Corporate weekly highlights—21 September 2017

This week’s edition of Corporate highlights includes The Takeover Panel’s proposed amendments to the Takeover Code, a consideration of the impact of the government’s corporate governance reforms and the government’s recent publication of the draft Business Contract Terms (Assignment of Receivables) Regulations 2017.

Public company takeovers

Takeover Panel proposes requiring bidders to make fuller disclosure of takeover plans

The Takeover Panel (Panel) has issued a public consultation paper, PCP 2017/2, setting out proposed amendments to the Takeover Code (Code) with regard to statements of intention by bidders and related matters. The key proposals include: prohibiting an offeror from publishing an offer document for 14 days from the announcement of its firm intention to make an offer without the consent of the offeree board; requiring offerors and offerees to publish reports on post-offer undertakings and intention statements given during the course of an offer; expanding the content requirements for offeror statements of intention with regard to the offeree’s business, employees and pension schemes and bringing forward the requirement for an offeror to make statements of intention at the time of its firm intention announcement. Comments on the consultation should reach the Panel by 31 October 2017.

For details see news, LNB News 19/09/2017 128.

Corporate Governance

Government reforms to corporate governance regime aim to enhance public trust

In this analysis, Matthew Findley, partner and Jo Chattle, senior knowledge lawyer at Norton Rose Fulbright consider the impact of the government’s proposals detailing a number of reforms to the corporate governance regime, which include a requirement for quoted companies to publish details of the ratio between CEO pay and the average worker’s pay.

The analysis considers among other things: the government’s main proposals relating to executive pay; whether these proposals will be effective in combatting concerns over excessive executive pay; whether the proposed public register of companies that have encountered shareholder opposition of 20% or more in relation to pay awards will make any difference in practice; and proposals to extend the minimum corporate governance requirements to larger privately held companies.

For details see news analysis, Government reforms to corporate governance regime aim to enhance public trust.

Private M&A (asset purchase)

Business Contract Terms (Assignment of Receivables) Regulations 2017

The UK government has recently published this draft statutory instrument (SI) pursuant to the Small Business, Enterprise and Employment Act 2015. The SI relates to the assignment of receivables (ie invoices and other rights to be paid money under a contract). This is a mechanism by which businesses are able to raise finance based on money owed to them.

The proposed changes to be implemented by the SI provide that a term in a contract prohibiting the assignment of a receivable, or preventing the assignee from determining the validity or value of a receivable, or hindering their ability to enforce a receivable, have no effect.

For details see news, LNB News 18/09/2017 97.

Company incorporation

New charitable incorporated organisation conversion process could begin from January 2018

The first piece of secondary legislation required for implementation of a new process for charitable companies and community interest companies (CICs) to convert into charitable incorporated organisations (CIOs) has been laid before Parliament.

Currently there is no process for a CIC to convert into a CIO and limited provision for charitable companies to do so (involving setting up a new CIO, transferring assets and winding up the old charity). The Charitable Incorporated Organisations (Consequential Amendments) Order 2017 is the first of three instruments concerning CIO conversions. If passed, it will come into force on 1 January 2018..

The instrument allows a CIC the right to appeal a decision by the Charity Commission to refuse an application for its conversion into a CIO and the CIO's registration as a charity. Once it receives Parliamentary approval, the Charitable Incorporated Organisations (Conversion) Regulations 2017 and the Index of Company Names (Listed Bodies) Order 2017 will be laid before Parliament.

CIOs were introduced in 2013 as a new legal structure to meet the needs of small charities in England and Wales. The legal framework for CIOs is set out in the Charities Act 2011.

For details see news, LNB News 14/09/2017 89.

Data protection

Government publishes Data Protection Bill

The government has published the Data Protection Bill which it believes will make data protection laws fit for the digital age. The bill will replace the Data Protection Act 1998 (DPA 1998) and sets new standards for protecting general data, giving people control over their own data and providing new rights to move and delete personal data. It will preserve existing exemptions which the government says have worked well in DPA 1998, to ensure businesses and organisations can continue to support research, financial and legal services, and journalism. It also includes specific measures to allow action against terrorist financing, money laundering and child abuse.

The main elements of the bill include: implementation of the General Data Protection Regulation (GDPR) standards across all general data processing; ensuring sensitive health, social care and education data can continue to be processed so confidentiality in health and safeguarding situations can be maintained; and providing appropriate restrictions to rights to access and delete data, to allow certain data processing activities currently undertaken to continue where there is a strong public policy justification.

The bill also includes exemptions for data processing in respect of: the processing of personal data by journalists for freedom of expression and to expose wrongdoing; certain data processing obligations where the persons are scientific and historical research organisations such as museums and universities if these obligations would impair their core functions; national bodies responsible for the fight against doping in sport where processing data to catch drug cheats; and the financial services sector in relation to the pricing of risk or data processing done on suspicion of terrorist financing or money laundering.

For details see news, LNB News 14/09/2017 105.

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New and updated content

New Precedents

We have published the following Precedents:

  1. Written resolution of the members of a private company—completion—investment agreement (newco)
  2. Power of attorney (signing)—investment agreement (corporate investor)

Dates for your diary

Date Subjects covered
22 September 2017 Deadline for responses to consultation on proposed amendments to the Takeover Code. For details see LNB News 12/07/2017 111.
28 September 2017 Deadline for comments on three ESMA consultations relating to the Prospectus Regulation: Consultation paper on the format and content of the prospectus (ESMA 31–62–532); Consultation paper on the EU Growth prospectus (ESMA 31–62–649); and Consultation paper on scrutiny and approval (ESMA 31–62–650). For details see LNB News 06/07/2017 144.
September 2017 MiFID II: Transparency data and double volume cap data must be reported to ESMA from September 2017. For details see news, LNB News 13/01/2017 145.
2 October 2017 Deadline for proposed amendments to the FCA Handbook on this date, further to the FCA’s prior publication of its quarterly consultation paper on changes to the FCA Handbook. For details see news, LNB News 01/09/2017 65.
11 October 2017 Deadline for feedback and comments on the FCA’s three new technical notes that outline its expectations of sponsors and their obligations under LR 8.3.4R, LR 8.4.2R(3) and LR 8.4.12R(2). For details see: FCA Primary Market Bulletin, FCA’s Technical Note: Sponsors’ duty regarding directors of listed companies, FCA’s Technical Note: Sponsors’ obligations on established procedures, FCA’s Technical Note: Sponsors’ obligations on no adverse impact.

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