The two Bills in today’s Queen’s Speech that are of most interest from a company and financial law perspective are the:
The Enterprise and Regulatory Reform Bill
This will:
- Enshrine the “green” purpose of the Green Investment Bank, providing powers for it to operate including funding and ensuring its operational independence from Government.
- Create a single Competition and Markets Authority by combining the Competition Commission and the competition functions of the Office of Fair Trading.
- “Strengthen the framework” for directors’ pay, specifically by repealing section 439(5) of the Companies Act 2006 making it possible for directors’ remuneration to be contingent on the outcome of the shareholder vote on the remuneration report. The expectation is that the Government’s March 2012 suggestion that a binding vote on quoted company directors’ pay would require a supermajority to pass will not go ahead, with the vote instead being an ordinary resolution requiring a simple majority to pass.
- Simplify the regulatory system and give “confidence to business that they will not be held back by outdated and unnecessary legislation”…no details of how that will be achieved.
Banking Reform Bill
This will:
- Give the Treasury powers to make provision for ring-fencing by requiring that essential banking services are only provided in a ring-fenced bank, and defining services that a ring-fenced bank may not provide.
- Require the Prudential Regulatory Authority to ensure that a ring-fenced bank in a group is, as far as possible, independent of other entities in the group.
- Provide that depositors are treated as preferred creditors, paid before unsecured creditors on insolvency, and so reduce the exposure of the Financial Services Compensation Scheme and the taxpayer in insolvency.
Government Briefing Notes on the Bills here.
