GENERAL CORPORATE

PSC register – minor clarification

A statutory instrument was published this week making two minor amendments to new Part 21A of the Companies Act 2006 (“CA 2006”) (the PSC regime) which comes into force on 6 April 2016. The amendments clarify that:

  • an individual with significant control over a company is registrable in relation to that company if the individual holds an interest in the company either directly, or if each of the individual’s indirect majority stake interests is not held through at least one relevant legal entity (“RLE”); and
  • a RLE is registrable in relation to a company if the RLE holds an interest in the company directly, or if each of its indirect majority stake interests is not held through at least one other RLE.

Impact – prior to publication of the amendments it was thought that a PSC or RLE would need to be registered unless their interest was held through a chain of RLEs. The statutory instrument removes the requirement to record all RLE or PSC interests where there is a non RLE entity in a chain of companies.

Removal of directors and registered office disputes – draft regulations published

Removal of directors - 6 April 2016

The Small Business, Enterprise and Employment Act 2015 (“SBEE”) has amended the CA 2006 to remove the requirement that a director or secretary provide a formal “consent to act” and replaced it with an obligation on the company to make a statement that the appointee has consented to act as a director or secretary. Any person appearing on the public register as a director will, from 6 April 2016, be able to apply to have their name removed if they did not consent to act. Draft regulations have now been published, amending the Registrar of Companies and Applications for Striking Off Regulations 2009 (SI 2009/1803), to introduce a new system for removing from the register material naming a person as a company director.

Registered office disputes - 6 April 2016

SBEE enables regulations to be made requiring the registrar, on application by any person, to change a company’s registered office if the registrar is satisfied that the company is not authorised to use the address. Draft regulations have now been published providing for the initial application process and the procedure that must be followed unless the registrar dismisses the application immediately because there is no reasonable prospect of success. Where the address of a registered office is changed by the registrar, certain specified duties (which relate to inspection of company records, or the disclosure or display of information) will be temporarily suspended.

OTHER ITEMS

  • It has been confirmed that an independent review, led by Sir Philip Hampton, will continue the work of Lord Davies’ review. The review will “focus on building the pipeline for female executives and emerging non-executive directors, to continue the work already done on increasing board representation”. Lord Davies, in his initial report published in 2011, recommended that FTSE 100 companies should aim for a minimum of 25% of female board representation by 2015 with one third of new appointments being women. A five year summary published last autumn by the Davies Report steering board noted that women’s representation on the FTSE 100 stood at 26%. The summary nevertheless suggested a number of areas for improvement and focus including: reconvening an independent steering body with a newly appointed chair and members to sustain, monitor and support progress; continuing the voluntary approach for a further five years; increasing the target to 33%; extending the focus outside the FTSE 100 companies to include FTSE 350 companies; and strengthening women’s representation in executive positions.
  • A joint report published this week by the Government Equality Office and Deloitte shows that there remains an average pay gap of 19.2% between women and their male counterparts. The report notes, amongst other things, the Government’s intention, set out in SBEE, to require businesses with 250 or more employees to publish information showing whether there are differences in the pay of male and female employees. The Government has confirmed that revised regulations are expected to be published shortly. For more detail of the Government’s proposals to date, click here.
  • The EU Commission has proposed extending the implementation date for MiFID II by a year to 3 January 2018 to “take account of the exceptional technical implementation challenges faced by regulators and market participants”. MiFID (the Markets in Financial Instruments Directive) was intended to create a more competitive and integrated EU financial market. MiFID II aims to address recent events and developments by reinforcing and replacing the current regime.
  • The European Commission is encouraging Member States to bring forward the date for effective transposition and entry into force of the EU’s fourth money laundering directive to “end 2016 at the latest”. Amongst other things, the Directive will oblige EU member states to maintain central registers listing information on the ultimate beneficial ownership of corporate entities and trusts. Under the proposals, the central registers would be accessible to competent authorities and their financial intelligence units (without any restriction), to “obliged entities” (such as banks conducting customer due diligence) and to others where they can demonstrate a “legitimate interest”.
  • ESMA has published an opinion confirming that a prospectus drawn up in accordance with Turkish laws and regulations can constitute a valid prospectus under the Prospectus Directive for the purposes of its approval by the home competent authority of a member state.
  • The Government has published guidance for directors of companies fully or partly owned by the public sector. The guidance focuses in particular on dealing with directors’ conflicts, liabilities and insurance.