Publication
Ireland
On 31 October 2023, the Screening of Third Country Transactions Act 2023 (the “Act”), which establishes a new foreign direct investment ("FDI") screening regime in Ireland, was enacted.
Global | Publication | May 2022
The Queen’s Speech was delivered on May 10, 2022 and it sets out the programme of legislation that the Government intend to pursue in the forthcoming parliamentary session.
Particular Bills with corporate implications that were announced include the following:
The accompanying background briefing notes state that the key elements of the Bill will be as follows:
The accompanying background briefing notes state that the key elements of the Bill will be as follows:
The accompanying background briefing notes state that the key elements of the Bill will include the following:
The accompanying background briefing notes state that the key elements of the Bill will be as follows:
The accompanying background briefing notes state that the key elements of the Bill will be as follows:
The briefing notes comment that many of the recommendations to the Government on audit and corporate reporting made by three independent reviews undertaken by Sir John Kingman, Sir Donald Brydon and the Competition and Markets Authority, require primary legislation and will be taken forward in this Bill. They also state that the Government’s response to the consultation on its White Paper, Restoring trust in audit and corporate governance, will be published shortly.
(Prime Minister’s Office, Queen’s Speech 2022, 10.05.2022)
(Prime Minister’s Office, Queen’s Speech 2022: Background briefing notes, 10.05.2022)
On May 11, 2022 the London Stock Exchange (LSE) published a consultation document relating to the creation of a new Voluntary Carbon Market and amendments to its Admission and Disclosure Standards (Standards). This follows an announcement by the LSE at COP26 that it would be developing a market offering to support publicly traded carbon funds and an announcement in November 2021 that the LSE was developing a new market solution to accelerate the availability of financing for projects that will support a just transition to a low-carbon economy. The goal would be to address two major challenges: access to capital at scale for the development of new climate projects worldwide; and primary market access to a long-term supply of high-quality carbon credits for corporates and investors.
Part A of the consultation document sets out proposals for the Voluntary Carbon Market. The Voluntary Carbon Market designation aims to provide greater transparency to attract capital for Carbon Credit projects. The requirements for the designation, and the enhanced disclosure proposed in the consultation document, are designed to inform investors of specific information relating to a Fund’s carbon reduction and/or removal projects. The proposed rules for the Voluntary Carbon Market will be set out in a new Schedule 8 to the Standards and key features proposed include the following:
Initially the Voluntary Carbon Market designation will only be open to closed-ended investment funds, but the LSE will consider other asset classes in the future. The Fund must be admitted to trading on the Main Market or AIM and its portfolio management must be conducted by a person authorised by the FCA, the Jersey, Guernsey or Isle of Man regulatory bodies to manage an unauthorised Alternative Investment Fund.
A Fund’s investment strategy should have a focus on investing in carbon reduction and/or removal projects that are expected to yield Carbon Credits. The Fund will be required to make investments in keeping with the low-carbon transition principles across the remainder of its portfolio and, accordingly, revenues from its other investments must be able to be mapped to the Tier 1 or Tier 2 micro sectors within FTSE Russell’s Green Revenues Classification System. So as to ensure commitment to climate change mitigation, the Fund must make investment in at least one Proposed Project (a project in which the Fund is investing with the reasonable expectation that it is, or will be, a Qualifying Project) or Qualifying Project (a project which has been independently certified and appears on the register of the relevant qualifying body) within three years of receipt of the Voluntary Carbon Market designation.
In order for the Voluntary Carbon Market designation to provide transparency regarding the quality of the Carbon Credits, it is proposed that the Proposed Projects or Qualifying Projects are registered with one of the following recognised bodies: The International Carbon Reduction & Offset Alliance (ICROA), which includes the UK Woodland Carbon Code, Gold Standard, Verra’s Verified Carbon Standard and others; or the Integrity Council for the Voluntary Carbon Market (ICVCM) (once its Core Carbon Principles are issued).
The Fund will have full autonomy in determining how it proposes to deliver or retire Carbon Credits and will be required to disclose this to shareholders. Options available to Funds include delivery as a dividend in specie or a Fund may elect to retire Carbon Credits on behalf of shareholders and maintain a Registry. The Fund will also need to consider the management of fractional entitlements.
The FCA’s Prospectus Rules and the AIM Rules for Companies specify the content of a prospectus and AIM admission documents, respectively. However, in addition to the Fund’s existing disclosure requirements, to aide transparency, it is proposed that content that is specific to the Voluntary Carbon Market will additionally required to be included in the Fund’s Prospectus, AIM admission document or Designation Circular (where a Fund is applying for the Voluntary Carbon Market designation after admission, it must issue a Designation Circular to shareholders), as the case may be.
While Funds with the Voluntary Carbon Market designation will continue to have to comply with the ongoing disclosure requirements as set out in the DTRs, the Listing Rules, the AIM Rules for Companies and the UK Market Abuse Regulation, as relevant, it is proposed that the Fund will also be required to provide ongoing disclosure which is specific to the Voluntary Carbon Market designation. In particular, it is proposed that disclosure will be required in the Fund’s audited annual report and financial statements on matters relevant to achieving Carbon Credits, such as updates on key project milestones and the target yield of Carbon Credits and the general status of investments into Qualifying Projects and Proposed Projects.
The LSE will have powers to refuse or delay provision of, impose conditions to, or remove the Voluntary Carbon Market designation.
Part B of the consultation document sets out other proposed amendments tio the Standards. For example, the early notification process is being expanded to cover all new securities, not just equity and depositary receipt securities. In addition, the early notification date for certain issuers is being increased to 30 business days, and for debt issuers, five business days, prior to admission. Overarching confidentiality, refusal powers and jurisdiction provisions are being included, as well as certain administrative and corrective changes.
The proposed amendments to the Standards, covering the amendments set out in Parts A and B of the consultation document, are set out in track changes in an attachment to the consultation document.
Comments are invited by close of business on July 11, 2022. The LSE expects to confirm the final rules on or around the end of September 2022.
The Transition Plan Taskforce (TPT) was launched in April 2022 by HM Treasury with a two year mandate to develop a gold standard for transition plans so as to help drive decarbonisation by providing a framework and benchmark that helps financial institutions and companies to prepare rigorous transition plans. These plans will specify how entities can support the UK’s net zero transition, through disclosures on how they will achieve pledged targets and support economy-wide decarbonisation. As part of this, on May 11, 2022 the TPT published a Call for Evidence which sets out the overall direction of travel of the TPT in preparing a Sector-Neutral Framework to enable companies across all sectors to develop standardised and meaningful plans to support the transition of the economy to net zero, and asking for stakeholder input to inform the TPT’s future work on this.
As well as developing a Sector-Neutral Framework, the TPT will develop Sectoral Templates and accompanying guidance for private sector transition plans.
The Government published its Greening Finance Roadmap in October 2021, committing to take action to help align UK financial flows with a net zero carbon economy. Part of this strategy involves the development of new Sustainability Disclosure Requirements (SDR), which will introduce requirements for disclosures on sustainability across the economy. Under new requirements in the Listing Rules introduced by the Financial Conduct Authority (FCA) from the start of 2022, listed companies and large regulated asset owners and asset managers must disclose climate transition plans as part of their Task Force on Climate-Related Financial Disclosures (TCFD)-aligned climate disclosures, on a comply or explain basis.
At COP26, the Government confirmed that, as part of the new SDR rules, further steps would be taken to require the disclosure of climate transition plans. Since there is currently no commonly agreed definition or common standard for transition plan disclosures, in November 2021, the Government announced that it would establish the TPT to develop a gold standard for transition plans. The FCA will be actively involved and draw on the TPT’s work to strengthen transition plan disclosure rules for listed companies and financial institutions.
The Sector-Neutral Framework will be directed at companies in the UK across all sectors. It will address how companies should disclose information on their strategies and action plans for meeting declared commitments and accelerating the transition to a net zero and resilient economy.
The Sector-Neutral Framework will lay out:
Views are sought on the location of transition plan disclosures. For example, they could be integrated into existing annual financial disclosures, form part of standalone sustainability reports, be disclosed as a standalone strategy document or be disclosed in full as a standalone strategy document, but with high-level elements also appearing as part of the strategy disclosure in the annual financial report.
Views are also sought on issues such as how prescriptive the Sector-Neutral Framework should be, recognising the need to balance flexibility in how firms disclose transition plans with more prescriptive templates that seek to facilitate comparability of firms’ transition plans, and whether the TPT should seek to standardise the data and metrics used to communicate ambition and measure progress in transition plans.
The TPT seeks views on three guiding principles which will guide preparers to disclose relevant information in a plan, as well as provide a reference point for users seeking to understand the credibility of plans, as follows:
In the Sector-Neutral Framework, the TPT plans to create guidance on the key elements that any private sector transition plan should cover, regardless of the sector of the preparing organisation. Table 2 in the Call for Evidence summarises common elements found in existing frameworks and plans and the TPT seeks feedback on the proposed list which distinguishes between elements and sub-elements. Elements are considered to be the core building blocks of transition plans, with sub-elements being those which add credibility and granularity to each element.
Responses to the Call for Evidence are requested by July 13, 2022. The TPT will then develop the Sector-Neutral Framework throughout 2022. It is intended that a draft will be published for consultation towards the end of the year with a view to finalisation in early 2023.
(TPT, A Sector-Neutral Framework for private sector transition plans Call for Evidence, 11.05.2022)
On May 11, 2022 the Department for Business, Energy and Industrial Strategy (BEIS) published a Call for Evidence to support its update of the Green Finance Strategy it published in July 2019.
The 2019 Green Finance Strategy had three objectives:
Since it was published, a number of steps have been taken to achieve these objectives, including the UK becoming the first G20 country to mandate Taskforce on Climate-Related Financial Disclosures (TCFD) across the economy, and setting out a roadmap for broader economy-wide Sustainable Disclosure Requirements. The updated Green Finance Strategy will take stock of progress so far and set out how the UK can better ensure the financial services industry is supporting the UK’s energy security, climate and environmental objectives.
The questions in the Call for Evidence are concerned with four key objectives:
Responses to the Call for Evidence are requested by June 22, 2022 and the update to the Green Finance Strategy is planned for publication in late 2022.
(BEIS, Update to Green Finance Strategy – Call for Evidence, 11.05.2022)
Publication
On 31 October 2023, the Screening of Third Country Transactions Act 2023 (the “Act”), which establishes a new foreign direct investment ("FDI") screening regime in Ireland, was enacted.
Publication
On 26 July 2024, the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) jointly released revised rules in respect of the investments into China’s financial market through the Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor (collectively, QFII) regime (the New Rules).
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