An interesting and reflective article by Laurence Kaye of Shoosmiths on some of the legal issues prominent in the digital revolution.
13 May 2013
Bloomberg’s culture
As background to the “revelations” that Bloomberg journalists can (or could) see certain information about how individual customers use their Bloomberg terminals – NYT report here, Bloomberg statement here – an excellent piece from Quartz about Bloomberg’s culture.
Excerpt: read more »
12 May 2013
Directors’ pay: Enterprise and Regulatory Reform Act 2013 receives Royal Assent
The Enterprise and Regulatory Reform Act 2013 received Royal Assent on 25 April 2013.
Part 6 of the Act contains the provisions which will give shareholders in quoted companies a binding vote over the pay of their directors, by amending Part 15 of the Companies Act 2006. It is expected that those amending provisions will come into effect on 1 October 2013, with the provisions applying to quoted companies with financial years beginning on or after that date.
12 May 2013
Employee owned companies: draft model documents from UK government
BIS has published on 24 April 2013 a draft set of model constitional documents for an employee-owned company, as recommended by the Nuttall Review of Employee Ownership.
The documents can be read here.
12 May 2013
Corporate governance: QCA publishes revised Corporate Governance Code for smaller companies
The Quoted Companies Alliance published on 1 May 2013 a revised edition of its Corporate Governance Code for Small and Mid-Size Quoted Companies. The revised Code can be obtained from the QCA for a fee.
The covering QCA press release summarised the changes to the Code:
“Last published in 2010, the QCA Code has been revised and updated to take into account a number of corporate governance developments. Some key changes include:
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Emphasising the benefits of good governance to a public company, including how it can build trust between the company, its shareholders and potential shareholders;
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Focusing on the prime importance of companies delivering good quality explanations of its approach, actions and behaviour;
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Emphasising the central role of the chairman in delivering good governance;
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Further embedding the principle of constructive engagement between companies and shareholders in light of the UK Stewardship Code;
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Including greater detail on the characteristics of an effective board; and
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Reordering the Quoted Companies Alliance’s 12 principles of corporate governance to place greater emphasis on the delivery of growth in long term shareholder value.”
12 May 2013
Insolvency: a guide for directors
The Insolvency Service published in April 2013 a guide for directors “of any company involved in compulsory liquidation (winding up by the court) in England and Wales”. The guide also “talks about the disqualification of company directors and criminal offences in relation to a company [and] also summarises the other insolvency procedures that can apply to companies and explains some common insolvency terms”.
The guide (URN: 13/769) can be downloaded here.
12 May 2013
Cyber security: UK government guide for small businesses
A UK government guide, “Small businesses: what you need to know about cyber security“, was published on 23 April 2013.
The associated BIS press release is here.
12 May 2013
Women on boards: second annual review following 2011 publication of the Davies Review
The second annual review – following the 2011 Davies Review of Women on Boards - tracking progress in increasing the number of women on FTSE 350 company boards was published on 10 April 2013 and can be read here.
The associated BIS press release is here. Excerpt from press release: read more »
12 May 2013
Litigating confidentiality agreements: Dorchester Project Management v BNP Paribas
A good short note from Manches on the recent Court of Appeal judgment in Dorchester Project Management Ltd v BNP Paribas Real Estate Advisory Property Management UK Ltd, where an NDA was litigated.
From Manches’ note:
“When entering into a confidentiality agreement (or NDA) with another business or organisation there may be times when, in order to meet your objectives, you want to allow the recipient to go on to disclose confidential information to third parties. In such cases it is critically important to have proper protection in place.
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Businesses concerned about protecting opportunities where third parties may need to become involved should give proper consideration to whether ‘standard’ confidentiality agreements contain adequate provisions. If the intention is that a recipient of information needs to procure a back-to-back agreement on terms equivalent to those contained in the original confidentiality agreement, the original agreement should clearly say so.”
12 May 2013
Takeover Code: changes relating to pension schemes effective from 20 May 2013
On 22 April 2013 the Code Committee of the Takeover Panel published Response Statement 2012/2 on pension scheme issues, confirming the changes that will be made to the Code with effect from 20 May 2013.
A good note by Freshfields summarising those changes is here.
12 May 2013
Dairy Crest, Kodak use assets to address pension deficits
Dairy Crest has used £60 million of maturing cheese.
Kodak has sold two business to its UK scheme, enabling it to exit Chapter 11 in the US.
See also: Uniq: listed company sold by its own pension scheme
12 May 2013
Reporting: European Commission proposed directive on disclosure of non-financial and diversity information
On 16 April 2013 the European Commission published a proposed directive on the disclosure of non-financial and diversity information by large companies and groups.
The Commission’s page on the proposed directive is here; press release here; FAQs here; and draft directive text here.
From the FAQs:
“This proposed Directive would amend the Accounting Directives (Fourth and Seventh Accounting Directives on Annual and Consolidated Accounts, 78/660/EEC and 83/349/EEC, respectively). The objective is to increase EU companies’ transparency and performance on environmental and social matters, and, therefore, to contribute effectively to long-term economic growth and employment.
Companies concerned will be required to disclose in their annual reports relevant and material information on policies, results and risks concerning environmental aspects, social and employee-related matters, respect for human rights, anti-corruption and bribery issues, and diversity on the boards of directors.”
12 May 2013
Reporting: IIRC launches consultation draft of the International Integrated Reporting Framework
12 May 2013
“SEC says social media OK for company announcements if investors are alerted”
Prompted by the Netflix CEO’s post on Facebook about monthly online viewing rates. The SEC statement is here. Excerpt:
“Washington, D.C., April 2, 2013 — The Securities and Exchange Commission today issued a report that makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD) so long as investors have been alerted about which social media will be used to disseminate such information.”
12 May 2013
Use of dealing commission to pay for corporate access: IMA guidance
The Investment Management Association’s February 2013 guidance on the use of dealing commission to pay for corporate access can be downloaded here.
12 May 2013
Fiduciary duties: the Law Commission’s review of the fiduciary duties of investment intermediaries
Following the Kay Review’s suggestion that the operation of fiduciary duties in the investment management industry should be reviewed, in March 2013 the Law Commission announced that its has started work on this project. The Commission expects to open a consultation in October 2013, with recommendations to Government being made by June 2014.
The Law Commission’s page on its review, containing its terms of reference, is here.
12 May 2013
TUC share voting guidelines
The TUC’s “Trade Union and Engagement Guidelines” of March 2013 are here.
12 May 2013
Where…is the dividing line between an unenforceable agreement to agree and a contract which binds the parties, despite leaving some issues for future agreement?
A good note from Macfarlanes discussing this question in the light of the Court of Appeal’s decision in MRI Trading AG v Erdenet Mining Corp LLC [2013] EWCA Civ 156.
From the Macfarlanes note:
“The Court of Appeal held that the critical question was whether the parties intended that the contract would be binding in the event that agreement on the outstanding points was not achieved. There was a distinction between situations:
- where the parties must be taken to have intended that the matter should be left to their future agreement on the basis that either was to remain free to agree or disagree about that matter as his own perceived interest dictates – in which case there would be no bargain to enforce; and
- where the true intention of the parties was that the matter to be agreed in the future was capable of being determined, in the absence of future agreement, by some objective criteria of fairness or reasonableness.
The contract in this case fell into the second category and was, therefore, enforceable.”
12 May 2013
BVCA page on the AIFMD
Here. Includes “a high level summary of what you need to know about the AIFMD”.
12 May 2013
Paul Johnson on websites and magazines for entrepreneurs
From Paul Johnson’s FT column: “There are a host of websites and magazines for entrepreneurs, but no one who works for themselves can afford to spend hours a day surfing. So I have selected a handful of my favourite sites to save you time.”
The list is here.
11 May 2013
Model articles of association: changed by the Mental Health (Discrimination) Act 2013
The Mental Health (Discrimination) Act 2013 is here; the relevant provision is section 3. A short note from Manches explaining the changes, which are effective from 28 April 2013, to the model articles of association (for private and public companies and for companies limited by guarantee) is here.
Extract from Manches note: read more »
4 April 2013
More on paywalls
“How paywalls are evolving” – Felix Salmon. Refers to MediaPass.
“…it’s a mistake — at least from a purely financial perspective — to treat all readers equally. Some readers have a much greater propensity to pay than others; ideally, you want to extract a lot of money from those readers, while also allowing the vast majority of your visitors — the ones who will never pay you anything — to still consume your content and view the associated ads…
…And certainly it seems to be a good idea to offer a range of subscription lengths, priced so that there’s a strong incentive to go for the longer-dated annual subscription, even if again that means a substantially lower rate on a per-month basis.
I’s not all that hard to tell who’s likely to be willing to subscribe, and who isn’t. Print subscribers, for instance, are much more likely to be willing to pay for a digital subscription than a reader who doesn’t already pay for the print version. And people who visit frequently, and who read a lot of local news, or sports news, are also more likely to subscribe.
In general, the trick is to get as many subscribers as you can — because once a person subscribes, they generally turn out to be surprisingly loyal and price-inelastic. You can keep on charging their credit card, even at steadily-rising rates, and they’re not going to unsubscribe. And then, for the 90% of readers who don’t subscribe, it’s a good idea to find content for them, too. The paywall shouldn’t just be a “pay here or get nothing” option: the “no thanks” button should take you to valuable free content…
…the act of putting up a paywall is the act of “essentially harvesting revenue from a loyal long-term audience” — people who have been reading the publication for years, and have turned it into a habit they don’t want to give up. That’s fine, as a short-term means of maximizing revenues. But it’s dangerous in terms of getting new loyal readers. Which is one reason why online media startups almost never have paywalls: they want as many people as possible to discover them.”
3 April 2013
Herbert Smith charged £1.8 million in fees for work on the Salz Review of Barclays’ Business Practices
See page 172 of the Salz Review document.
The 244 page Review only makes one mention of Barclays’s General Counsel (and that is in the context of his membership of a board committee).
The Review’s section on Board governance and the Appendix on “What is Culture and How Can It Go Wrong?” are vaguely interesting. Otherwise, the Review adds little to the recommendations of the Walker Review of Corporate Governance in UK banks.
2 April 2013
How the FT built its paid subscription base
27 March 2013
The Pru fined £30 million for not telling the regulator about its planned 2010 acquisition of AIA
It cost the Pru hundreds of millions in abort costs and fees in 2010, and today it has cost them another £30 million in an FSA fine.
Prudential, according to the Financial Services Authority, didn’t tell the regulator what it was intending – even when the regulator pretty much asked and even though its own advisers emphasised the importance of keeping the FSA informed. The CEO is also censured. FSA press release here and Final Notices here (the Pru) and here (the CEO).
From the FSA press release (our emphasis added): read more »
25 March 2013
Duty of good faith in commercial contracts: summary from SNR Denton
Here, following Yam Seng Pte Limited v International Trade Corporation Limited.
25 March 2013
Financial services regulatory reform: FSA consultation paper on warning notices
The Financial Services Authority published on 18 March 2013 a consultation paper (CP 13/8) on the Financial Conduct Authority’s approach to the issue of warning notices. Press release here and consultation paper here.
“The main point of our proposals is to be transparent about our enforcement action early on. The financial services industry and consumers will be able to understand the types of behaviour that we consider unacceptable at an earlier stage, which will help promote credible deterrence.”
The consultation closes on 18 June 2013.
25 March 2013
Registration of charges: good note on the changes from Clifford Chance
Here. The changes take effect on 6 April 2013.
See also: Registration of charges: useful summary of changes from Companies House
25 March 2013
Executive remuneration: second draft of proposed remuneration regulations, and FAQs document
On 11 March 2013 the Department of Business, Innovation and Skills published a second draft of the regulations which will implement the Government’s changes to the corporate governance framework for executive remuneration. As we discussed in this post of June 2012, the big change is to give shareholders in quoted companies a binding vote over executive remuneration.
The second draft of The Large and Medium-sized Companies and Groups (Accounts and Reports )(Amendment) Regulations 2013 is here. The BIS consultation page is here.
On 22 March 2013 BIS published a useful set of FAQs on these new regulations. Section C of those FAQs attempts to explain the implementation of the timing of the new regime.
25 March 2013
The Financial Services Act 2012 (Commencement No. 2) Order 2013: provisions of the FSA coming into force on 1 April 2013
Sets out those provisions of the Financial Services Act 2012 which come into force on 1 April 2013.
25 March 2013
Executive remuneration: Financial Reporting Lab report on ‘Reporting of pay and performance’
The Financial Reporting Council’s “Financial Reporting Lab” published on 5 March 2013 the results of its second project on reporting remuneration, “this time exploring the views of investors and companies on two new aspects of the draft reporting regulations on remuneration:
- scenario charts demonstrating how directors’ pay varies with performance, and
- a chart comparing CEO pay based on the single figure for remuneration, with company performance, measured using Total Shareholder Return”.
The Lab’s press release is here and the project report is here.
See also: A single figure for directors’ pay? FRC Financial Reporting Lab report#
