23 August 2013

Corporate lawyers and the phenomenon of bullshit jobs

David Graeber in Strike! Magazine, here.  Excerpt:

“…he’s a corporate lawyer working in a prominent New York firm. He was the first to admit that his job was utterly meaningless, contributed nothing to the world, and, in his own estimation, should not really exist.

There is a whole class of salaried professionals that, should you meet them at parties and admit that you do something that might be considered interesting (an anthropologist, for example), will want to avoid even discussing their line of work entirely. Give them a few drinks, and they will launch into tirades about how pointless and stupid their job really is.”

23 August 2013

Clark Gilbert, newspapers, innovation, Deseret Digital Media and the power of disruptive technology

Clark Gilbert. HBS Working Knowledge Q&A here. Summary of his argument for a basic innovative model, not industry specific, here.

23 August 2013

FRC response to Competition Commission’s recommendations on the statutory audit market

Regulatory capture. Here. Published on 12 August 2013. From the press release: Continue reading

23 August 2013

FRC Staff Guidance on The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013


23 August 2013

SFO’s first charges under the Bribery Act 2010

Here.  “…have also been charged with offences of making and accepting a financial advantage contrary to section 1 (1) and 2 (1) of the Bribery Act 2010”.

23 August 2013

FRC consultation on Strategic Report guidance

Here. Published on 15 August 2013. Consultation closes on 15 November 2013.  From the press release: Continue reading

23 August 2013

The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013

Final form here. Coming into force on 1 October 2013.

From the Explanatory Memorandum: Continue reading

23 August 2013

Business, Innovation and Skills Committee report on Kay Review

Here. Published on 25 July 2013. Poor quality, and bizarre suggestion that the Government look at a FTT.

23 August 2013

In one second on the Internet there are…


23 August 2013

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013

Final form here. Commencement date 1 October 2013 and having effect in respect of financial years ending on or after 30 September 2013.

From the Expanatory Memorandum: Continue reading

23 August 2013

UKLA Primary Market Bulletin No.6

Here. Published on 30 July 2013.

  • More guidance for sponsors.
  • ESMA updates
  • Changes to the Knowledge Base.
23 August 2013

Profit forecasts, quantified financial benefits statements and material changes in information: Takeover Panel RS 2012/1

Here. Published on 24 July 2013. Changes to the Code are effective from 30 September 2013.

23 August 2013

ABI recommendations on corporate governance and shareholder engagement

Published on 25 July 2013.  Document here. Recommendations regarding role of NEDs in M&A transactions, and the establishment of an “Investor Exchange” to facilitate collective engagement. Refers to the Kay Review. Excerpt from the press release:

“Following Professor Kay’s 2012 review of UK equity markets and the newly revised FRC Stewardship Code, there has been increasing debate over the different responsibilities in corporate governance and, in particular, on the role of institutional investors in overseeing the companies they invest in.

In this document, to help address these wide-ranging issues, we therefore review the existing roles and responsibilities in corporate governance and shareholder engagement and make recommendations on how these may be enhanced.

This report demonstrates that the UK Corporate Governance system and shareholder engagement are generally working well.

However, ABI members believe that practices can be improved; in particular, we make recommendations that should:

  • Improve corporate governance reporting

  • Encourage companies to review the time-commitment requirements of different non-executive roles and how different non-executive roles may best be structured

  • Empower non-executive directors, with measures to ensure they receive the right level of information to enhance their ability to support and challenge the Executive Directors

  • Ensure Non-Executive Directors receive early and full information on potential M&A transactions, including where appropriate independent advice

  • Maintain the UK’s leadership position in shareholder engagement, by opening ABI collective engagement to non-members and launching an Investor Exchange mechanism

  • Improve mutual understanding by encouraging companies to develop a transparent investor relations programme that includes the schedule of corporate governance-related meetings”

23 August 2013

Gov.uk style guide

Here.  Excerpt:

“To keep content understandable, concise and relevant, it should be:

  • specific
  • informative
  • clear and concise
  • brisk but not terse
  • incisive (friendliness can lead to a lack of precision and unnecessary words) – but remain human (not a faceless machine)
  • serious but not pompous
  • emotionless – adjectives can be subjective and make the text sound more emotive and like spin

You should:

  • use contractions (eg can’t)
  • not let caveats dictate unwieldy grammar – eg say ‘You can’ rather than ‘You may be able to’
  • use the language people are using – use Google Insights to check for terms people search for
  • not use long sentences with complicated sub-clauses

(Note: words ending in ‘–ion’ and ‘–ment’ tend to make sentences longer and more complicated than they need to be.)”

24 July 2013

The Single Market: Review of the Balance of Competences between the United Kingdom and the European Union

Published in July 2013 by the UK Government. From the executive summary:

“… integration has brought to the EU, and hence to the UK, in most if not all observers’ opinions, appreciable economic benefits. It has also spread the UK’s liberal model of policy-making more widely across the EU. But it has brought with it constraints on policy-making of varying kinds, and a regulatory framework which some find difficult to operate within or find burdensome, even if the obligations are not necessarily any greater than would have been imposed nationally. Is that trade-off, between cost and benefit, between economics and politics, of overall benefit to the UK? … Most observers, and indeed most of the evidence received for this report, answer positively. They do so, not without qualifications or reservations, but with a focus on the economic benefits already achieved… and on those potentially available in the future.”


24 July 2013

Audit market: five year tendering for FTSE 350 companies, but no mandatory switching: Competition Commission provisional decision

On 22 July 2013 the Competition Commission published its provisional decision “regarding the remedies it is considering introducing when it publishes its final report on the supply of statutory audit services to large companies in the UK this autumn”.

The summary of the provisional decision is here. From the press release:

“The main measures the CC has proposed are as follows:

  • FTSE 350 companies should put their statutory audit engagement out to tender at least every five years. Companies may defer this obligation to go out to tender by up to two years in exceptional circumstances. There will be a transitional period of five years before the measure comes into full effect. Continue reading
24 July 2013

Diagnosing bribery risk: guidance for the conduct of effective bribery risk assessment from Transparency International UK

Published in July 2013 and here.

24 July 2013

Quindell: closing the swap and using underlying shares for an acquisition

Quindell announcement of 17 July here. See earlier post here.

24 July 2013

Company ownership: transparency and trust discussion paper from BIS

Following earlier pronounements at the G8, on 15 July 2013 the Department of Business, Innovation and Skills published a discussion paper (with executive summary here) on “Trust and transparency: enhancing the transparency of UK company ownership and increasing trust in UK business”. There is also a section on pre-packs and insolvency.

From the press release:

The main elements of the ‘transparency’ section of the paper include: Continue reading

24 July 2013

FRC advice on conducting effective audit tenders

The Financial Reporting Council published on 9 July 2013 “Audit tenders: notes on best practice“. From the press release: Continue reading

24 July 2013

ABI “Encouraging Equity Investment” report

Published on 11 July 2013 and here. From the press release:

“The ABI has conducted an extensive review of processes for both Initial Public Offerings (IPO) and secondary capital raisings involving interviews with a wide range of market participants.

The report finds that investors believe the UK Equity model is functioning satisfactorily but makes a number of substantive recommendations to ensure the continued health and attractiveness of London as a financial centre whilst maintaining a flow of high-quality companies coming to the market.

The report makes recommendations that should:

  • Help address the information asymmetry that exists in favour of issuers and vendors at the expense of investors and improve efficient price formation
  • Improve minority shareholder protection in companies with one or more controlling shareholders
  • Clarify guidance for non-pre-emptive secondary capital raisings
  • Improve fee disclosure both at IPO and for secondary capital raisings.”
24 July 2013

Walker Guidelines for private equity: future development

In July 2013 the Private Equity Monitoring Group on Transparency and Disclosure published “Future development of the Walker Guidelines“, to

  • answer “some of the most commonly asked questions about the Guidelines”;

  • provide “detail on how the Guidelines interact with the requirements of the most significant EU directive to affect firms from a regulatory perspective – the Alternative Investment Fund Managers Directive”; and

  • explain “the changes to narrative reporting we are monitoring that would require the Guidelines to be updated, such as the introduction of a strategic report. These changes to the Companies Act 2006 will affect all private companies, as well as quoted companies, and it is the responsibility of the directors of those companies – which often include private equity firms – to ensure compliance from October 2013”.

24 July 2013

ISDX Growth Market: new rules for issuers, and corporate advisers handbook

Following its consultation earlier this year, ISDX published on 8 July 2013 (and effective from 9 July 2013) revised Rules for Issuers and a revised Corporate Advisers Handbook; they can be accessed here.

The Market Notice announcing these changes is here and details of the consultation are here.

24 July 2013

SEC removes prohibition on general solicition, permits advertising in the private marketplace provided sales are limited to accredited investors

The Securities and Exchange Commission on 10 July 2013 announced that it is to lift the prohibition on companies engaging in general solicitation or general advertising when relying on the Rule 506 exemption from SEC registration.

As the NYT Dealbook observed, the move lifts “an 80-year-old ban on advertising by hedge funds, buyout firms and start-up companies seeking capital, a move that will fundamentally change the way that many issuers raise money in the private marketplace”.

From the SEC announcement: Continue reading

23 July 2013

ICSA updates Audit, Remuneration, Nomination, Risk Committee, Executive committees and Matters reserved for the board

ICSA has published (July 2013) updated Terms of Reference for Audit, Remuneration, Nomination, Risk  Committee, Executive committees and Matters reserved for the board, “to reflect changes to the UK Corporate Governance Code published in September 2012 and other related guidance and regulation”. From the ICSA guidance webpage:

Audit committee

Risk committee

Nominations committee

Remuneration committee

Executive committees

Matters reserved for the board

23 July 2013

The Government’s response to the Parliamentary Commission on Banking Standards

HM Treasury published its response to the final report of the Parliamentary Commission on Banking Standards, “Changing banking for good”, on 19 July 2013. There is a useful table from page 49 of the Treasury response, setting out the Treasury’s response to each of the Commission’s recommendations.

23 July 2013

Employee ownership: company model documentation from BIS

The Department of Business Innovation and Skills published on 4 July 2013 a set of model documents for employee-owned companies. From the BIS webpage:

“This model documentation was produced for the Department for Business, Innovation and Skills (BIS) by Pett, Franklin and Co. LLP. It is a significant step towards meeting the 2012 Nuttall Review recommendation to develop ‘off-the-shelf’ toolkits to support employee ownership. Employee ownership is where all employees have a significant and meaningful stake in a business.

The related guidance explains the model documentation and some of the key options for businesses to consider in moving to employee ownership.”

We covered the Nuttall Review here.

23 July 2013

McKillen v Misland: Court of Appeal confirms Richards J judgment: discussion of section 994 jurisdiction and pre-emption rights

The Court of Appeal confirmed on 3 July 2013 the judgment of David Richards J in McKillen v Misland. We covered the first instance decision here.

The Court of Appeal judgment is here and a note from One Essex Court is here. Excerpt from note:

“Both the Court of Appeal’s judgment and the Judge’s ‘meticulous and clear’ judgment will repay close scrutiny for its treatment of the section 994 jurisdiction and pre-emption rights in the context of disputes about control over companies.”

23 July 2013

Accounting directive adopted by the European Parliament and the Council of the European Union; Linklaters summary

On 26 June 2013. Commission webpage here. Linklaters overview here. The accounting Directive is expected to be published in the Official Journal later this summer. Member States will then have two years to implement the Directive

23 July 2013

BIS publishes “Corporate responsibility: call for views”; and global sources on corporate responsibility

Call for views document here. Department of Business Innovation and Skills press release 27 June 2013 here. Excerpt:

“A call for views on corporate responsibility has been published after Business Minister Jo Swinson spoke of its importance at a ‘Transparency for Growth’ event today in London.

The Minister outlined proposals by government to build and act upon the evidence base on the benefits and obstacles for businesses in promoting ethical, environmental and social practices. The call for views will provide the opportunity for business and others stakeholders to help shape the UK’s vision, ambitions and priorities in respect of corporate responsibility. It will provide the basis for a framework for action on corporate responsibility to be published by the end of 2013. Continue reading

23 July 2013

FRC Chairman urges Europe to act against declining equity markets

Financial Reporting Council press release, 27 June 2013. Excerpt:

“Chairman of the Financial Reporting Council (FRC), Baroness Hogg, today warned policymakers that urgent action is needed to arrest the decline in European equity markets. Speaking at the Federation of European Stock Markets (FESE) annual conference in Berlin, Baroness Hogg highlighted the need for a debate on how to build capital markets capable of financing sustained economic recovery. The ability to access capital at reasonable rates will become increasingly important to Europe’s competitiveness as other fast growing regions seek to obtain a greater share of limited supply.  Baroness Hogg said,

“Equity markets are shrinking before our eyes. But risk capital is essential to business, fuelling investment and economic growth, generating jobs and wealth for future generations.   Markets need to be regulated in a way that means people can trust their integrity. But there needs to be a second objective to regulation as well, which is to improve the health of the listed equity market and the ability of listed companies to attract finance for investment.”

Baroness Hogg’s comments come after the European Commission consulted on the long-term financing of the European economy. In its response to the European Commission’s Green Paper the FRC urged Europe to consider how to develop pools of long term capital to invest in equities and identified three courses of action: Continue reading

23 July 2013

FRC: Thinking about disclosures in a broader context: feedback statement

Feedback statement here. Financial Reporting Council press release 26 June 2013, excerpt:

“The FRC has today issued feedback on its discussion paper ‘Thinking about disclosures in a broader context’. In October 2012, the FRC published a discussion paper setting out a roadmap for a disclosure framework designed to encourage more relevant financial reporting including beyond the confines of the financial statements. There was broad support for FRC‘s suggestions that:

  •   Improving disclosure should be a shared responsibility between preparers, regulators, auditors and users

  •   The main end-users of reports are investors and disclosures should be framed with that in mind, having regard to communication, relevance and materiality.

  •   There should be a move away from piecemeal approach to disclosures by standard setters and regulators and that a framework would provide a benchmark for measuring suggested disclosures.”

23 July 2013

The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013: final draft

Final draft regulations here, expected to take effect on 1 October 2013. BIS press release 25 June 2013. Excerpts:

“The main changes to the pay reporting regulations include:

  • A pay policy, which will be subject to the new legally binding vote.

  • An illustration of the level of awards that could pay out for various levels of performance meaning pay information is presented in a more understandable format.

  • All elements of director’s pay will be reported in a single, cumulative figure. The regulations define how this should be calculated so that all companies are consistent in their approach.

  • Improved disclosure on the performance conditions used to assess variable pay of directors.”

“The GC100, an association of legal officers and company secretaries working in FTSE 100 companies, is working alongside investors to produce relevant guidance. This guidance will be published in September 2013.”


23 July 2013

Deferred Prosecution Agreements: consultation on Draft Code of Practice

Press release from the Serious Fraud Office, 27 June 2013:

“The Director of the Serious Fraud Office and Director of Public Prosecutions today published a draft Code of Practice setting out their approach to the use of Deferred Prosecution Agreements (DPAs).

This new tool was introduced in the Crime and Courts Act 2013, which received Royal Assent in April this year.

A DPA involves a company reaching an agreement with a prosecutor where the company is charged with a criminal offence but proceedings are automatically suspended. The company agrees to a number of conditions, which may include payment of a financial penalty, payment of compensation, and co-operation with future prosecutions of individuals. If the conditions are not honoured, the prosecution may resume. Continue reading

23 July 2013

DEFRA guidance on measuring and reporting greenhouse gas emissions

Webpage here. Environmental Reporting Guidelines: including mandatory greenhouse gas emissions reporting guidance, published 19 June 2013, here.

From the DEFRA webpage:

“From 1 October 2013 the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 will require all UK quoted companies to report on their greenhouse gas emissions as part of their annual Directors’ Report. That requirement affects all UK incorporated companies listed on the main market of the London Stock Exchange, a European Economic Area market or whose shares are dealing on the New York Stock Exchange or NASDAQ.

The government encourages all other companies to report similarly, although this remains voluntary.

Advice for those companies required to report, as well as those for which it remains voluntary, is included in the environmental reporting guidance.

A guide for small businesses on how to measure and report greenhouse gas emissions is also available.”


23 July 2013

Parliamentary Commission on Banking Standards: final report, “Changing banking for good”: a new Senior Persons Regime

Published on 19 June 2013 and here. Press release here. Key recommendations:

  • “A new Senior Persons Regime, replacing the Approved Persons Regime, to ensure that the most important responsibilities within banks are assigned to specific, senior individuals so they can be held fully accountable for their decisions and the standards of their banks in these areas;
  • A new licensing regime underpinned by Banking Standards Rules to ensure those who can do serious harm are subject to the full range of enforcement powers;
  • A new criminal offence for Senior Persons of reckless misconduct in the management of a bank, carrying a custodial sentence;
  • A new remuneration code better to align risks taken and rewards received in remuneration, with much more remuneration to be deferred and for much longer;
  • A new power for the regulator to cancel all outstanding deferred remuneration, along with unvested pension rights and loss of office or change of control payments, for senior bank employees in the event of their banks needing taxpayer support, creating a major new incentive on bankers to avoid such risks.”
23 July 2013

International Financial Reporting Standards: issues arising in relation to the Companies act 2006: opinion from George Bompas QC

Opinion from George Bompas QC, commissioned by the Local Authority Pensions Forum and other investors and which in the words of the LAPF:

“… suggests that directors must override IFRS in order to comply with existent company law. The opinion also finds that directors may need to ignore  the legal advice obtained by the Financial Reporting Council (FRC) on this issue.”

Opinion here. Excerpt from LAPF covering note: Continue reading

23 July 2013

European Long-Term Investment Funds: FAQs from the European Commission

Here, dated 26 June 2013.

“The proposed European Long-Term Investment Fund, or ELTIF, is a new type of collective investment framework allowing investors to put money into companies and projects that need long-term capital. It is aimed at investment fund managers who want to offer long-term investment opportunities to institutional and private investors across Europe, e.g. in infrastructure projects. To benefit from this cross-border passport the new Funds would have to meet rules designed to protect both investors and the companies and projects they invest in.”

23 July 2013

Policy Exchange plan for privatising the state-held banks

Here. Continue reading

23 July 2013

The purpose of the UKLA listing regime; and corporate access

Speech on 18 June 2013 by David Lawton, FCA Director of Markets, to the Investor Relations Society. Discusses what the UKLA listing regime does and doesn’t do, and also corporate access: Continue reading


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