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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)
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Key legal and regulatory developments driving and shaping M&A
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The Energy Performance of Buildings Directive (the Recast EPBD) entered into force on 28 May 2024. The Recast EPBD repeals the Energy Performance of Buildings Directive 2010 (the Repealed EPBD). The Repealed EPBD will remain as transposed in the laws of England and Wales, and the Recast EPDB will only be transposed into the national legislation of EU Member States. The overarching aims of the revisions set out in the Recast EPBD reflect the common themes of European climate legislation to speed up the transition to renewables and rapidly reduce energy consumption. We set out below a summary of the key provisions under the Recast EPBD, when the provisions take effect and a comparison with the Repealed EPBD.
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In the last roundtable we partnered with Sarah Thwaites to talk about managing your team through change and how to engage your stakeholders to adopt the change.
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On 21 May 2024, the European Council (or Council) adopted the so-called ‘Hydrogen and decarbonised gas market package’ (the Gas Package). The package contains a recast of the 715/2009 gas regulation (Gas Regulation) and a recast of the 2009/73 gas directive (Gas Directive) aimed at reforming the existing EU regulatory framework to support the deployment of renewable and low-carbon gases, in particular hydrogen. As such, it represents a major development in the EU gas market.
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