Just come across this astute January 2013 analysis from The Media Briefing of Thomson Reuters’ acquisition of Practical Law Company: read more »
21 March 2013
Paywalls, and disruptive digital publishing
Two articles from The Media Briefing:
- How the NYT has grown paywall revenue by “thinking like a retailer“.
- The Atlantic’s launch of Quartz is a successful disruption of its own model: read more »
19 March 2013
AIFMD: FSA publishes second consultation paper
The Financial Services Authority today published its second consultation on rules and guidance to transpose the Alternative Investment Fund Managers Directive into national law (the first FSA consultation is here).
The FSA’s press release is here and the consultation document is here. From the press release: read more »
15 March 2013
AIFMD: HM Treasury publishes further consultation
On 14 March 2013 HM Treasury published a further consultation on the transposition of the AIFMD into UK law (here is our post on the January 2013 Treasury consultation).
The consultation document is here; the accompanying press release is here; and the draft regulations published alongside the consultation (“The Alternative Investment Fund Managers Regulations 2013″) are here.
From the press release: read more »
15 March 2013
UK crowdfunding has a new lobby group
Which is the UK Crowdfunding Association. The website includes a Code of Practice and FAQs.
More crowdfunding here.
13 March 2013
Making AIM shares eligible for ISAs: Treasury consultation published
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 »
13 March 2013
Pre-pack administrations to be reviewed, announces Insolvency Service
The Insolvency Service yesterday announced an independent review of pre-packs. From the announcement:
“The Government has announced an independent review into pre-pack administration during a Parliamentary debate on pre-packs. A timescale will be announced at the time the review is launched in late spring.
“The Government has listened carefully to the concerns of creditors about pre-packs and that is why we already have measures in place to increase transparency and prevent abuse. Strengthened measures are being introduce to improve the quality of information insolvency practitioners are required to provide on pre-pack deals and we are using targeted monitoring of outcomes to assess whether there is evidence of abuse.
“Used appropriately, pre-packs can be a highly effective process to ensure the best deal for creditors by better enabling the rescue of businesses, preserving value and safeguarding jobs. The independent review announced by the Minister will enable further evidence to be assembled on how pre-packs are working in practice and whether further steps are needed.”"
The announcement also contains a set of Q&As explaining what a pre-pack is.
12 March 2013
European Parliament approves proposal for an EU-wide venture capital passport
The European Parliament today approved the Commission’s draft regulation for an EU-wide venture capital passport. The Commission’s response welcoming the Parliament’s approval is here. Excerpt:
“Next steps: After the vote in the European Parliament, the Council is expected to adopt both Regulations on 21 March. Both Regulations will then enter into force 20 days after their publication in the Official Journal of the European Union which is estimated to be before the summer.”
The Commission’s page on the proposed passport is here.
More on the VC passport here.
12 March 2013
SFO investigates whether its investigation into Autonomy is conflicted because of its investigations software
It would be easier to understand if the SFO simply explained what it thinks the possible conflict arising from its use of Autonomy software might be. From an SFO press release today (our emphasis):
“As has been widely reported, allegations have been made to the SFO about the circumstances of the sale in 2011 of Autonomy to Hewlett Packard. The Director of the Serious Fraud Office has decided to open an investigation into those allegations, with a view to using its powers of investigation to allow them to be tested. It is, of course, right to point out that the opening of a criminal investigation does not mean that individuals are guilty of a crime or indeed that a crime has been committed.
It has also been reported that the SFO uses an Autonomy product, Introspect, as a document management tool. The SFO is keen to ensure that there is now no conflict of interest, or perception of such a conflict and it is obliged as a first step to make inquiries to ensure that it can continue as the investigating body. It is undertaking this work at present.
The SFO will make no further comment whilst its investigation is underway.”
11 March 2013
Financial community in shock: investment banks made money underpricing IPOs
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.
11 March 2013
An Internet entrepreneur gives up his possessions
From the NYT: “Living With Less. A Lot Less.” Excerpt: read more »
9 March 2013
Women at work: Lean in
The New York Times review of Sheryl Sandberg’s “Lean In: Women, Work, and the Will to Lead” here.
Ms. Sandberg is famously ex-World Bank, ex-US Treasury, ex-McKinsey, ex-Google and now Chief Operating Officer at Facebook.
Excerpt from the NYT Review: read more »
8 March 2013
Why newspapers didn’t try paywalls earlier, and why they are working now
The newsonomics of Why Paywalls Now?, from the the Nieman Journalism Lab:
“Why, oh, why, after the newsroom carnage of the last decade, are we only now seeing paywalls being erected and reader revenues being harvested? We can sum it up in two words:
More on paywalls here.
7 March 2013
Financial Services Act 2012, the FSMA and the FCA
A good overview from Gibson Dunn on the Financial Services Act 2012 and how it changes the UK financial services regulatory regime.
7 March 2013
Shorttracker website from Castellain Capital
This useful site, shorttracker.co.uk, tracks all short positions notified to the FSA under the Short Selling Regulation.
6 March 2013
Consumer credit: Government confirms regulation will move from OFT to FCA in April 2014, Treasury and FSA issue consultation papers
The Government today confirmed that the regulation of consumer credit will move from the Office of Fair Trading to the new Financial Conduct Authority in April 2014.
HM Treasury / BIS announcement here.
HM Treasury press release here and consultation document here.
Financial Service Authority press release here and consultation document here.
6 March 2013
LIBOR: The FSA’s report into itself
The Financial Services Authority yesterday published its Internal Audit Report on LIBOR. In short, the FSA was aware of some evidence of low-balling in the 2007 to 2009 period, but not of manipulation for profit (query whether the distinction can be that exact).
The FSA’s press release is here and its Internal Audit Report is here. Much more on LIBOR here.
From the press release: read more »
4 March 2013
The CPS approach to corporate prosecutions, and company offences under the Companies Act 2006
Useful guidance from the Crown Prosecution Service on how it approaches corporate prosecutions here. A schedule of company offences under the Companies Act 2006 is included at Annex A.
4 March 2013
“The tendency for auditors to focus on satisfying management rather than shareholder needs”: Competition Commission provisional findings on the UK’s large-firm audit market
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 »
4 March 2013
NAPF to FTSE 350: expect another shareholder spring on executive pay
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 »
4 March 2013
Company and business names: BIS starts consultation on simplification
As part of the Government’s “Red Tape Challenge”, the Department of Business, Innovation and Skills on 27 February 2013 launched a consultation on simplifying the company and business names rules. The consultation document is here; the consultation closes on 22 May 2013.
4 March 2013
“Micro entity” financial reporting: Government consults on how to implement the new EU regime
On 27 February 2013 the Department of Business, Innovation and Skills published a consultation document on “Simpler financial reporting for micro-entities: the UK’s proposal to implement the ‘Micros Directive’ consultation“.
The consultation follows the EU’s adoption in February 2012 of a “Directive on the annual accounts of certain types of companies as regards micro-entities - on which, see this post.
From the executive summary of the BIS consultation: read more »
4 March 2013
Swiss vote on executive compensation
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
27 February 2013
Sainsbury’s Chief Executive, his racing driver son, and section 175 Companies Act 2006
Section 175:
“A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest which conflicts, or possibly may conflict, with the interests of the company.”
J Sainsbury plc Annual Report 2012, page 40:
“The Board…considered a potential conflict for Justin King, whose son, Jordan King, is one of the country’s top young racing drivers. His recent success is attracting interest from potential sponsors. Current sponsors include high net-worth individuals and companies with established interests in motor sport. Some of the sponsors are also suppliers to Sainsbury’s. Jordan King arranges his sponsorships through his company, 42 Racing Ltd. The Board has satisfied itself that Justin King has no direct involvement in the trading relationship between Sainsbury’s and any supplier who may have an interest in 42 Racing Ltd. It is satisfied that the governance of all supplier relationships is robust and that there is therefore no conflict of interest regarding these arrangements.”
H/T The Times 27 February 2013: Sainsbury boss Justin King’s son is given a racing start by store’s suppliers
26 February 2013
Digital news consumption / paying for content / apps: thoughtful article from FT Alphaville
26 February 2013
The Government has stopped gold-plating EU laws, says the Department of Business
Department of Business, Innovation and Skills announcement yesterday:
“In the past, Whitehall departments added additional burdens to EU laws – including rules on energy efficient buildings, and health and safety at work – which imposed extra costs and restrictions on business.
But new figures assessing the impact of a government regime introduced in 2011 to prevent gold plating show that from July 2011 to December 2012, there has been almost no gold-plating of EU legislation. read more »
26 February 2013
Corporate bonds, smaller listed company funding, ORB and advisor ignorance
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
26 February 2013
AIM company starts legal proceedings against Internet critics: “common decency” “breached”
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.”"
26 February 2013
Marty Lipton on why David Einhorn’s attempt to get Apple to distribute cash to its owners is a misuse of shareholder power
The founder of Wachtell, Lipton, Rosen & Katz on why Einhorn is all wrong.
19 February 2013
FSA says that VCTs, REITS and exchange traded products will be outside its proposed restrictions on the retail distribution of unregulated collective investment schemes
In a letter dated 11 February 2013, here.
See also: FSA consults on banning the promotion of UCIS and similar products to ordinary retail investors
19 February 2013
ESMA publishes final guidelines on “sound remuneration policies” under the AIFMD
Here, published on 11 February 2013.
19 February 2013
SME finance: useful summary of Government schemes
The Department of Business, Innovation and Skills has this month published a good summary document of the various Government schemes designed to assist SMEs in raising finance. Schemes covered (with links in the document to further information in each case) include:
- Enterprise Finance Guarantee
- Business Finance Partnership
- Start-up loans
- Seed Enterprise Investment Scheme
- Enterprise Investment Scheme
- VCTs
- Business Angel Co-Investment Fund
- Enterprise Capital Funds
- UK Innovation Investment Fund.
UK Trade & Investment, UK Export Finance, the Regional Growth Fund and the Business Banks are also covered.
19 February 2013
EU financial transaction tax: Commission proposal to be adopted under enhanced cooperation procedure
On 14 February 2013 the European Commission announced the details of the financial transaction tax (FTT) that it proposes is adopted by the enhanced cooperation procedure.
The Commission’s press release is here; a set of Q&As is here; and the proposal itself is here. The FTT will be raised on an “issuance principle”, so will apply to shares of companies incorporated in the nine participating EU countries if those shares are traded on London, irrespective of the fact that the UK is not participating in (and opposes) the FTT.
Summary from the NYT here.
Next steps (from the Q&As): “Today’s proposal foresees the FTT for the 11 Member States entering into effect on 1 January 2014. Obviously, it depends on the Council reaching agreement on the proposal in time to respect this proposed implementation date. The European Parliament and the European Economic and Social Committee and National Parliaments will also be consulted, and national transposition would then be needed.”
19 February 2013
FSA fines former Main Market company £175,000 for failure to ensure compliance with the Model Code
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 »
