Essential Corporate News – Week ending February 23, 2018

Publication | February 23, 2018

Introduction

Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.

BEIS: Draft Companies (Disclosure of Address) (Amendment) Regulations 2018

In light of an increasing number of complaints about people being put at risk of identity fraud because their home address is publicly available on the public register at Companies House, the Department for Business, Energy and Industrial Strategy (BEIS) has published draft regulations, the Companies (Disclosure of Address) (Amendment) Regulations 2018. These amend the  Companies (Disclosure of Address) Regulations 2009 (2009 Regulations) to remove restrictions on making information about individuals’ residential addresses unavailable to the public by the Registrar of Companies (Registrar).

Section 1088 Companies Act 2006 (CA 2006) allows the Secretary of State to make regulations to enable people to apply to the Registrar to make their residential address unavailable for public inspection.

The 2009 Regulations, made under section 1088, allow applications from individuals where there is a serious risk that they, or a person living with them, will be subject to violence or intimidation as a result of the activities of a company with which they are involved. Applications can only be made in respect of information that was filed with the Registrar on or after January 1, 2003.

The “serious risk of violence or intimidation” test in the 2009 Regulations only relates to the activities of the company. This does not cover the situation where a person may find themselves at serious risk of harm from, for example, their domestic situation or wider activities not associated with the company. In addition, the 2009 Regulations do not allow individuals who may be at risk from identity theft and fraud to have their residential address suppressed.

The draft regulations amend the 2009 Regulations to remove the requirement that individuals must show a serious risk of violence or intimidation arising from a company’s activities and to allow applications in respect of information filed before January 1, 2003. They capture further instances in which an individual’s address may have been placed on the register. They also allow a member of a company to make an application for suppression without having to show a serious risk of violence or intimidation.

The 2009 Regulations allow a company to apply for the suppression of residential address information of all its members. It should be noted that the “serious risk of violence or intimidation” test is being retained in relation to this due to the potential effect on corporate transparency of large scale redactions of historic information. The “serious risk of violence or intimidation” test is also being retained in respect of an application by a person who registers a charge.

In addition to amendments to the 2009 Regulations, the draft regulations make amendments to the Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 and Scottish Partnerships (Register of People with Significant Control) Regulations 2017.

The draft regulations are yet to be made and will come into force on the day after they are made. The BEIS press release states that they will come into force by the end of Summer 2018.

(BEIS, Companies (Disclosure of Address) (Amendment) Regulations 2018, 22.02.18)

(BEIS, Explanatory memorandum, 22.02.18)

BEIS: Government review to see how employers are improving ethnic minority progression in the workplace

On February 21, 2018 the Department for Business, Energy & Industrial Strategy (BEIS) announced plans to review how employers are improving ethnic minority progression in the workplace. The review is part of BEIS’s ambition to create better, higher-paying jobs in every part of the UK and ensure that people from all backgrounds can be successful in the workplace.

The research findings will reveal whether companies are reporting their ethnicity pay gap, which is a key recommendation of the independent McGregor-Smith Review published in 2017. The results will also show what action employers are taking to prevent bullying and harassment of black, Asian and minority ethnic people in the workplace, and help to establish whether any further action is needed to ensure workplaces are inclusive.

(BEIS, Government review on ethnic minority progression in the workplace, 21.02.18)

IOSCO: Conflicts of interest and associated conduct risks during the equity capital raising process – Consultation

On February 21, 2018 the International Organization of Securities Commissions (IOSCO) launched a consultation on proposed guidance (the Guidance) that aims to address conflicts of interest in the equity capital raising process.

In August 2017, the IOSCO board approved a mandate for Committee 3 on Regulation of Market Intermediaries to examine conflicts of interest and associated conduct risks in the capital raising process. The work to be undertaken under the mandate is divided into two stages. The first stage focuses on the equity capital raising process, which is the subject of this consultation. The second phase will consider conflicts of interest and associated conduct risks during the debt capital raising process. The mandate was a recognition that in some member jurisdictions, notwithstanding existing IOSCO guidance and existing rules, poor conduct practices may still exist, potentially impairing the integrity and efficiency of capital markets.

The consultation paper describes how the role of intermediaries in the equity capital raising process may give rise to conflicts of interest and associated misconduct risks. The proposed Guidance comprises eight measure that are grouped according to the various stages in the capital raising process. Each group of measures addresses the following specific conflicts of interest:

  • Guidance to address conflicts of interest and pressure on analysts during the formative, pre-offering phase of a capital raising;
  • Guidance to address conflicts of interest during the allocation of securities;
  • Guidance to address conflicts of interest in the pricing of securities offerings; and
  • Guidance to address conflicts of interest and conduct risks stemming from personal transactions by staff employed within firms managing a securities offering.

Next steps

IOSCO requests comments on the proposed Guidance in tackling these issues. All comments on the consultation paper should be submitted on or before April 4, 2018.

(IOSCO, Conflicts of interest and associated conduct risks during the equity capital raising process – Consultation paper, 21.02.18)


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Raj Karia

Raj Karia

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Jo Chattle

Jo Chattle

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Jo Chattle

Jo Chattle

London