Herbert Smith Freehills recently held its annual disputes client conference exploring some key legal and compliance risks facing major corporates. Following opening remarks by Mark Shillito, head of dispute resolution for the UK and US, there were presentations on cyber security, Brexit, insurance, class actions, decision analysis, privilege and internal investigations.
A summary of the conference from our Litigation team is below – if reading the full version of this post, you can jump down to read more detail on any of the sessions by clicking on the relevant heading.
The two year process of the UK's exit from the EU formally began on 29 March 2017 with notice being given under Article 50 of the Treaty on the European Union of the UK's intention to leave the EU. One of the many legal issues to be determined will be the way in which the UK approaches its international sanctions framework post-Brexit, since the vast majority of the sanctions currently in force in the UK have directly applicable EU Regulations as their basis.
The Government has recently launched a public consultation into the question of the legal powers needed to impose sanctions after Brexit, while a House of Lords enquiry into UK sanctions policy is also underway. What do these two processes tell us about the UK's future sanctions regime?
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The Securities and Futures Commission (SFC) has issued a circular to financial advisers to provide guidance on its expectations as to their role when advising listed companies on corporate transactions (FA circular). The FA circular reminds financial advisers of their obligations under the Corporate Finance Adviser Code of Conduct (CFA Code) and provides specific guidance as to steps financial advisers should take to discharge their obligations. At the same time, the SFC issued a statement to valuers (liability statement) highlighting their potential liability for valuation reports and related information in disclosure documents published by listed issuers. The SFC warns that those who fail to follow the FA circular and liability statement are at greater risk of investigation and regulatory action.
On May 17, 2017, the day on which the US State Department made its semi-annual report to Congress under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA), the State Department announced that the current administration continues to waive sanctions as contemplated by the Joint Comprehensive Plan of Action (JCPOA). Nevertheless, the State Department report condemns Iran as having "compiled one of the world's most egregious records on human rights," and on the same day, the Treasury Department announced new sanctions related to Iran's ballistic missile program, outside of the JCPOA framework. Thus, the actions taken sent a mixed message about the new administration's intentions with respect to the US's Iranian sanctions program.
The Cyberspace Administration of China (CAC) has published its Measures for the Security Assessment for Personal Information and Important Data Exported Abroad (Draft for Comments) (Draft Measures) on 11 April 2017. The Draft Measures, if enacted, will become the first regulation to impose general data localisation obligations in China.
Welcome to the May 2017 edition of our corporate crime update – our round up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions.
The Financial Services and the Treasury Bureau, jointly with the Hong Kong Monetary Authority, the Securities and Futures Commission and the Insurance Authority (together, Authorities) published their conclusions on the consultation relating to the proposed regulations on protected arrangements (PARs) under the Financial Institutions (Resolution) Ordinance (Ordinance) on 6 April 2017.
In 2018, Hong Kong's regime will be subject to mutual evaluation with those of other members of the Financial Action Task Force (FATF). FATF sets international standards for anti-money laundering and counter-terrorist financing regulation and reviews the effectiveness of regulation in member countries. The Government is keen to ensure that Hong Kong's rating is not adversely affected. It is proceeding with proposed changes to bring Hong Kong's regulatory regime in line with FATF’s standards in time for its mutual assessment.
The Government has issued a combined consultation conclusions paper on its two consultation papers issued in January 2017 setting out proposals to (i) enhance the transparency of beneficial ownership of Hong Kong companies and (ii) to extend the customer due diligence (CDD) and relevant record-keeping requirements to designated non-financial businesses and professions (DNFBPs).
Across the board, there was general support for the Government's proposals. Save for some amendments discussed below, the Government is planning to take the proposals forward and introduce amendment bills into the Legislative Council by July 2017.
On 14 March 2017, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) issued OJK Rule No. 7/POJK.04/2017 on registration statement documents in public offerings of equity securities, debt securities or sukuk (“OJK Rule No.7”). OJK rule No.7 replaces Bapepam-LK Rule No. IX.C.1.
The key changes introduced by OJK Rule No.7, more fully summarised in this bulletin from our team in Jakarta and Singapore, include:
No preliminary listing agreement required for OJK submission
Simultaneous process for offering more than one type of securities, and
Simplified legal due diligence.
Filed under Asia, Indonesia
The latest edition of our Market Abuse Update covers developments from the second half of 2016 through to April 2017. It features:
- the latest UK civil and criminal market abuse proceedings;
- significant international developments and enforcement cases;
- the FCA's recent Market Maker Review focusing on market abuse systems and controls;
- an updated list of supplementary EU measures relating to the Market Abuse Regulation 596/2014/EU (MAR).
To read our full briefing please click here.