your diary
SI 2019/Draft: This draft enactment is laid in exercise of legislative powers under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) in preparation for Brexit. It proposes to amend primary and subordinate legislation and revoke subordinate legislation and retained direct EU legislation in the field of company law in order to address deficiencies in retained EU law which arise from the withdrawal of the UK from the EU. It also ensures that the UK’s company law framework will be able to function effectively, providing clarity and a smooth transition for business on and after exit day. It comes into force on exit day. Note that the draft enactment is identical to the draft Companies, Limited Liability Partnerships and Partnerships (Amendment etc) (EU Exit) Regulations 2018, which were published in October with the exception of some additional footnotes which reference the fact that certain Companies Act 2006definitions are to be amended by other regulations published in connection with the UK’s exit from the EU.
For further information, see: LNB News 15/01/2019 76.
The Department for Business, Energy & Industry Strategy (BEIS) has published an update regarding steps being taken to prepare businesses in the event of a no-deal Brexit. BEIS has also recruited 700 new staff to work on EU exit policy using additional funding allocated by HM Treasury for Brexit preparedness.
For further information, see: LNB News 11/01/2019 62.
As the Lords and the Commons prepared for their delayed votes on the Withdrawal Agreement and political declaration on the future UK/EU relationship, the Prime Minister made a final attempt to secure support for the deal, publishing correspondence with the Presidents of the European Commission and Council, setting out their respective assurances, clarifications and interpretations, with particular focus on the Northern Ireland backstop. Following previous publication of his legal advice on the issue, the Attorney General also gave an opinion, concluding that the Withdrawal Agreement represents the ‘only politically practicable and available means’ of securing the UK’s exit from the EU.
For further information, see: LNB News 14/01/2019 107.
SI 2019/Draft: This draft enactment (which was published on 17 December 2018—see Financial Services News Analysis: HM Treasury publishes draft Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019) is laid before each House of Parliament in exercise of legislative powers under EU(W)A 2018 in preparation for Brexit. This draft enactment proposes to amend UK subordinate legislation in relation to the EEA's ‘financial services passport’ which allows firms in EEA states to offer services in any other EEA state on the basis of their home state authorisation and to non-UK central counterparties and trade repositories which provide certain services in the UK under the European Market Infrastructure Regulation in order to address deficiencies in retained EU law. Without this instrument, where these firms do not enter the UK's temporary regimes, they may not be able to meet existing contractual obligations or provide services.
For further information, see: LNB News 16/01/2019 75.
The European Parliament’s Economic and Monetary Affairs Committee (ECON) has published Reports on Commission proposals to upgrade the European Supervisory Agencies (ESAs) framework to ensure they can assume an enhanced responsibility for financial market supervision (Report A8-0013/2019), and to amend MiFID II and Solvency II to strengthen the role of the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (Report A8-0012/2019). The European Parliament has also published Report A8-0011/2019 on the Commission’s proposal to amend Regulation (EU) 1092/2010 to strengthen the role of the European Systemic Risk Board.
For further information, see: LNB News 15/01/2019 98.
The ESMA has published its annual report on the application of accepted market practices (AMP) in accordance with the Market Abuse Regulation (MAR). AMPs are a defence against allegations of market manipulation. In particular, dealings in financial markets which are carried out for legitimate reasons and in conformity with an established AMP will not constitute market manipulation. ESMA's report provides an overview on the establishment and application of AMPs in the EU, with particular reference to the AMPs established on the basis of the Market Abuse Directive and which were still in force when MAR became applicable, and the AMPs which have been established under MAR.
For further information, see: LNB News 16/01/2019 106.
The House of Commons European Scrutiny Committee has published details of documents considered at its meeting on 9 January 2019. The Committee looks at the significance of EU proposals and decides whether to clear the document from scrutiny or withhold clearance and ask questions of the government. The Committee is now looking at documents in the light of the UK decision to withdraw from the EU. From a financial services perspective, the 9 January 2019 meeting considered the progress of the revised EU prudential framework for investment firms, EU regulation of crowdfunding platforms and the proposed Regulation on sustainable finance disclosures.
For further information, see: LNB News 16/01/2019 109.
Commercial analysis: Christina Gill, associate at Walker Morris, considers the Law Society’s response to the Law Commission’s consultation on electronic execution of documents.
The Law Society published evidence and opinions in response to the Law Commission’s consultation to consider how to simplify the execution of documents electronically (see: LNB News 27/11/2018 74). This commercial analysis considers the practical implications of the Law Society’s response, the extent to which the response agrees with the position taken by the Law Commission, the key take-aways from the Law Society’s response and the likely next steps.
For further information, see News Analysis: Reflections on the Law Society’s reply to Law Commission’s consultation on electronic execution of documents.
On 10 January 2019, the Competition and Markets Authority (CMA) published a notice (dated 20 December 2018) of a penalty imposed on Ausurus Group Ltd (Ausurus) and European Metal Recycling Ltd (EMR) (its wholly owned subsidiary) for failure to comply with an initial enforcement order (IEO) issued by the CMA on 11 September 2017. The IEO related to the completed acquisition by Ausurus, through EMR, of CuFe Investments Limited (CuFe)—including its wholly-owned subsidiary, Metal & Waste Recycling Limited (MWR). The CMA imposed a total fine of £300,000 on Ausurus and EMR for two separate infringements of the IEO.
For further information, see: LNB News 10/01/2019 79.
This document contains the highlights from the past week’s news. To receive all our news stories, whether on a daily or a weekly basis, amend your personal settings within your ‘News’ tab on the homepage by clicking on either ‘Email’ or ‘RSS’ (depending on how you prefer to receive them) on the right hand side of the blue banner.
We have published a new Practice Note in our Directors and company secretaries topic: ICSA and Henley Business School guidance on conflict and tension in the boardroom.
To track key legislative and regulatory developments, see our Trackers:
Brexit legislation tracker
Prospectus Regulation tracker
Transparency Directive tracker
Listing Rules tracker
Disclosure Guidance and Transparency Rules Sourcebook tracker
Prospectus Rules tracker
New Q&As added this week:
1. What form must company records be kept in?
2. Does a UK subsidiary of an overseas parent have to provide CEO pay ratio information in its annual report?
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—11 January 2019.
To read about the latest issues and developments which we are following in Market Tracker, see our latest blog post: Market Tracker weekly bulletin—17 January 2019
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