Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Global | Publication | September 21, 2018
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The Court of Appeal recently handed down an eagerly awaited decision addressing, in particular, fundamental issues as to the ambit of litigation privilege in investigations.
The appeal, in ENRC v SFO, sought to overturn the High Court’s decision that various communications connected with an internal investigation (including notes of interviews and forensic accounting materials) were not protected by litigation privilege. The High Court had held that litigation privilege did not apply because a Serious Fraud Office investigation was not sufficiently adversarial for the purposes of litigation privilege, it could not be said that litigation was in contemplation, and that even if litigation was in contemplation, the documents were not created for the dominant purpose of use in the litigation.
However, the Court of Appeal reversed the decision in relation to litigation privilege, holding that litigation was in reasonable contemplation from the outset of the investigation and that the materials in question (including interview notes and forensic accounting materials) were created for the dominant purpose of resisting or avoiding contemplated criminal proceedings, and so protected by litigation privilege.
For a detailed briefing which summarises the Court of Appeal’s decision and provides key practical takeaways in relation to the application of privilege to investigations, click here.
(ENRC v SFO [2018] EWCA Civ 2006)
On September 18, 2018 the International Organization of Securities Commissions (IOSCO) published a final report containing guidance to its members on conflicts of interest and associated conduct risks during the equity capital raising process. The report follows a consultation launched on February 21, 2018. The guidance contained in the final report is non-binding, but IOSCO encourages its members to consider the guidance and the extent to which it should be implemented in the context of their legal and regulatory framework.
The guidance takes the form of eight measures, and is broadly in the form set out in the consultation. The measures are as follows:
The guidance is the first stage of IOSCO´s work to examine conflicts of interest and associated conduct risks in the capital raising process, with the second phase considering conflicts of interest and associated conduct risks during the debt capital raising process. IOSCO will consider whether any regulatory response is necessary.
(IOSCO, final report and guidance on conflicts of interest and associated conduct risks – 18.09.18)
On September 17, 2018 the Financial Reporting Council (FRC) published a report which assesses the current extent and manner of reporting by FTSE 350 companies on diversity at board and senior management levels in their annual reports.
Data was collected from the annual reports of FTSE 350 companies published as at March 1, 2018 and the report’s key findings include the following:
The report identifies examples of reporting that lead the way in terms of quality, in some cases providing real insight into the approach of companies. The FRC notes in the report that it is considering the nature and scope of future monitoring against the 2018 UK Corporate Governance Code given that represents a significant increase in emphasis on succession planning and diversity in the management pipeline. It also encourages boards to think beyond gender diversity and to ensure appointment and succession planning practices are designed to promote diversity more broadly.
On September 17, 2018 the London Stock Exchange (LSE) published Notice N15/18. The Notice sets out feedback on the LSE’s consultation on amendments to the Admission and Disclosure Standards contained in Notice N13/18.
The consultation document, which was published on July 10, 2018, set out amendments which will apply to issuers applying to admit depositary receipts, or with depositary receipts admitted, to trading on the Shanghai-London Stock Connect Segment of the Main Market.
The limited response to the consultation has meant that no additional changes are required to the proposed amendments and the changes in the consultation document are to be implemented in full.
The amended Admission and Disclosure Standards are contained in Attachment 1 to the Notice and will come into effect on October 1, 2018.
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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