Welcome to the latest edition of Corporate Update, our fortnightly bulletin offering a five-minute read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.
In this issue
NEWS
Government issues written statement on revocation of retained EU law
On 10 May 2023, Kemi Badenoch MP issued a Written Statement on amendments that the government will table to the Retained EU Law (Revocation and Reform) Bill (Retained EU Law Bill) for the House of Lords Report stage, which began on 15 May 2023.
The Retained EU Law Bill was introduced to Parliament in September 2022 and would automatically revoke, or ‘sunset’, most retained EU law (other than those relating to financial services which are dealt with separately in the Financial Services and Markets Bill) at the end of 2023. Rather than a general revocation of retained EU law within scope on 31 December 2023 (unless specifically preserved), the amendment to be tabled by the government will instead replace this current “sunset provision” in the Bill with a list of specified retained EU laws that it intends to revoke under the Bill by that date.
The government has also published Policy Paper: Smarter regulation to grow the economy, which sets out its vision for reform of regulation, including revision of the better regulation framework.
CGI publishes report on greenwashing from a governance perspective
On 3 May 2023, the Chartered Governance Institute UK & Ireland (CGI) published its report on tackling greenwashing from a governance perspective. The report places greenwashing in a governance context and considers the different forms of greenwashing, the legal and regulatory framework, and the risks of greenwashing for organisations.
The report sets out a framework for governance professionals to build 'greenwash-proof' organisations and highlights key principles that governance professionals should embed into their work and their sustainability efforts.
Takeover Panel consults on changes to Rule 21 restrictions on frustrating action
On 15 May 2023, the Takeover Panel announced the publication of Public Consultation Paper 2023/1 (PCP 2023/1) setting out proposed amendments to Rule 21 of the Takeover Code. Rule 21 restricts a board of a company subject to a takeover bid (a target company) from taking certain actions without shareholder approval on the basis that those actions might result in an offer or possible offer being frustrated.
The Panel’s Code Committee is proposing to amend Rule 21.1 to provide increased flexibility for target companies to carry out their ordinary course activities. Broadly, the Code Committee is amending the rule so that the target board will be restricted from taking various actions, notably the issue and buyback of shares, disposals and acquisitions of material assets, and the entering into, or amending of, contracts, only if the proposed action is outside the ordinary course of the company’s business. Other changes are being proposed including in relation to rules relating to the equality of information provided to competing bidders.
The consultation is open until 21 July 2023 and the Code Committee expects to publish a Response Statement in Autumn 2023, with changes anticipated to come into effect one month after publication of the Response Statement.
City of London Law Society publishes new edition of its certificate of title
On 10 May 2023, the Land Law Committee of the City of London Law Society published the eighth edition of its Certificate of Title (CLLS Certificate).
The CLLS Certificate is widely used in corporate, lending and real estate portfolio transactions and was last updated in 2016. Changes in this eighth edition include a new qualification that the certifying law firm expresses no opinion on whether the National Security and Investment Act 2021 applies to any transaction and has not investigated any related aspect and new confirmations in relation to registration in the register of overseas entities.
FCA launches new webpage on the future public offers and admissions to trading regime
On 5 May 2023, the Financial Conduct Authority (FCA) launched a new Webpage: New regime for public offers and admissions to trading explaining its role in establishing the regulatory framework for public offers that will replace the existing prospectus regime and outlining its plans to engage with the market to inform its work. The webpage also sets out an expected calendar of events and publications.
Under the new regime, the FCA will be responsible for specifying when a prospectus is required and its content requirements. The FCA has begun engaging with market participants on its reforms prior to formal consultation next year, and expects to publish a series of engagement papers on key topics related to the reforms, including whether or how to set prospectus requirements for companies seeking admission of their securities to trading on regulated markets.
LEGISLATION
Register of Overseas Entities (Definition of Foreign Limited Partner, Protection and Rectification) Regulations 2023 published
On 16 May 2023, the Register of Overseas Entities (Definition of Foreign Limited Partner, Protection and Rectification) Regulations 2023 were published. The Regulations aim to improve the effectiveness of certain aspects of the register of overseas entities established under the Economic Crime (Transparency and Enforcement) Act 2022 by, among other things, prescribing the characteristics of a “foreign limited partner”. allowing the removal of certain information following a rectification application in some circumstances, and improving the protection elements of the register. No substantive changes have been made to the draft regulations published in earlier in March. The Regulations come into force on 1 June 2023.
PUBLICATIONS
FCA publishes blueprint for a new listing regime
Following the FCA’s publication of CP23/10 (which proposes radical changes to the listing regime in an effort to attract more companies to list on the UK Main Market and encourage companies that are already UK-listed to retain their UK listing), Slaughter and May has published a client briefing summarising the main proposals and the firm’s view of them.
