Our Brexit Box brings together our own thought pieces, as well as third party materials that we have found thought provoking and helpful. It also provides details of our Brexit related events, plus key Brexit dates, activities and other issues that may be of interest.
Our approach to Brexit is to not only support you through the technical thinking around Brexit, but also help you to get on with running your business during this period of uncertainty. This site, which is being continually updated, provides you with materials to do this. If you are not on our mailing lists and want to make sure you receive our Brexit updates via email - subscribe here.
The Law Society has published a practice note on the use of electronic signatures. This has been produced by a joint working party of the Law Society Company Law Committee and the City of London Law Society Company Law and Financial Law Committees. It has been approved by Mark Hapgood QC, and is intended to be used where one or more parties to a commercial contract in the UK want to execute that contract using an electronic signature.
It sets out the position under English law and provides a view of good practice (as well as some issues to watch out for) and outlines principles for determining whether certain types of contracts, as well as minutes and resolutions, that have been signed with an electronic signature, have been validly executed.
Third parties able to bring claims against dissolved companies' insurers
The Third Parties (Rights against Insurers) Act 2010 (2010 Act) allows third parties to bring proceedings directly against insurers when the policyholder is insolvent but liable to the third party. It was enacted in 2010 but required a further statutory instrument for it to be brought into force. This was delayed, partly because the list of insolvency events had to be updated to reflect changes in insolvency law.
The 2010 Act has now been updated by regulations and will come into force on 1 August 2016. This means that third parties with a valid claim against an insolvent policyholder will be in a better position to obtain compensation from insurers as there will no longer be a requirement to restore a dissolved company to the register thereby avoiding the previous costs and delays associated with doing so.
EU Market Abuse Regulation
The Financial Conduct Authority (FCA) has updated the statement it made as regards the interaction of the 30-day closed period requirement under Article 19(11) of the EU Market Abuse Regulation (MAR) and the announcement of preliminary results in light of the European Securities and Markets Authority's (ESMA) updated Q&A on MAR. For further details, please see our CQC Update.
ESMA has published final guidelines clarifying the implementation of MAR in relation to the market soundings regime and on what it considers are legitimate interests which an issuer may seek to protect and which may, in turn, permit a delay in the disclosure of inside information. The FCA must now confirm whether or not it intends to comply with the guidelines.
The Executive Remuneration Working Group was established by the Investment Association to address the concern that executive remuneration has become too complex and is not fulfilling its purpose. A detailed overview of the recommendations will be included in the July edition of our Employee Incentives update, which will be published tomorrow.
QCA remuneration committee guide for small and mid-size quoted companies
The Quoted Companies Alliance (QCA) has published a revised Remuneration Committee Guide for Small and Mid-size Quoted Companies. The guide contains best practice guidance aimed at assisting the remuneration committees of smaller and mid-cap quoted companies in developing a bespoke approach to remuneration which supports the implementation of company strategy and effective risk management. The guide is a companion publication to the QCA's Corporate Governance Code for Mid-size Quoted Companies and to its Audit Committee Code.
Financial Reporting – FRC Updates
The Financial Reporting Council (FRC) has published an update to its discussion paper on improving reporting by smaller listed and AIM quoted companies. It provides a summary of the feedback received and the FRC's response in the key areas of reporting requirements and practices, audit practices and company governance.
The FRC has also published a note on matters for directors to consider when preparing their half-yearly and annual financial reports, the aim of which is to stimulate thinking and encourage companies to enter into early dialogue with their auditors in light of the impact of the vote to leave the EU on certain key areas of disclosure.
FRC report on corporate culture and the role of boards
Last year, the FRC announced its plans to launch an initiative to gather practical insight into corporate culture and the role of the board in shaping and embedding a healthy culture. The FRC has now published the results of its study, exploring the relationship between corporate culture and long-term business success.
"Corporate Culture and the Role of Board" (July 2016) sets out the FRC's observations of the key elements that boards should consider to help create a culture that can deliver long-term sustainable growth. The FRC's key findings can be found in our CQC update.
Equity Capital Markets
Changes to the FCA Handbook
- amend the definition of reverse takeovers to ensure that issuers cannot artificially break up a transaction to avoid it being classified as a reverse takeover; and
- set out the prescribed reporting format for reports on payments to governments.
All changes are now in force. The new DTR 4.3.10 (filing of reports on payments to governments) applies to financial years beginning on or after 1 August 2016.
Reorganisations – Employment Issues
This practice note aims to help business owners familiarise themselves with some of the key employment concepts related to a reorganisation including changing employees’ contracts, redundancy, and TUPE.