5 min read
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
Institute of Directors consults on code of conduct for directors
On 6 June 2024, the Institute of Directors published a consultation on a Code of Conduct for Directors. The Code has been developed by a specially-formed Commission chaired by Lord McNicol. Adherence to the Code is voluntary and has been structured around the following six ‘Principles of Director Conduct’, with each Principle underpinned by certain specific 'Undertakings' :
- Leading by Example: demonstrating exemplary standards of behaviour in personal conduct and decision-making;
- Integrity: acting with honesty, adhering to strong ethical values, and doing the right thing;
- Transparency: communicating, acting and making decisions openly, honestly and clearly;
- Accountability: taking personal responsibility for actions and their consequences;
- Fairness: treating people equitably, without discrimination or bias;
- Responsible Business: integrating ethical and sustainable practices into business decisions, taking into account societal and environmental impacts.
Responses should be submitted by 16 August 2024.
DBT publishes progress report on the Economic Crime and Corporate Transparency Act 2023
The Department for Business & Trade has published a progress report on the implementation and operation of Parts 1 to 3 of the Economic Crime and Corporate Transparency Act 2023. Parts 1 to 3 introduced various reforms, including reforms of various company administration processes, new objectives and powers for the registrar of companies, reforms to the limited partnership regime and certain new provisions relating to the Register of Overseas Entities.
The Report provided an update on progress made in implementing these reforms and set out the next steps. So far 13 statutory instruments implementing the reforms have been laid in Parliament, while the plan was to deliver further statutory instruments throughout 2024.
It was anticipated in the Report that, subject to the parliamentary timetable and passage of secondary legislation, Authorised Corporate Service Providers will be able to register in winter 2024/25, identity verification will commence during H1 2025 and limited partnership reforms will be introduced during 2026. However, whether this schedule for implementation will be delayed due to the upcoming general election remains to be seen.
ESMA statement on good practice for communications between issuers and analysts
On 29 May 2024, the European Securities and Markets Authority (ESMA) published a statement on good practices in relation to what are known as “pre-close calls” (i.e. communication sessions between an issuer and an analyst or group of analysts who generate research, forecasts, and recommendations related to the issuer’s financial instruments for their clients). ESMA and other national regulatory authorities had recently observed an increase in volatility in EU share prices shortly after such calls, which had therefore raised suspicions about possible unlawful disclosure of inside information.
The purpose of the statement was to remind issuers of the legislative framework applicable to “pre-close calls” and to identify good practices to which issuers should pay particular attention when engaging in such calls. The importance of establishing and maintaining good practices was emphasized given the disclosure rules in Article 17 of the Market Abuse Regulation and Commission Implementing Regulation (EU) 2016/1055.
Legislation
Digital Markets, Competition and Consumers Act 2024 receives Royal Assent
On 24 May 2024, the Digital Markets, Competition and Consumers (DMCC) Act 2024 received Royal Assent. As mentioned in our previous edition, the Bill was passed in the “wash-up” period ahead of the upcoming general election. The Act introduces sweeping reforms to UK competition law and consumer protection. It creates a new ex-ante regulatory regime aimed at increasing competition in digital markets and modernises investigative and enforcement powers related to competition and consumer laws.
Part 1 of the DMCC establishes a new digital markets regime overseen by the Digital Markets Unit within the UK Competition and Markets Authority (CMA), which will apply to large companies designated by the CMA as having “strategic market status” in respect of a digital activity. Part 2 of the DMCC introduces various changes aimed at bolstering the CMA’s investigative and enforcement powers to address (suspected) infringements of Chapter 1 and 2 of the Competition Act 1998, while Part 3 provides for two civil enforcement regimes for consumer protection law: a new direct enforcement regime to be administered by the CMA, and an enhanced version of the existing court-based regime.
For further details, see Publications below.
Market Insights
ONS publishes Q1 2024 data on UK M&A activity
On 4 June 2024, the Office of National Statistics (ONS) published its bulletin on UK M&A activity for the first quarter of 2024 (January to March). The provisional estimates show that the number of monthly domestic and cross-border M&A fell between January and March.
- The number of domestic and cross-border M&A was 426 (which was 18 transactions fewer than the previous quarter).
- The value of inward M&A was £6.1 billion (£4.1 billion lower than in the last quarter) while the total value of outward M&A was £4.4 billion (£0.9 billion higher than in the previous quarter).
Publications
Competition and Regulatory Newsletter: DMCC Act receives Royal Assent
Slaughter and May has published the latest edition of its regular Competition and Regulatory Newsletter which provides a brief overview of the long-awaited Digital Markets, Competition and Consumers Act 2024. The Act introduces sweeping reforms to UK competition law and consumer protection.