12 May 2013
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.”
Posted in Corporate governance, Equity capital markets, Lobby groups |
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12 May 2013
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 »
Posted in Corporate governance, Directors, Equity capital markets, UK government |
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12 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.
Posted in Companies Act 2006 and company law, Equity capital markets, M+A, Regulators, Takeovers |
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12 May 2013
Launched in early April 2013 with the aim of tightening standards on ICAP’s ISDX Growth Market. Consultation page here; consultation paper here.
From the introduction to the consultation paper:
read more »
Posted in Consultations, Equity capital markets, Financial services and market conduct |
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12 May 2013
LAPFF guidelines on executive pay here, published March 2013. A particularly horrible use of “going forward” on page three.
Summary by Shepherd & Wedderburn here.
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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12 May 2013
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.”
Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Europe, Reporting and accounts |
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12 May 2013
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.”
Posted in Equity capital markets, Financial services and market conduct, Regulators, Reporting and accounts, United States |
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12 May 2013
The Institute of Chartered Accountants in England and Wales published a new technical guidance note (Tech 01/13CFF) in March 2013 (with an effective implementation date of 1 September 2013) giving “Guidance on financial position and prospects procedures” on London IPOs.
The note is here. From the ICAEW’s covering note on its website:
“ICAEW has published guidance that addresses a regulatory requirement of companies seeking a listing (or admission to trading) on a UK market.
Directors of a company that is seeking a Premium Listing of its shares on the Main Market of the London Stock Exchange have a regulatory obligation to have established procedures that provide a reasonable basis for them to make proper judgements on an ongoing basis about the company’s financial position and prospects. There are also regulatory requirements regarding financial position and prospects (FPP) procedures for companies seeking an admission to trading on AIM or the ISDX Growth Market. A reporting accountant will usually be requested to perform services in this regard.
Technical Release TECH 01/13CFF was published following a consultation launched in June 2010 and an exposure draft published in March 2012. TECH 01/13CFF is aimed at:
- directors of companies preparing for an IPO, explaining how they can demonstrate that they have established FPP procedures to address relevant objectives and;
- reporting accountants undertaking an assurance engagement to address relevant objectives and providing an assurance report in relation to FPP procedures established by directors.
TECH 01/13CFF replaces the guidance in FRAG 10/95 The London Stock Exchange Listing Rules paragraphs 2.11 and 2.8. It should be implemented by 1 September 2013.”
Posted in Equity capital markets, Lobby groups |
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12 May 2013
The TUC’s “Trade Union and Engagement Guidelines” of March 2013 are here.
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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12 May 2013
Here is the LSE’s webpage on the new High Growth Segment, the “new segment of the Main Market, designed to assist mid-sized European and UK companies that require access to capital and a public platform to continue their growth”, which launched in March 2013.
The page includes the HGS Rulebook and an FAQs section.
Here is a useful note by Osborne Clarke on the HGS.
Posted in Equity capital markets |
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27 March 2013
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 »
Posted in Directors, Equity capital markets, Financial services and market conduct, Regulators |
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25 March 2013
On 14 March 2013 the Institute of Chartered Secretaries and Administrators published new guidance on stewardship, “Enhancing Stewardship Dialogue“. Press release here.
Excerpt from press release:
read more »
Posted in Corporate governance, Equity capital markets, Lobby groups |
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25 March 2013
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.
Posted in Companies Act 2006 and company law, Consultations, Corporate governance, Directors, Equity capital markets, Reporting and accounts, UK government |
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18 March 2013
The Financial Services Authority has announced that it is fining Lamprell plc 2,428,300 for systems and controls failings. The press release is here and the Final Notice is here.
From the press release:
“The Financial Services Authority (FSA) has fined Lamprell plc (Lamprell) £2,428,300 for significant failings in its systems and controls resulting in Listing Rules and related breaches. Lamprell could not adequately monitor its financial performance against its budget and against market expectations and therefore failed in its obligations as a listed company to keep the market fully informed of its deteriorating financial position during early 2012.
The systems and controls failings resulted in Lamprell breaching the Listing Principles, the Disclosure and Transparency Rules and also the Model Code on directors’ dealings in securities.
From early in 2012, Lamprell’s financial performance against its budget had been deteriorating due to operational issues. However, Lamprell did not update the market on its deteriorating financial performance until it released a trading update on 16 May 2012. In response to this trading update, Lamprell’s share price fell by 57% demonstrating the importance of that financial information.
There were serious systems and controls failings at Lamprell
read more »
Posted in Equity capital markets, Regulators |
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13 March 2013
HM Treasury has today published its promised consultation on making AIM company shares eligible for ISAs. The effect of the proposed changes is that High Growth Segment company shares, when and if there are any, will also be eligible for ISAs.
The Treasury press release is here and the consultation document is here.
The key proposed change (see paragraph 3.3 of the consultation document) is that:
read more »
Posted in Consultations, Equity capital markets, Tax, United States |
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11 March 2013
A great bear, woods, defecate story from the New York Times about the eToys IPO of 1999; and how Goldman Sachs allegedly made more in commission kickbacks from clients grateful for an allocation of the IPO shares that it made from eToys in fees. Excerpt:
“Goldman carefully calculated the first-day gains reaped by its investment clients. After compiling the numbers in something it called a trade-up report, the Goldman sales force would call on clients, show them how much they had made from Goldman’s I.P.O.’s and demand that they reward Goldman with increased business. It was not unusual for Goldman sales representatives to ask that 30 to 50 percent of the first-day profits be returned to Goldman via commissions, according to depositions given in the case.”
The eToys – Goldmans litigation continues.
Posted in Equity capital markets, United States |
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7 March 2013
This useful site, shorttracker.co.uk, tracks all short positions notified to the FSA under the Short Selling Regulation.
Posted in Equity capital markets, Europe, Financial services and market conduct |
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4 March 2013
Posted in Equity capital markets, Regulators |
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4 March 2013
Competition Commission press release, 22 February 2013:
“Competition in the audit market is restricted by factors which inhibit companies from switching auditors and by the tendency for auditors to focus on satisfying management rather than shareholder needs. This is the Competition Commission’s (CC) provisional conclusion in its market investigation into the supply of statutory audit services to large companies in the UK.
In a summary of its provisional findings published today, the CC states that because companies find it difficult to compare alternatives with their existing auditor, prefer continuity and face significant costs in switching, they are reluctant to change auditor and so lack bargaining power. Audit firms outside the ‘Big 4’, which dominate the market, find it difficult to show that they have sufficient experience and reputation to win the audit engagements of FTSE 350 companies.
Additionally, although auditors are appointed to protect the interests of shareholders, who are therefore the primary customers, too often auditors’ focus is on meeting the needs of senior management who are key decision takers on whether to retain their services. This means that competition focuses on factors that are not aligned with shareholder demand.
read more »
Posted in Equity capital markets, Regulators, Reporting and accounts |
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4 March 2013
The National Association of Pension Funds, today (press release and letter):
“Pension funds have warned the FTSE 350 that shareholders will not tolerate unjustified executive rewards in the upcoming voting season, and have set out the pay guidelines they expect to see applied in 2013.
In a letter sent to the chairmen of FTSE 350 businesses, the National Association of Pension Funds (NAPF) warned that companies that have failed to create a strong link between executive rewards and performance should expect shareholders to repeat their concerns of spring 2012.
The NAPF also set out some guidelines it wants to see reflected in the pay policies set through 2013. These include capping executive base pay increases at inflation and keeping them in line with the rest of the workforce. Where this is not the case, companies should offer a sound explanation.
The NAPF also criticised the use of peer group benchmarking, where pay is set by comparing it to that of other executives from different companies. The NAPF believes this practice has contributed to the escalation of boardroom pay. It said boards should focus more on their own strategies and less on comparing themselves against their peers.
read more »
Posted in Corporate governance, Directors, Equity capital markets, Lobby groups |
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4 March 2013
Summary of measures from the New York Times; applies to Swiss-listed companies.
- Binding vote on executive pay.
- Bans golden hellos and goodbyes.
- Annual re-election of directors.
- Potential criminal sanctions for non-compliance.
See also: Directors’ pay in quoted companies: draft regulations and Government consultation document published
Posted in Directors, Equity capital markets |
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26 February 2013
The latest edition of the BDO / Quoted Companies Alliance “Sentiment Index” has a useful discussion of corporate bonds as a financing option for smaller listed companies. A very surprising statistic is that “49% of advisors said they were not aware of the ORB”.
See also: London Stock Exchange’s Order Book for Retail Bonds
Posted in Equity capital markets, Lobby groups |
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26 February 2013
Sefton Resources, Inc. statement of 25 February 2013:
“Legal proceedings have been issued against Tom Winnifrith and Daniel Levi (Broker Man Daniel) for libel in the Queen’s Bench Division of the High Court of Justice.
· Complaints have been made against Tom Winnifrith and Daniel Levi to the Financial Services Authority (FSA) regarding apparent breaches of the Financial Services and Markets Act 2000.
· US counsel has been engaged to review comparable actions with US courts and regulatory authorities.
Jim Ellerton, Chairman of the Board said:
“Sefton is accelerating the development of its oil and gas operations both in California and Kansas to create shareholder value. Sefton is not against free speech and people expressing their opinions in the press or on the internet; however, when boundaries of common decency are breached the Company will vigorously pursue anyone and the vehicles they utilize, that seek to illegally damage Sefton.”"
Posted in Equity capital markets, Lawyers |
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26 February 2013
The founder of Wachtell, Lipton, Rosen & Katz on why Einhorn is all wrong.
Posted in Corporate governance, Equity capital markets, United States |
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19 February 2013
Centre Forum, a think-tank with links to the Coalition Government and to business, published last week a report titled “The path to IPO: funding SME jobs and growth”, which makes a series of (familiar) recommendations on how SMEs may be encouraged to access capital via the equity markets.
The report is here (summary of recommendations on page 7) and the accompanying press release is here.
Posted in Equity capital markets, Lobby groups, UK government |
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19 February 2013
This is the first penalty imposed on a company by the FSA for breaches of the Listing Rules and Listing Principles relating to compliance with the Model Code. From a Financial Services Authority press release on 14 February 2013:
“The Financial Services Authority (FSA) has fined Nestor Healthcare Group Limited (Nestor) £175,000 for failing to take adequate steps to ensure that its board members and senior executives complied with the share dealing provisions of the FSA’s Model Code.
read more »
Posted in Equity capital markets, Financial services and market conduct, Regulators |
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19 February 2013
Following its March 2o12 consultation on the proxy advisor industry, the European Securities and Markets Authority has today proposed the creation of a “Code of Conduct” for proxy advisors.
ESMA’s recommendation is here and its final report in the proxy advisor industry is here.
From the recommendation:
read more »
Posted in Corporate governance, Equity capital markets, Europe, Regulators |
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13 February 2013
This morning London Stock Exchange announced its new “High Growth Segment” of the Main Market. The HGS is aimed at fast-growing companies aspiring to be included in the Premium Segment of the UKLA’s Official List. In the words of the Exchange:
“Market feedback from investors, sell side participants and the venture capital community confirms there are a significant number of UK and European businesses with ambitious development plans that are currently under-represented on the equity markets. This segment is part of the solution – it will provide greater choice for companies seeking capital and investors seeking growth opportunities.”
The HGS will be a segment of the EU’s EU regulated market and so the EU financial services directives (including the Prospectus Directive) will apply. The HGS will not be part of the Official List, with the Exchange explicitly designing the HGS as a “transitional route” to the Official List.
Key issuer eligibility criteria are:
read more »
Posted in Consultations, Equity capital markets, Financial services and market conduct, Private equity, UK government |
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11 February 2013
Following HP’s allegations of “serious accounting improprieties, misrepresentation and disclosure failures” at its recently-acquired Autonomy business (which, together with Autonomy’s founder’s rebuttal, we reported on here), the Financial Reporting Council today launched an investigation:
“into the published financial reporting of Autonomy for the period between 1 January 2009 and 30 June 2011″.
The FRC’s press release is here. Autonony was traded on the London Stock Exchange throughout the period under investigation.
Posted in Companies Act 2006 and company law, Equity capital markets, Regulators, Reporting and accounts, Takeovers |
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8 February 2013
On 4 February 2013 the Financial Reporting Council issued a consultation paper ( accompanying press release here) proposing (in the words of the overview to the CP) to require the auditor’s report to:
read more »
Posted in Companies Act 2006 and company law, Consultations, Equity capital markets, Regulators, Reporting and accounts |
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8 February 2013
David Jones is also a former chairman of Next plc:
From an SFO press release today:
“Today, two men appeared before Leeds Magistrates’ Court in response to a summons in connection with forgery and misleading statements made to the market by JJB Sports Plc in 2009.
Sir David Charles Jones (70) of Ilkley, West Yorkshire was the Executive Chairman of JJB Sports Plc between January 2009 and January 2010. He is charged with:
• Two offences of making a misleading statement, contrary to s397(1)(b) of the Financial Services and Markets Act 2000;
• One offence of using a false instrument, contrary to s3 of the Forgery and Counterfeiting Act 1981.
Stuart Mark Jones (38) of Bingley, West Yorkshire is the son of Sir David Jones and was employed as Head of Marketing at JJB Sports plc in February 2009. He is charged with:
• One offence of aiding and abetting Sir David Jones’s use of a false instrument, contrary to s3 of the Forgery and Counterfeiting Act 1981.
Both defendants were released on unconditional bail. Proceedings are to be transferred to a Crown Court for 19 April 2013.”
Posted in Companies Act 2006 and company law, Directors, Equity capital markets, Financial services and market conduct, UK government |
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8 February 2013
From Wey Education plc’s announcement on 29 January 2013:
“On 17 January 2013, the Company sent Dr Atkins a copy of a report which set out, inter alia, allegations (i) that Dr Atkins had breached her fiduciary duties and her conduct was not commensurate with her duties and responsibilities as Chief Executive Officer of the Company; (ii) Dr Atkins had accepted a position as a Director of a Wey client company, without disclosing such to the Wey Board, or seeking permission for such; (iii) that Dr Atkins had incorporated various companies, having names similar to that of the Company and its principal subsidiary, Zail Enterprises Limited, where Dr Atkins was named as the sole shareholder and Director, again without disclosing such to the Wey Board; and (iv) that Dr Atkins had supplied incomplete or inaccurate information to the Company’s ISDX Advisor as to her Directorships and shareholdings.”
See also: Directors: Loyalty, avoiding conflicts and not making secret profits
Posted in Companies Act 2006 and company law, Directors, Equity capital markets |
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8 February 2013
A group of pension fund investors – Hermes Equity Ownership Services, the National Association of Pension Funds, the BT Pension Scheme, RPMI Railpen and USS Investment Management – yesterday published a discussion document setting out guidance on executive directors remuneration. From the accompanying NAPF press release:
“The report sets out four principles to encourage companies to change their reward structures as they begin to think ahead to the introduction of the binding vote on remuneration policy next year.
The principles are:
1. Management should make a material long-term investment in shares of the businesses they manage. For example, shares granted to executive directors should ideally be owned for at least ten years, whether or not the executive is still in post. This would encourage succession planning and reduce the need for ‘golden hellos’ for new directors.
read more »
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Lobby groups |
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1 February 2013
On 30 January 2013 the Financial Reporting Council issued a consultation document on implementing the recommendations of the Sharman Inquiry on Going Concern and Liquidity Risks. The consultation document is here and the accompanying press release is here. From the press release:
read more »
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Regulators, Reporting and accounts |
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31 January 2013
BIS press release of 30 January 2013 here. Excerpt:
“I do recognise that for some businesses, like those in the mining and extractives industry in particular, there are unique challenges in diversifying their boards with the right experience. The frequent travel and project based work in remote areas of the world have all been cited as barriers to appointing more women in the past. However, successful modern companies learn to adapt and survive and doing nothing is not an option anymore.”
See also: Women on boards: EU publishes draft directive on “improving the gender balance” among companies listed on regulated markets; sets 2020 target for 40% of NEDs to be women
Posted in Corporate governance, Directors, Equity capital markets, UK government |
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28 January 2013
The GC100 has responded to the final report of the Kay Review of UK Equity Markets and Long-Term Decision Making.
For the GC100′s response to various suggestions made in the Kay Review, see the following paragraphs of the GC100 document:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Lawyers, Lobby groups |
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21 January 2013
In 18 January 2013 ICSA published a guidance note on ”Liability of non-executive directors: care, skill and diligence“. From the accompanying press release:
“The latest ICSA guidance note suggests ways in which NEDs can approach their work which would also allow them to demonstrate to a regulator, or in a court of law, that they had executed all necessary steps to reduce their liability exposure.
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Lobby groups, Risk management |
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21 January 2013
The snappily-named Listing Rules Joint Working Party of the Company Law Committees of the Law Society of England and Wales and the City of London Law Society has published its response to the FSA’s October 2012 consultation on “Enhancing the effectiveness of the Listing Regime” (we discussed the consultation in this post).
See also: A new route to the UK IPO market: Government plans to relax rules to attract high-growth companies to list on London
Posted in Consultations, Corporate governance, Directors, Equity capital markets, Lawyers |
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11 January 2013
Posted in Equity capital markets, United States |
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