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Corporate Update is our fortnightly bulletin highlighting the latest legal and regulatory developments which we consider to be of relevance to in-house corporate counsel. If you would like to subscribe to this bulletin as a regular email, please click here.
In this issue
News
Rules relating to registered ownership of UK land by overseas entities come into effect
On 5 September 2022, and following the launch of the register of overseas entities at Companies House on 1 August 2022, new rules relating to the registered ownership by overseas entities of UK land under the Land Registration Act 2002 came into effect. The rules prohibit an overseas entity from registering an acquisition or disposal of a qualifying estate at HM Land Registry, and make it a criminal offence for an overseas entity to make a registrable disposition of a qualifying estate, in each case unless the entity has been registered as an overseas entity. Applications to the Land Registry to register overseas entities as the proprietor of a qualifying estate from this date will require an Overseas Entity ID from Companies House.
FRC Lab publishes report on improving ESG data production
The Financial Reporting Council (FRC) Lab has published a report to help companies collect and use ESG data more effectively. The report forms part of a FRC project about the production, distribution and consumption of ESG data, with the first phase focusing on the production of ESG data.
The report, based on interviews and roundtables with a wide range of organisations including listed and large private companies, includes a step-by-step approach to ESG data production and a set of questions for boards to consider in optimising the collection and use of ESG data. The emphasis is on organisations to set their ESG data collection and information objectives based on what would enable an organisation to more effectively manage and align its business with its purpose, values and strategy, and not just to satisfy external reporting requirements.
Former chairman of a listed company fined for market abuse
The Financial Conduct Authority (FCA) has published a Final Notice issued to Sir Christopher Gent, the former non-executive chairman of ConvaTec Group, imposing an £80,000 fine on him for unlawfully disclosing inside information in breach of the EU Market Abuse Regulation. The case concerned the disclosure by Sir Gent of information relating to the company’s trading prospects, in particular in light of a reduction in orders from a major customer, and the linked potential resignation of the company’s CEO, to certain shareholders prior the release of an announcement.
The decision may be of interest to issuers when considering the FCA’s approach to the treatment of information before such time as an issuer has decided whether or not it has an announcement obligation whilst it investigates an unexpected event, as well as to the issue of soliciting shareholder views on matters.
London Stock Exchange publishes Dividend Procedure Timetable for 2023
The London Stock Exchange has published its annual Dividend Procedure Timetable for 2023. The Procedure Timetable serves as a guide for UK-listed companies on setting their interim and final dividend programmes.
FRC consults on draft 2023 taxonomy suite
On 12 August 2022, the FRC published its draft 2023 taxonomy suite for public comment. Under DTR 4.1.14R, issuers are required to publish and file their annual financial reports using the single electronic reporting format (UKSEF). The draft relates to the permitted taxonomy according to which in-scope issuers must tag basic financial information and notes under this rule. Updates in this draft include:
- updated tags and guidance for interim reporting, medium-sized companies and “filleted” accounts;
- additional support for reporting alternative performance measures; and
- incorporation of FCA’s proposals relating to diversity and inclusion reporting.
The draft is open for comments for two months from 12 August 2022. The final 2023 taxonomy suite is expected to be published in October 2022, with the intention that it will take effect for financial years beginning on or after 1 January 2023.
UK Jurisdiction Taskforce consults on legal statement on digital securities
The UK Jurisdiction Taskforce (a body tasked with providing legal certainty for new technologies under English law) has published a consultation to ensure that the legal statement it intends to publish on the use of English law to support the issuance and transfer of securities using blockchain or Distributed Ledger Technology addresses issues of most concern to key stakeholders. The closing date for the consultation is 23 September 2022 and the legal statement is due to be published in December 2022.
Legislation
Draft Regulations on funding defined benefit pension schemes published
As part of a new regime for funding defined benefit pension schemes expected to take effect in Autumn 2023, the Department of Work and Pensions (DWP) has published for consultation the draft Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2023. The regulations set out the detail of the new requirements for such schemes to have a funding and investment strategy and submit a statement of strategy to the Pensions Regulator.
Commentators have noted that the regulations are more prescriptive than expected and there are concerns that they will likely require defined benefit schemes (particularly those that are still open to new members) to de-risk earlier than they might otherwise have done, with likely cost impact on scheme employers.