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M&A hub: Developments driving and shaping M&A
Key legal and regulatory developments driving and shaping M&A
United Kingdom | Publication | March 2023
On March 30, 2023 the Pensions and Lifetime Savings Association (PLSA) published their updated Stewardship and Voting Guidelines.
Key changes from their Voting Guidelines published in 2022 include the following:
On March 30, 2023 the UK Government published an update to its 2019 Green Finance Strategy, setting out its framework for the UK to become the world’s first Net Zero Aligned Financial Centre.
Proposed actions include the following:
(Department for Energy: Mobilising Green Investment – 2023 Green Finance Strategy, 30.03.2023)
On March 24, 2023 HM Treasury and the Financial Conduct Authority (FCA) issued a joint statement following completion of their joint review of the criminal market abuse regime (the Criminal Regime Review). They both committed to the Criminal Regime Review in the Economic Crime Plan 2019-2022 published in July 2019. It has taken place within the wider context of regulatory reforms in financial services, the Future Regulatory Framework (FRF) Review, established to determine how the financial services regulatory framework should adapt to the UK’s new position outside the European Union and how to ensure the framework is fit for the future.
The joint statement points out that the Criminal Regime Review has identified a number of areas where the government believes it would be appropriate to update the criminal market abuse regime, noting that it has already accepted recommendations of the Fair and Effective Markets Review (FEMR) in relation to market abuse, where the government will lay secondary legislation in 2023.
As part of the FRF programme, the Government intends to repeal the retained UK Market Abuse Regulation (UK MAR), the civil market abuse regime, and replace it with UK-specific legislation. A timetable for this will be set out in due course.
The joint statement comments that the government will consider changes to the criminal market abuse regime alongside any reforms to UK MAR through the FRF Review and will therefore consider how to take forward the recommendations from the Criminal Regime Review at that point.
(HM Treasury and FCA, Joint statement on the criminal market abuse regime, 24.03.2023)
On March 27, 2023 the Financial Reporting Council (FRC) published its latest 3-Year Plan outlining its priorities and objectives for the period 2023-2026.
One section of the 3-Year Plan focuses on the transition from the FRC to the Audit, Reporting and Governance Authority (ARGA). The FRC’s 2022-25 Plan was based on the planning assumption that ARGA would be created via legislation, with a start date of April 2023. However, after that Plan was published, it became clear that the ARGA Bill would not receive Parliamentary time in the third session. The FRC notes that in the continued absence of a firm legislative timetable, it pushed its planning assumption back by one year to April 2024 and although changes to the Parliamentary timetable have now cast some doubt over this date, the FRC has decided to retain the 2024 assumption for the purposes of this Plan, whilst acknowledging the continued uncertainty around timing of legislation. When the timetable becomes clearer, the FRC says that it will communicate any changes in its planning assumptions to its stakeholders.
As a result of this, the FRC has re-prioritised its work, focusing on the changes it can make using its existing powers and remit. As an example, the FRC points out that in November 2022 it issued a consultation on a draft Minimum Standard for Audit Committees. When published in 2023, FTSE 350 audit committees will be able to adopt the standard on a voluntary basis before it becomes mandatory and the FRC starts to supervise it when ARGA is created. The FRC also notes that 2023 will see the first revisions to the UK Corporate Governance Code since 2018.
(FRC, 3-Year Plan 2023-2026, 27.03.2023)
Publication
Key legal and regulatory developments driving and shaping M&A
Publication
On February 2, 2024, the Belgian Presidency of the Council of the European Union confirmed that the Committee of Permanent Representatives had signed the Artificial Intelligence (AI) Regulation, referred to as the AI Act. Approval by the EU Parliament followed on 13 March 2024, and the AI Act is likely to appear in the EU’s Official Journal around May 2024. The AI Act aims to establish a stringent legal framework governing the development, marketing, and utilisation of artificial intelligence within the region, thereby marking a significant advancement in the regulation of this burgeoning domain.
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The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
Publication
The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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