Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

FCA Publishes Statement Regarding the Requirement for Firms Offering Cryptocurrency Derivatives To Be Authorized

Posted in UK Developments

On April 6, the UK Financial Conduct Authority (FCA) published a statement on the requirement that firms trading in cryptocurrency derivatives may need to be authorized. The statement confirms that performing activities or providing services that amount to regulated activities in relation to derivatives are likely to require FCA authorization when performed in relation to tokens that are issued through an initial coin offering, or cryptocurrencies.

Continue Reading

ESMA Seeks EC Clarification on Ancillary Activity Test Under MiFID II

Posted in EU Developments

The European Securities and Markets Authority (ESMA) published a letter to the European Commission (EC) dated April 9, requesting clarification with respect to the exemption available to non-financial entities (NFEs) from having to be authorized as an investment firm under the revised Markets in Financial Instruments Directive (MiFID II).

Continue Reading

IOSCO Produces CCP Stress Test Framework

Posted in EU Developments

On April 10, the International Organization of Securities Commissions (IOSCO), in conjunction with the Bank for International Settlements’ (BIS) Committee on Payments and Market Infrastructures, published a framework for supervisory stress testing of central counterparties (CCPs) in a single jurisdiction or across multiple jurisdictions. The framework’s focus is stated to be the evaluation of “broad, macro-level impacts across multiple CCPs.”

Continue Reading

ESMA Publishes Updated Double Volume Cap Public Register

Posted in EU Developments

On April 10, the European Securities and Markets Authority (ESMA) published updated results of the double volume cap (DVC) mechanism on its website—for the period of March 1, 2017 to February 28, 2018, and for already published DVCs.

The DVC mechanism is set out in the Markets in Financial Instruments Regulation (MiFIR) and is designed to limit the amount of “dark” trading under certain equity waivers, meaning trading that relies on the reference price waiver and the negotiated transaction waiver to avoid MiFIR transparency requirements.

Continue Reading

Delaware State Bar Association Council Releases Proposed Amendments to the Delaware General Corporation Law

Posted in SEC/Corporate

The Corporate Council of the Corporation Law Section of the Delaware State Bar Association released proposed legislation to amend certain provisions of the Delaware General Corporation Law (DGCL). The proposed amendments are primarily technical and attempt to clarify and resolve certain ambiguities and inconsistencies in the DGCL by, among other changes, (1) further align the merger statutes with the appraisal statute and (2) clarify the manner in which defective corporate acts may be ratified. Continue Reading

ISS Updates Frequently Asked Questions for US Proxy Voting Policies and Procedures for 2018

Posted in SEC/Corporate

On March 29, proxy advisory firm Institutional Shareholder Services (ISS) updated its frequently asked questions (FAQs) for US proxy voting procedures and policies (excluding compensation-related policies and procedures). The following is a brief summary of the new/updated FAQs. Continue Reading

FCA Adopts Senior Managers Regime for Its Own Senior Management

Posted in UK Developments

The UK Financial Conduct Authority (FCA) has published a document setting out its intention to self-apply the principles of the Senior Managers Regime (SMR) to strengthen transparency and “reinforce the standards,” noting that certain differences in the application of the principles are inevitable due to the FCA’s status as a regulatory authority and public body, rather than a regulated firm. However, the document also notes that the FCA will not be implementing the Certification Regime, which, when included with the application of the SMR, is included in the wider regulatory framework of the Senior Managers and Certification Regime (SMCR). Continue Reading

FCA Publishes Changes Affecting Authorized Fund Managers and Proposes Further Changes

Posted in UK Developments

On April 5, the UK Financial Conduct Authority (FCA) published a policy statement with the final rules from its consultation paper 17/18 on asset management market study remedies and changes to the FCA Handbook. The policy statement announces the following prominent changes, among others:

  • Authorized Fund Managers (AFMs) must assess the overall value delivered to investors and publish a description of this assessment in a fund’s annual report (or a separate composite report);
  • “box profits” (i.e., risk-free profits resulting from differences in the bid-offer prices) will need to be paid to the fund or individual investors, as opposed to asset managers retaining these profits, which is currently the case;
  • removing the requirement in the FCA guidance for asset managers to obtain investor consent before “conversion” from more expensive share classes to cheaper, but otherwise identical, share classes; and
  • requiring AFMs to appoint at least two independent directors, comprising at least 25% of total board membership.

Continue Reading

House of Commons Committee Publishes Report on Post-Brexit UK-EU Relationship

Posted in UK Developments

On April 4, the House of Commons Exiting the European Union Committee published a report on the future UK/EU relationship following the United Kingdom’s withdrawal from the European Union. The report examines existing EU relationships with Canada, Ukraine, Switzerland, Norway and Turkey, the impact of trading on World Trade Organization terms (i.e., without a trading agreement in place), and the United Kingdom’s future relationship with the European Union. Continue Reading

FCA Welcomes Agreement on Terms of Brexit Implementation Period; BoE Announces “Dear CEO” Letters and PRA Policy Statements

Posted in UK Developments

On March 28, the UK Financial Conduct Authority (FCA) published a statement on the withdrawal of the United Kingdom from the European Union (Brexit) following UK-EU agreement in relation to aspects of the transition period—notably the end date for the transition period of December 31, 2020. Continue Reading