Corporate weekly highlights—18 January 2018

This week’s edition of Corporate highlights includes a News Analysis piece in our IPO topic area, the publication of ESMA’s practical guide about notifications of major holdings in accordance with the Transparency Directive and the publication of the Contract (Third Party Rights) (Scotland) Act 2017 (Commencement) Regulations 2018 which come into force in February 2018 and bring into force certain provisions of the Contract (Third Party Rights) (Scotland) Act 2017.

Equity Capital Markets

IPO-less IPOs

Corporate analysis: Spotify, the Swedish music, podcast, and video streaming services company, confidentially filed initial public offering documents in New York during December 2017 as it pursues a direct listing rather than a more conventional listing with an associated capital raising. Meanwhile in London, Metro Bank plc also used the direct listing method without raising money at the time of flotation. This News Analysis piece examines whether these recent examples may pave the way for more companies to use this method of coming to the market.

Containing commentary from Julian Stanier and Gareth Jones, both Partners at Pinsent Masons LLP, the News Analysis piece covers the advantages and disadvantages of direct listings rather than a traditional flotation method and discusses if the recent examples are likely to lead to an increasing number of companies using direct listings as an alternative means of launching themselves ion the public markets thus pointing to an emerging trend.

For further information, see IPO-less IPOs.

​National rules on notifications of major holdings under the Transparency Directive

The European Securities and Markets Authority (ESMA) has published a practical guide which summarises the main rules and practices applicable across the European Economic Area (EEA) in relation to notifications of major holdings under national law in accordance with the Transparency Directive. The guide is intended as an aide to market participants and may be particularly helpful to shareholders with notification obligations under national law in accordance with the Transparency Directive.

The guide includes information on notification thresholds, the triggering event, the deadline for learning of the triggering event, the deadline for making a notification as well as permitted channels and the format for the filing of such, and the deadline for publishing a notification.

See LNB News 16/01/2018 131.

Additional corporate updates this week

Contract (Third Party Rights) (Scotland) Act 2017 (Commencement) Regulations 2018

SSI 2018/8: Regulations which bring into force provisions of the Contract (Third Party Rights) (Scotland) Act 2017 (Act) come into force on 26 February 2018. The Act enables the creation and enforcement of contractual rights in favour of third parties, replacing the common-law rule known as jus quaesitum tertio.

The Contract (Third Party Rights) (Scotland) Act 2017 received Royal Assent on 30 October 2017, and sections 12, 13 and 14 came into force on 31 October 2017. The Contract (Third Party Rights) (Scotland) Act 2017 (Commencement) Regulations 2018, SSI 2018/8 (Regulations) bring the remaining provisions of the Act into force on 26th February 2018.

The Act sets out provisions (among other things) in relation to: the contracting parties’ freedom to alter a third party’s entitlement, the protection of a third party’s entitlement from retroactive change from when notice has been given and after an undertaking has been relied on, the remedies available to a third party, defences available to a contracting party from a third party claim relating to breach of an undertaking and resolving disputes by arbitration where there is an arbitration agreement in place.

For further information, see LNB News 15/01/2018 56.

Additional news—daily and weekly news alerts

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Dates for your diary

Date Subjects covered
29 January 2018 Pursuant to AIM Notice 49, issued by the London Stock Exchange (LSE), the LSE has published a feedback statement to its discussion paper published on 11 July 2017 (AIM Notice 46) reviewing the AIM Rules, as well as a consultation on proposed changes. Comments on the proposed changes to the AIM Rules for Companies (AIM Rules) and the AIM Rules for Nominated Advisers (Nomad Rules) should be sent by 29 January 2018.
The purpose of the discussion paper was to invite feedback on various areas of the AIM Rules and the Nomad Rules. The LSE is consulting on proposals that formalise an early notification process for nominated advisors, provide guidance to nominated advisors on appropriateness considerations and require AIM companies to comply or explain against a recognised corporate governance code.
For further information, see LNB News 11/12/2017 114.
January 2018 Corporate governance: FRC will publish its annual report on developments in corporate governance and stewardship.
1 February 2018 Institutional Shareholder Services (ISS) has published its 2018 benchmark policy updates. The updated policies will generally be applied for shareholder meetings on or after 1 February 2018. The principal change is the introduction of a new policy to deal with the evolving practice of virtual shareholder meetings, but other changes include around the policies on director overboarding, audit and remuneration committee composition, threshold levels for long-term incentive plans (LTIPs) and share issuances without pre-emption rights.
For further information, see LNB News 17/11/2017 94.
1 February 2018 Responses are sought on proposed minor changes to the Listing Rules (LRs) and Disclosure Guidance and Transparency Rules (DTRs) as set out in FCA CP17/39 Quarterly Consultation Paper.
The changes in the LRs clarify the meaning of Premium Listing Principle 6 in the LRs. The changes in the DTRs clarify where the diversity report may be located under corporate governance reporting requirements.
For further information, see LNB News 01/12/2017 129.

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