![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/as-lgflag.gif)
Wednesday 30 June 2010
Australia: the ASX Corporate Governance Principles and Recommendations
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/as-lgflag.gif)
Japan: shareholder meetings
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ja-lgflag.gif)
The annual general meeting period remains concentrated although the proportion of meetings held on the same day has fallen in recent years. Yesterday was nevertheless a popular day: 40% of companies listed on First Section of the Tokyo Stock Exchange held their AGM (see here).
Tuesday 29 June 2010
UK: England and Wales: derivative claims under the Companies Act (2006)
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
[1] Section 263 sets out the matters which the judge must consider in deciding whether to grant permission. In this regard, the trial judge observed (at para. [29]):
I consider that section 263(3) and (4) do not prescribe a particular standard of proof that has to be satisfied but rather require consideration of a range of factors to reach an overall view. In particular, under section 263(3)(b), as regards the hypothetical director acting in accordance with the section 172 duty, if the case seems very strong, it may be appropriate to continue it even if the likely level of recovery is not so large, since such a claim stands a good chance of provoking an early settlement or may indeed qualify for summary judgment. On the other hand, it may be in the interests of the Company to continue even a less strong case if the amount of potential recovery is very large".
[2] With regard to the claimant's costs, the trial judge observed (at para. [56]):
The Applicant seeks an indemnity for his costs, relying on Wallersteiner v Moir (No 2) [1975] 1 QB 373. I think that is clear authority that a shareholder who receives the sanction of the court to proceed with a derivative action should normally be indemnified as to his reasonable costs by the company for the benefit of which the action would accrue. But where the amount of likely recovery is presently uncertain, there is concern that his costs could become disproportionate. Accordingly, I place a ceiling on the costs for which I grant an indemnity for the future ...".
UK: auditors' contribution to prudential regulation - FRC and FSA issue joint discussion paper
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The paper makes clear the view of the FSA and FRC that auditors need to challenge management more. In chapter 3, for example, the paper notes (para. 3.9 and 3.10):
In some cases the FSA has seen concerning valuations, provisions and disclosures, the auditor’s approach seems to focus too much on gathering and accepting evidence to support managements’ assertions, and whether managements’ valuations and disclosures comply with the letter of accounting standards, rather than whether the standards’ requirements have been applied in a thoughtful way that would better meet the standards’ objectives. In some areas, it can be questioned whether auditors always exhibit sufficient professional scepticism".
UK: the Corporate Governance Code
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Labels:
code,
combined code,
uk,
uk corporate governance code
Monday 28 June 2010
UK: key trends in the accountancy profession - POB report
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Over the past six years, the Big Four have experienced a steady increase in the proportion of fee income from non‐audit work for non‐audit clients. In contrast their fee income from non audit work to audit clients has been falling".
Labels:
accounting,
audit,
frc,
professional oversight board,
uk
Europe: revising the Market Abuse Directive - Commission consultation
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
- Should MAD be extended to cover attempts to manipulate the market?
- How can the powers of competent authorities to investigate market abuse be enhanced?
- To what extent need the sanction regimes be harmonised at the EU level in order to prevent market abuse?
- How can the system of cooperation among national and third country competent authorities be enhanced? What should the role of the European Securities and Markets Authority be in this regard?
Friday 25 June 2010
USA: Supreme Court opinions on 'honest services' - Skilling and Black
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
The Supreme Court held that Section 1346 was limited to bribes and kickbacks. A wider interpretation, the Court found, would raise constitutional vagueness concerns. As such, the Court found that Skilling did not violate Section 1346 (but it did not overturn his convictions). To quote from the opinion's headnote:
Skilling did not violate §1346, as the Court interprets the statute. The Government charged Skilling with conspiring to defraud Enron’s shareholders by misrepresenting the company’s fiscal health to his own profit, but the Government never alleged that he solicited or accepted side payments from a third party in exchange for making these misrepresentations. Because the indictment alleged three objects of the conspiracy — honest-services wire fraud, money-or-property wire fraud, and securities fraud — Skilling’s conviction is flawed. See Yates v. United States, 354 U. S. 298. This determination, however, does not necessarily require reversal of the conspiracy conviction, for errors of the Yates variety are subject to harmless error analysis. The Court leaves the parties’ dispute about whether the error here was harmless for resolution on remand, along with the question whether reversal of Skilling’s other convictions".
For further background information see Prof. Bainbridge's excellent summary here and the comments of Prof Ribstein here.
Thursday 24 June 2010
USA: NASDAQ's corporate governance standards
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
In a report published earlier this month - available here (pdf) - the Council announced its decision not to recommend that NASDAQ change its corporate governance standards. The Council reached its decision following comments received and in the light of forthcoming legislative changes. A report was published because the Council wished to make public the issues it discussed and to provide guidance for boards. The Council concluded in its report:
Regulatory changes implemented throughout the course of the past decade by the SEC, Congress, NASDAQ and the other national securities exchanges are continuing to lead to significant changes in corporate governance in the United States. Following every reform, new events occur that reopen the debate on corporate governance practices. While we are not recommending that NASDAQ change its governance listing standards or designate best practices at this time, we urge all boards to engage in periodic review of board functions, procedures, and responsibilities. We also urge NASDAQ-listed and other companies to follow closely the current debates about governance issues".
Labels:
comply or explain,
listing rules,
nasdaq,
usa
Europe: implementation of the Shareholder Rights Directive
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
The Shareholders' Rights Directive introduces minimum standards to ensure that shareholders of companies whose shares are traded on an EU regulated market have timely access to the relevant information ahead of the general meeting and simple means to vote at a distance. The publication of documents on the internet as well as enabling proxy voting and electronic participation are important elements of this. The Directive also abolishes share blocking and introduces minimum standards for the rights to ask questions, put items on the general meeting agenda and table resolutions.
While nineteen Member States have already fully implemented the Directive, eight Member States (Belgium, Cyprus, Greece, Spain, France, Luxembourg, The Netherlands and Sweden) still have to implement some or all of its provisions. Incomplete implementation means that shareholders in those Member states do not enjoy the same rights as elsewhere in Europe and are denied the rights the Directive gives them when investing in publicly listed companies. The deadline for implementation was 3 August 2009".
Labels:
belgium,
cyprus,
europe,
france,
greece,
luxembourg,
netherlands,
shareholder rights,
shareholder rights directive,
spain,
sweden
Wednesday 23 June 2010
Japan: remuneration disclosure
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ja-lgflag.gif)
Labels:
executive pay,
fsa,
japan,
remuneration,
voting
Australia: derivative actions - who bears the costs?
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/as-lgflag.gif)
Against this background, a Federal Court decision - Wood v Links Golf Tasmania Pty Ltd [2010] FCA 570 - is of particular interest. At issue was whether a company should be required to meet a shareholder's costs in bringing a derivative action under Part 2F.1A of the Corporations Act (2001). The trial judge, Finkelstein J., held that it should and stated that he was unable to see why the approach taken in Sub Rosa Holdings Pty Ltd v Salsa Sudada Production Pty Ltd [2006] NSWSC 916 - in which, at [49], it was stated that it was "common place for a person given permission to pursue a claim on behalf of a company to be required, in the first instance, to bear the burden of costs" - had been adopted. Finkelstein J. observed (paras. [9] - [11]):
The purpose of permitting a person to bring an action in the name of the company is to prevent conduct which involves some element of harm. In most cases the wrongdoer will be in control of the company. That will be the reason the company itself is not bringing the action. The purpose of the exceptions outlined in Foss v Harbottle [1843] ER 478, as well as the purpose of Part 2F.1A, is to increase the likelihood that someone brings a claim which the company ought to have commenced. In those circumstances, I can think of no good reason why the company should not bear the costs. Put another way, the principle adopted by Marks J [under the old law, in Farrow v Registrar of Building Societies [1991] 2 VR 589: if the shareholder's action “is bona fide to protect the [company] and the [company] will receive the benefit of success, there is no good reason why the expenses should be met out of the private resources of [the] shareholders”] should continue to apply under the statute.
This is not to suggest that a costs order will be made in all cases ... If a costs order is made and at any later time it turns out the claim is unmeritorious, the costs order can be recalled".
Labels:
australia,
derivative action,
shareholder,
shareholder rights
Tuesday 22 June 2010
UK: the bank levy and bank remuneration
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The budget report also states, in a short paragraph titled "Bank remuneration" at para. 2.79:
The Government will explore the costs and benefits of a Financial Activities Tax. The Government has asked the FSA to consider a number of factors in its forthcoming review of its Remuneration Code. Alongside this the Government will consult on a remuneration disclosure regime".
Labels:
banks,
financial regulation,
financial services,
fsa,
fsa remuneration code,
remuneration,
uk,
uk fsa
Ireland: the Central Bank's banking supervision strategy
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ei-lgflag.gif)
Labels:
banks,
financial regulation,
financial services,
ireland
UK: England and Wales: the true and fair view
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The decision is of interest because of what is said about the true and fair view; in this regard, Jackson LJ observed (paras. [51] and [52]):
... a joint opinion written by Mr Leonard Hoffmann QC and Ms Mary Arden in September 1983 has been highly influential and was relied upon by the judge in the present case. I recall that that joint opinion was in general circulation in the 1980s. It appears to have left an imprint on judicial thinking and on legal writing in subsequent decades. The essential thesis of Mr Hoffmann and Ms Arden was that the concept of "true and fair view" as used in the Companies Acts is an abstraction. It is for the courts to decide in any given case whether the accounts do give a true and fair view. However, in deciding this question the courts look for guidance to the ordinary practices of accountants and in particular to the standards published by the relevant professional body. These published standards not only guide accountants in the preparation of accounts but also mould the expectations of those who read or use the accounts. Therefore compliance with professional standards is prima facie evidence that the accounts present a true and fair view of the assets and liabilities of the company or the group. Deviation from accepted accounting principles is prima facie evidence that the accounts do not present a true and fair view of the assets and liabilities of the company or the group.
In subsequent decisions courts have treated compliance with published professional standards as strong evidence that the accounts in question did present a true and fair view: see Lloyd Cheyman & Co Ltd v Littlejohn & Co [1987] BCLC 303 at 313; Senate Electrical Wholesalers Ltd v STC Submarine Systems Ltd (20th December 1996, unreported) at page 20 of the transcript; Bairstow v Queen's Moat Houses plc (23rd July 1999) at pages 31-32 of the transcript and Revenue and Customs Commissioners v William Grant & Sons Distillers Ltd [2007] UKHL 15; [2007] 1 WLR 1448 at paragraphs 2 and 38".
USA: Guidance on Sound Incentive Compensation Policies
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
Labels:
banks,
executive pay,
financial services,
remuneration,
usa
Monday 21 June 2010
UK: Photo-Me International plc fined for DTR and Listing Principle breach
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The fine was £ 500,000 and it was imposed on Photo-Me International plc in respect of its failure to disclose that it was no longer engaged in exclusive negotiations for a contract when the contract was re-tendered and the company was in competition with others. Photo-Me issued a statement today - see here - in which it stated that it would not be challenging the FSA's decision and reaffirmed its position that "the FSA has underestimated the real-time difficulties faced by the Company in updating the market on the possible outcome of the relevant complex contractual negotiations".
UK: the FRC's annual report and work programme
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Plans include the introduction of the Stewardship Code for Institutional Investors and work exploring the ways in which the usefulness of information in audit reports can be enhanced from the perspective of investors and other users.
Friday 18 June 2010
UK: financial regulation reform - Parliamentary statement
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Labels:
bank of england,
banks,
financial crime,
financial regulation,
financial services,
fsa,
hm treasury,
uk,
uk fsa
USA: 'say on pay' votes lost at KeyCorp and Occidental Petroleum
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
Labels:
executive pay,
remuneration,
shareholder,
usa,
voting
Jersey: the general principles of partnership law
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/je-lgflag.gif)
Thursday 17 June 2010
UK: Hector Sants calls for directors' duties reform
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
I would thus strongly advocate intervention in the UK through changing the Companies Act framework for directors, for example. The current requirement [in Section 172 of the Companies Act (2006)] is for directors is to promote the success of the company. This is often interpreted in terms of shareholder value. Whilst this does include the need to have regard to, for example, the impact on the community, I do not believe that is sufficient. There must be a stronger and more explicit obligation to wider society. There must be clear recognition of the need for institutions to contribute to the common good".
Labels:
companies act 2006,
director,
directors' duties,
uk
UK: financial regulation reform - reactions
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Labels:
bank of england,
banks,
financial crime,
financial regulation,
financial services,
fsa,
hm treasury,
uk,
uk fsa
UK: the abolition of the FSA and the new financial regulation framework
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Other changes are outlined in the following extract from the Chancellor's speech (further information will be provided in Parliament later today by the Financial Secretary to the Treasury, Mark Hoban MP):
... the Government will abolish the tripartite regime, and the Financial Services Authority will cease to exist in its current form. We will create a new prudential regulator, which will operate as a subsidiary of the Bank of England. It will carry out the prudential regulation of financial firms, including banks, investment banks, building societies and insurance companies.
We will create an independent Financial Policy Committee at the Bank, which will have the tools and the responsibility to look across the economy at the macro issues that may threaten economic and financial stability and take effective action in response. We will also establish a powerful new Consumer Protection and Markets Authority. It will regulate the conduct of every authorised financial firm providing services to consumers. It will also be responsible for ensuring the good conduct of business in the UK’s retail and wholesale financial services, in order to preserve our reputation for transparency and efficiency as well as our position as one of the world’s leading global financial centres.
I can also confirm that we will fulfil the commitment in the coalition agreement to create a single agency to take on the work of tackling serious economic crime that is currently dispersed across a number of Government departments and agencies. We take white collar crime as seriously as other crime and we are determined to simplify the confusing and overlapping responsibilities in this area in order to improve detection and enforcement.
I have thought longer and harder and spoken to more people about all these issues than almost any other issue to have crossed my desk. We do not undertake these reforms lightly, and we do so only because we believe they are absolutely necessary. We will handle the transition carefully, consult widely and get this right. The process will be completed in 2012".
Labels:
bank of england,
banks,
financial crime,
financial regulation,
financial services,
fsa,
hm treasury,
uk,
uk fsa
Wednesday 16 June 2010
IOSCO publishes revised Objectives and Principles of Securities Regulation
![](http://www.iosco.org/images/home/logo.gif)
Tuesday 15 June 2010
Europe: consultations on derivatives and short selling
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
Monday 14 June 2010
UK: culture and corporate governance - recommendations from the Future of Banking Commission
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
- The duties of directors under the Companies Act (2006) should require them to consider the effect of the company's activities on the stability of the financial system as a whole.
- Fundamental questions should be asked about the purpose of the audit.
- Auditors should be asked to attest that banks' accounts represent a "true, fair and comprehensive statement" of the affairs of the company.
- The Stewardship Code for Institutional Investors should be mandatory for those fund managers which own bank shares.
- Non-executive directors should be charged with particular tasks and particular areas where their "challenge" is expected.
Labels:
auditors,
banks,
companies act 2006,
director,
directors' duties,
financial regulation,
uk
Friday 11 June 2010
UK: OFT market study on equity underwriting
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
In 2009, companies raised an estimated £70 billion of equity capital in the UK, paying an estimated £2 billion in fees for equity underwriting and associated services. Initial discussions have confirmed that there is some dissatisfaction with these services among corporate users of the market.The OFT proposes that the market study, which will commence this summer, should take a focused look at rights issues and other types of equity-raising by the 350 largest UK public companies, to consider whether users' concerns are justified. It intends to assess:
- How underwriting and related services are provided, including the level of competition for the work and how these different services such as advice, arranging the issue and the actual underwriting are sold.
- How underwriting services are purchased, including the information available to buyers and the incentives on them.
- How the regulatory environment affects the provision of these services.
Thursday 10 June 2010
UK: the FSA's annual report 2009/10
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Meanwhile, the report provides an overview of the FSA's actions in the past year. There is a section titled "Corporate governance and Significant Influence Functions" which states:
As part of our supervisory enhancement programme,we now place much greater emphasis on the role of senior management at firms ... in 2009/10 we completed 377 cases involving a significant influence function (SIF) interview where 27 were withdrawn by the firms concerned ...
On governance more widely, in November 2009 Sir David Walker completed his Treasury-commissioned review of corporate governance in banks and other financial industry entities; our proposals in the January [Consultation Paper] cover the FSA-specific recommendations in the review. Sir David’s recommendations address many current governance concerns and, as we have said publicly, we intend to play our part in supporting their delivery alongside the Financial Reporting Council (FRC) and work in relation to the Corporate Governance Code (formerly the Combined Code)".
Ireland: banking crisis enquiry - preliminary report published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ei-lgflag.gif)
The report contains a section on bank management and governance and this begins as follows:
In [the] setting of macroeconomic ease and growing financial integration, bank managements in Ireland faced major new opportunities. However, this environment also entailed challenges for bank governance – governance notably in areas such as internal priority setting; risk assessment systems; the enforcement of due processes for loan evaluation; disclosure standards; and checks and balances on the day-to-day operations of management. These challenges were not met. Errors of judgement in bank management and governance contributed centrally to Ireland’s financial crisis. It seems that there were key weaknesses in some banks’ internal risk management in areas such as stress-testing; the assessment of credit risks; and in some cases major lapses in the documentation of loans – and that these were factors that allowed vulnerabilities to develop".
Wednesday 9 June 2010
OECD Guidelines for Multinational Enterprises
![](http://www.oecd.org/dataoecd/img/new/common/logo_en.gif)
Europe: shareholder liability and the First Company Law Directive
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
Under Greek law, a fine in respect of infringements of legislation and other rules governing the operation of television stations was imposed jointly and severally on a company, its directors and those shareholders holding over 2.5% of the share capital. An annulment of the fine was sought and the court hearing this claim requested a preliminary ruling from the European Court of Justice as to whether the provision providing for the imposition of the fine was precluded by the First Company Law Directive (Council Directive 68/151/EEC) (now Directive 2009/101/EC).
In the opinion of Advocate General Trstenjak, which is not binding on the court, the First Company law Directive did not preclude provisions of the kind adopted by Greece. However, such provisions were, in her opinion, precluded by Articles 43, 48 and 56 of the EC Treaty (see now, respectively, Articles 49, 56 and 63 of the Treaty on the functioning of the European Union: here, pdf). The Advocate General noted (para. [57]):
In the absence of express provision in Directive 68/151 ... the power to prescribe the exceptional extension of liability to shareholders of public limited companies falls within the competence of the national legislature. In the absence of harmonisation, it is for the Member States, in principle, to decide to what extent they wish to take account of the protection of the interest in question in relation to extending liability to the shareholders of a public limited company".
Tuesday 8 June 2010
USA: IFRS and US GAAP convergence
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/us-lgflag.gif)
I foresee no reason that the adjustment to the targeted timeline for certain joint projects should impact the staff's analyses under the Work Plan issued in February 2010, particularly when that adjustment is designed to enhance the quality of the standards. Indeed, focused efforts on those standards the boards consider highest priority for the improvement of U.S. GAAP and IFRS will facilitate the staff's analyses. Accordingly, I am confident that we continue to be on schedule for a Commission determination in 2011 about whether to incorporate IFRS into the financial reporting system for U.S. issuers".
Labels:
accounting,
financial reporting,
ifrs,
sec,
usa
Monday 7 June 2010
UK: ICSA review of the Higgs guidance - consultation responses published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The consultation period ended in April and responses have now been published by ICSA: see here. A further consultation paper is expected within the next month or so.
UK: the Code of Governance for NHS Foundation Trusts
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Friday 4 June 2010
Poland: WSE Code of Best Practice for Listed Companies - new edition published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/pl-lgflag.gif)
Ireland: ISE consultation on corporate governance framework
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/ei-lgflag.gif)
Labels:
code,
combined code,
ireland,
uk corporate governance code
UK: choice in the audit market - FRC progress report
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The report summarises recent developments, including the publication of the audit firm governance code, and also describes the results of recent FRC research. It is noted that the revised Guidance to Audit committees has had a limited impact on disclosure and, with regard to market concentration, the FRC reports:
It is apparent that, despite previous increases in the number of FTSE 350 companies retaining a non‐Big Four auditor from 2006 – 2009, this trend has now ceased and may even have reversed. The February 2010 figures also show a slight drop in the number of smaller listed companies retaining a non‐Big Four auditor.
[Of] the thirteen FTSE 350 companies the [Professional Oversight Board] is aware have changed auditor since February 2008, none has switched from a Big Four to a non‐Big Four firm, and two which previously retained a non‐Big Four auditor have changed to a Big Four firm. There appears therefore to be little indication that concentration in the audit market is reducing or is likely to reduce in the near future".
Labels:
audit,
audit committee,
audit firm governance code,
auditors,
frc,
uk
UK: takeovers - more from the BIS Secretary of State
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
Too many takeovers in the UK fail even by the limited criterion of shareholder value – and often with serious implications for the people who work for the firms on both sides. For me this is not about foreign or domestic ownership – it draws no distinction between the two ...
So it is not about protectionism or strategic industries. It is certainly not about protecting bad management by blocking takeovers. It is about changing the way in which unfettered short term speculation can have damaging long term consequences. It is also about responsibility. It is renewing a sense that a company is an enterprise, not just a set of paper assets. It is about insisting that running a company and owning shares in a company should be an important responsibility, and never more so than when a company changes hands. This is an important issue for me because I think in many ways it captures something simple and important about the economy we want to build".
Labels:
bis,
takeover,
takeover code,
takeover panel,
uk
Thursday 3 June 2010
Germany: draft copy of revised Code available in English
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/gm-lgflag.gif)
Europe: Commission Communication on financial services regulation
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
These proposals will cover derivatives, credit default swaps, short-selling, improvements in the Markets in Financial Instruments Directive, revisions to the Deposit Guarantee Schemes Directive and the Investor Compensation Schemes Directive, revisions to expand the scope of the Market Abuse Directive to include derivatives, amendments to the Capital Requirements Directive (CRD IV), a Communication on sanctions in the financial services sector to promote convergence, and further work on international accounting standard convergence.
Europe: Recommendations on remuneration - Commission reports
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
Wednesday 2 June 2010
Europe: the supervision of credit rating agencies
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
Labels:
credit rating agency,
europe,
financial regulation
Europe: the governance of financial institutions - Commission publishes green paper
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/large/ee-lgflag.gif)
- improve the functioning and composition of boards of financial institutions in order to enhance their supervision of senior management;
- establish a risk culture at all levels of a financial institution in order to ensure that long-term interests of the business are taken into account;
- enhance the involvement of shareholders, financial supervisors and external auditors in corporate governance matters;
- change remuneration policies in companies in order to discourage excessive risk taking.
Amongst the questions on which views are sought are:
- Should the number of boards on which a director may sit be limited?
- Should combining the functions of chairman of the board of directors and chief executive officer be prohibited in financial institutions?
- Should a specific duty be established for the board of directors to take into account the interests of depositors and other stakeholders during the decision-making procedure?
- Should cooperation between external auditors and supervisory authorities be deepened?
- Should supervisory authorities be given the power and duty to check the correct functioning of the board of directors and the risk management function?
- What could be the content and form, binding or non binding, of possible additional measures at EU level on remuneration for directors of listed companies?
- Should disclosure of institutional investors' voting practices and policies be compulsory? How often?
The paper makes clear (at p. 11) the Commission's view that there is a role for financial regulators to play:
The main challenge in seeking to improve existing corporate governance practices will be to ensure real change in the behaviour of the relevant actors. This cannot be achieved through new regulatory and non-regulatory requirements alone. It must also be backed up by effective financial supervision".
Interestingly, whilst the paper is concerned with financial institutions, it is noted (at p. 3):
... the Commission will soon launch a broader review on corporate governance within listed companies in general and, in particular, on the place and role of shareholders, the distribution of duties between shareholders and boards of directors with regard to supervising senior management teams, the composition of boards of directors, and corporate social responsibility".
For further information see: press release | press conference video | faqs | Commission consultation page | Commission staff working document: lessons from the financial crisis | other proposals announced: credit rating agencies : remuneration : financial services regulation |
Germany: draft of revised Code published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/gm-lgflag.gif)
Update (3 June 2010): a copy of the draft code, in English, is available here (pdf).
Tuesday 1 June 2010
UK: the regulation of takeovers - Takeover Panel consultation paper published
![](https://www.cia.gov/library/publications/the-world-factbook/graphics/flags/resize/uk-lgflag.gif)
The issues discussed include: the minimum threshold of acceptance for a bid by the offeree company shareholders (is the current “50% plus one” too low?); whether voting rights should be withheld from shares in an offeree company acquired during the course of an offer period; the level of information provided by offerors in relation to the financing of takeover bids; and whether protections similar to those afforded by the Code to offeree company shareholders should be afforded to shareholders in an offeror company.
The consultation paper is unusual because the Committee has departed from its usual practice of setting out proposals and draft amendments to the Code. The Committee has, instead, set out background information for each of the issues and the arguments for and against possible change, in order to instigate further debate. Further consultation papers will be published should the debate establish that there is a case for change in respect of the issues covered.
The Secretary of State for the Department for Business, Innovation and Skills - the Rt Hon Dr Vince Cable MP - welcomed the publication of the consultation paper and stated:
Getting the UK takeover framework right for the future is an important step in Government efforts to renew and reform the way markets work. This is not about economic nationalism. Open markets have made a huge contribution to growth in the UK over the past 30 years and must continue to do so in the future. We welcome foreign investors but we want all shareholders to be empowered, the takeover process to be more transparent, directors to think about their wider long term legal duties, and takeovers to be decided on the basis of long term shareholder value rather than short-term speculation. The Takeover Panel's work can play an important part in realising these goals".
Labels:
dbis,
shareholder,
shares,
takeover,
takeover code,
takeover panel,
uk
Subscribe to:
Posts (Atom)