Proposed amendment to the Fourth Anti-Money Laundering Directive

The European Commission has announced that it will be adopting a proposed directive ("New Directive") that will amend, amongst other things, the Fourth Anti-Money Laundering Directive ("4AMLD").

The 4AMLD, as covered previously, will oblige EU member states to maintain central registers listing information on the ultimate beneficial ownership of corporate entities and trusts, with the central registers being 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".

The New Directive includes the following proposed amendments to the 4AMLD:

  • The public will be provided with access to certain essential beneficial ownership information held in registries regarding companies and trusts that engage in economic activities with a view to gain profit;
  • Tax authorities will be provided with access to beneficial ownership information of companies to enable the authorities to "crack down on those who do not pay their fair share of taxes";
  • Beneficial owners with more than 10 per cent ownership of companies that present a risk of being used for money laundering and tax evasion will need to be included in the relevant companies' register (a lower threshold than the 25 per cent ownership threshold that will apply to all other companies); and
  • The beneficial ownership registers of member states will be interconnected to facilitate greater co-operation.

Impact - The proposed amendments will broaden the applicability of 4AMLD and demonstrate the European Commission's dedication to increased transparency in the context of company ownership and structures throughout the EU. The 4AMLD is due to come into force in July 2017, but as previously covered, there is a commitment on the part of all the member states to bring this deadline forward to (or as close as possible to) the end of 2016. It remains to be seen how this will interact with the existing Persons of Significant Control (PSC) regime.

Financial Reporting Council ("FRC") amends Financial Reporting Standards ("FRS") 101

The FRC has amended FRS 101 (Reduced Disclosure Framework) following the conclusion of the 2015/16 annual review. The amendments provide additional disclosure exemptions in relation to `IFRS 15 - Revenue from Contracts with Customers' and clarify a legal requirement relating to the order in which the notes to the financial statements are presented.

An additional amendment to FRS 101, proposed by the FRC and set out in FRED 65 - Draft amendments to FRS 101 reduced Disclosure Framework - Notification of shareholders, seeks to remove the requirement to notify shareholders of the intention to take advantage of reduced disclosures. This proposal is based on feedback from the 2015/16 annual review in which respondents highlighted the notification obligation as being inconsistently applied in practice and being inefficient as regards to cost. The FRC is seeking feedback on this proposal and has set a response date of 14 October 2016.


ESMA updates Q&A on the implementation of the Market Abuse Regulation ("MAR") to address questions surrounding closed periods under Article 19(11) MAR

ESMA has updated its MAR Q&A document to address the questions that have been posed around the application and implementation of the 30 day closed period requirement under Article 19(11) MAR. As covered previously, confusion has surrounded the question of when the 30 day period should operate. This led to the FCA issuing supervisory advice that stated when an issuer announces preliminary results and the preliminary report contains all the inside information that would be required under a year-end report, the closed period should apply for the 30 days preceding the announcement of the preliminary results.

In the update to the Q&A document, ESMA confirm that the 30 day closed period will end on the announcement of the preliminary results, provided that the results contain all the key information relating to the financial figures expected to be included in the year end report. ESMA also went on to highlight that if information announced after a closed period subsequently changes following its publication, this should not give rise to a second closed period but should instead be addressed in accordance with the provisions of Article 17 MAR (Public disclosure of inside information).

Market Abuse Regulation Q&A

In light of uncertainties in the interpretation of the EU Market Abuse Regulation ("MAR"), the City of London Law Society and Law Society Committees' Joint Working Parties on Market Abuse, Share Plans and Takeover Code (the "Joint Working Parties") have drafted some questions and answers ("Q&A") as a suggested approach to implementing certain aspects of MAR. The Q&A is a useful guide as to how a significant body of professional practitioners is interpreting MAR in practice.

Views of the Joint Working Parties set out in the Q&A of particular note include:

Issuers and MAR closed periods

Issuers are not subject to MAR closed periods and so may, for example, conduct share repurchases or award shares under an employee share scheme (other than to PDMRs) in a MAR closed period unless the issuer has inside information or the action would otherwise constitute market abuse.


If an announcement by an issuer contains inside information, the issuer must make reference to that fact in the text of the announcement. A general reference such as "This announcement contains inside information" will suffice.

Persons Discharging Managerial Responsibilities ("PDMR") and share savings schemes, dividend reinvestment elections and trading plans in MAR closed periods

If a PDMR enters into a share savings scheme, makes a standing election to reinvest dividends in an issuer's shares or enters into a trading plan, the PDMR may continue to acquire and (in the case of a trading plan) dispose of shares under the relevant savings scheme, election or plan during a MAR closed period. A PDMR must not, however, enter into or cancel or amend his or her participation in any share savings plan, dividend reinvestment plan or trading plan during a MAR closed period or when he or she has inside information.


Stakebuilding is permitted by MAR, provided that the only inside information that the bidder has is its intention to bid and its intention to stakebuild.

Insider lists and national identification number

The national identification number column in the insider list templates can be left blank for UK nationals as UK citizens do not have national identification numbers.


  • ESMA has published final guidelines for persons receiving market soundings and delayed disclosure of inside information, as required by Article 11(11) and 17(11) MAR. ESMA's guidelines detail:
    • the factors potential investors are to take into account when information is disclosed to them as part of a market sounding in order for them to assess whether the information amounts to inside information;
    • the steps that potential investors are to take if inside information has been disclosed to them; and
    • the records that potential investors are to maintain in order to demonstrate that they have complied with MAR.

The guidelines generally reflect the previous draft versions published by ESMA, although some minor amendments have been made. For example, the guidance relating to scenarios in which there is a discrepancy of opinion between a disclosing market participant and a person receiving market soundings ("MSR") about whether inside information has been acquired by the MSR has been removed due to a perceived risk that the guidance might promote further disclosure of inside information. Further information about this and the other amendments can be found in ESMA's final report.

  • The SFO has concluded a second Deferred Prosecution Agreement ("DPA"), following the DPA that was approved in SFO v Standard Bank plc [2016] Lloyds Rep FC 102 last November (covered here). A redacted version of the most recent judgment has been published, although the UK small to medium sized enterprise ("SME") involved has not been named due to on-going legal proceedings. In the course of the judgment Lord Justice Leveson highlights "This application raises for the first time the problems generated [by an application for a DPA] when a modestly resourced SME is demonstrably guilty of serious breaches of the criminal law".
  • The Council of the European Union has announced that it has adopted the Anti-Tax Avoidance Directive. The directive seeks to address some of the most common methods employed by Companies to avoid tax.