Corporate weekly highlights—18 April 2019

This week's edition of Corporate highlights includes news of an update to our Public M&A trend report and the latest on Brexit, eg the issue by HMT of equivalence directions for EEA-approved prospectuses and EEA-adopted IFRS. It also covers an updated FCA technical note on periodic financial information and inside information, a consultation on the transposition of the Fifth Money Laundering Directive and two recent cases on contractual law issues.

In this issue:


European Union (Withdrawal) Act 2018 (Exit Day) (Amendment) (No 2) Regulations 2019

SI 2019/859: This enactment is made in exercise of legislative powers under the European Union (Withdrawal) Act 2018 (EU(W)A 2018) in preparation for Brexit. This enactment amends the definition of ‘exit day’ in EU(W)A 2018, s 20(1) from 12 April 2019 at 11 pm to 31 October 2019 at 11 pm, and consequently amends EU(W)A 2018, s 20(2). Various provisions of EU(W)A 2018, including the repeal of the European Communities Act 1972, and a wide range of primary and secondary legislation, take effect or come into force on exit day. It comes into force immediately after 3.15 pm on 11 April 2019.

For further information, see: LNB News 12/04/2019 11.

Technical update to the Withdrawal Agreement following Article 50 extension

The Department for Exiting the European Union has published correspondence with the European Commission confirming agreement to a technical change to the Withdrawal Agreement. The amendment alters the recitals and Article 185 to reflect the agreed extension to the Article 50 withdrawal period.

For further information, see LNB News 12/04/2019 42.

HM Treasury makes equivalence directions for EEA-approved prospectuses and EEA-adopted IFRS

HM Treasury (HMT) has made the Prospectus Directive and Transparency Directive Equivalence Directions 2019 (the Directions) in exercise of the powers conferred by Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019, SI 2019/541, reg 2(1) and Sch 1, para 9.

The Directions recognise the equivalence for the purposes of the Prospectus Rules of prospectuses drawn up under the law of each EEA state. The Directions also recognise that EEA-adopted International Financial Reporting Standards are equivalent to UK accounting standards for the purposes of the Transparency Directive and the Prospectus Directive.

For further information, see: LNB News 12/04/2019 65.

Public company takeovers

UK Public M&A Trend Report update—1 January–31 March 2019

Lexis®PSL Corporate and Market Tracker has conducted research to examine the current trends in UK public M&A for the period 1 January 2019 to 31 March 2019.

For further information, see: UK Public M&A Trend Report update—1 January–31 March 2019.

Corporate crime for corporate lawyers

HMT consults on transposition of MLD5

HMT has issued a consultation document on the steps that the UK government proposes to take to meet the UK’s obligation to transpose the Fifth Money Laundering Directive (MLD5) into national law and on the potential costs and benefits of the changes considered. The closing date for comments is 10 June 2019.

For further information, see: LNB News 15/04/2019 77.

Financial services regulation for corporate lawyers

FCA publishes updated technical note on periodic financial information and inside information

The Financial Conduct Authority (FCA) has published an updated technical note on periodic financial information and inside information (FCA/TN/506.2). The updated technical note considers the requirement under the Regulation (EU) 596/2014, Market Abuse Regulation for an issuer to inform the public as soon as possible of any inside information directly concerning that issuer, in the context of periodic financial information.

For further information, see: LNB News 16/04/2019 14.

Additional Corporate updates this week

Director and company secretary induced company to breach contract (Antuzis v DJ Houghton Catching Services Ltd)

In Antuzis v DJ Houghton Catching Services Ltd [2019] EWHC 843 (QB), the claimants were granted summary judgment against the first defendant company on their claim for breach of their employment contracts, arising from alleged unpaid wages, lack of holiday pay and unlawful deductions and fees. The court further ruled, on a preliminary issue, that the second and third defendants (who were, respectively, the director and secretary of the company) were jointly and severally liable to the claimants for inducing the first defendant company's breaches of contract. This was on the basis that they had not been acting bona fide in relation to the company and, on the evidence, they had both 'actually realised' that what they had been doing had involved causing the company to breach its contractual obligations towards the claimants.

For further information, see Antuzis v DJ Houghton Catching Services Ltd [2019] All ER (D) 78 (Apr).

Heads of terms formed a binding agreement, which was wrongfully terminated (Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd

Jeffrey Chapman QC, barrister at Fountain Court Chambers, gives an overview of Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd [2019] EWHC 507 (Ch). Relations between two companies that had partnered in the retail electricity market ceased, raising questions as to whether heads of terms formed a binding agreement, issues of contractual breach and termination and difficulties in the interpretation of the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (including whether electricity is to be classed as ‘goods’).

For further information, see News Analysis: Is electricity considered ‘goods’? (Green Deal Marketing Southern Ltd v Economy Energy Trading Ltd and others).

Additional news—daily and weekly news alerts

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Dates for your diary

30 April 2019Deadline for comments on DP 19/1: Building a regulatory framework for effective stewardship.
On 30 January 2019, the FCA and the Financial Reporting Council (FRC) issued DP 19/1 concerning the importance of effective stewardship. The objective of DP 19/1 is to advance the debate about what effective stewardship should look like, what the minimum expectations should be for financial services firms that invest for clients and beneficiaries, what higher standards the UK should aspire to and how these might best be achieved. It also considers the potential public and private benefits of improved stewardship.
For further information, see: LNB News 30/01/2019 105.
30 April 2019Deadline for comments on the FRC’s consultation on business reporting of intangible assets.
The FRC has published a consultation paper, which invites comments on how business reporting of intangible assets could be improved. The FRC argues that intangible assets are increasingly important in a knowledge-based economy and notes concerns that financial statements often fail to recognise important intangibles, such as intellectual capital.
For further information, see: LNB News 06/02/2019 37.


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. In relation to substantial property transactions, may the director (in their capacity as a member) vote on the resolution to approve the transaction in which they are involved?

  2. In what circumstances might a director be held personally liable for breach (of the general duties, in contract, or in tort)?

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—12 April2019.

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