Publication
Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
United Kingdom | Publication | October 2020
On October 16, 2020 the London Stock Exchange (LSE) published Market Notice N16/20 withdrawing the temporary measures that were put in place in March 2020 in N07/20 in relation to payment dates under the LSE’s Dividend Procedure Timetable in light of the challenges and uncertainties caused by COVID-19.
The temporary measures permitted the deferral of dividend payments but are being withdrawn from November 2, 2020. After that date, issuers announcing cash dividends need to revert to the standard 30 business day period from the record date within which the dividend should be paid.
The Market Notice also states that the Dividend Procedure Timetable for 2021 has been published.
(LSE, N16/20 - Dividend Procedure Timetable – Coronavirus (COVID-19), 16.10.2020)
On October 21, 2020, the Financial Reporting Council (FRC) published the results of its review of 216 sets of company accounts in the last year, including the “top ten” areas where improvements to reporting quality are needed so users of accounts have a clearer understanding of company performance and position. The FRC notes that this will be particularly relevant for future reporting when companies have to explain the effects of the COVID-19 pandemic.
The report sets out the FRC’s views on the current state of reporting in the UK, what makes for better quality reporting and where it sees shortcomings requiring improvements. Case studies and disclosure examples are provided to illustrate key findings, areas for improvement and better disclosure examples.
The ten topics raised most frequently with companies are considered in detail in the report and are as follows:
The FRC’s priorities in monitoring annual reports and accounts prepared in 2020/21 will focus on the following:
(FRC, Annual review of corporate reporting 2019/20, 21.10.2020)
The Financial Services Bill 2019-21 was introduced to Parliament on October 21, 2020. It aims to ensure that the UK’s regulatory framework continues to function effectively after the UK leaves the EU. As a result, it includes, among other things, amendments to the version of the EU Market Abuse Regulation that will form part of retained EU law after the end of the transition period and so continue to apply in the UK (UK MAR).
The changes to UK MAR made by the Bill are as follows:
In addition, the maximum criminal sentence for market abuse is being extended from seven years to ten years as a result of amendments made by the Bill to the Criminal Justice Act 1993 and the Financial Services Act 2012.
The date for the second reading of the FS Bill has not yet been announced.
(Parliament, Financial Services Bill 2019021, 20.10.2020)
(Parliament, Explanatory Notes to Financial Services Bill 2019-21, 20.10.2020)
On October 17, 2020, the Investment Association announced in a press release that significant progress has been made in bringing executive pension contributions in line with those received by the majority of the workforce, as requested by investors. As well as providing statistics in relation to this, the press release also looks at the issues and resolutions which have resulted in FTSE All-Share companies being added in 2020 to the Investment Association’s Public Register which tracks votes of 20 per cent or more against a particular resolution at a shareholder meeting.
So far as pension contributions are concerned:
In relation to the Public Register, fewer FTSE All-Share companies were added to it in 2020 than in 2019. Executive pay and director re-elections saw the greatest number of shareholder votes against though almost 90 per cent of those companies added to the Public Register made a public statement on how they would respond to the dissent.
(Investment Association, FTSE 100 cut executive pensions under shareholder pressure, 17.10,2020)
On October 19, 2020 the Financial Reporting Council (FRC) published amendments to FRS 104 in light of inconsistencies between the requirements for assessing and reporting on the going concern basis of accounting when preparing interim financial reports in accordance with EU-adopted IFRS and FRS 104 Interim Financial Reporting.
While FRS 104 is based on the requirements of IAS 34 Interim Financial Reporting, it was brought to the FRC’s attention that FRS 104 did not contain requirements explicitly covering the need for management to assess the entity’s ability to continue as a going concern and disclose any related material uncertainties when preparing interim financial statements. The amendments to FRS 104 introduce requirements covering going concern in a similar way to EU-adopted IFRS so as to ensure consistency between interim financial reports prepared in accordance with IAS 34 and FRS 104.
The effective date for these amendments is interim periods beginning on or after January 1, 2021, with early application permitted.
(FRC, Amendments to FRS 104 Interim Financial Reporting – Going concern, 19.10.2020)
Publication
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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.
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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