Corporate Crime Monthly Update September 2016

Welcome to the September 2016 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. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update.

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New SFC guidance on client agreement requirements

In the light of the queries raised by Herbert Smith Freehills following industry consultation, the Securities and Futures Commission (SFC) has issued guidance (FAQs) on the application of new paragraph 6.2(i) of the client agreement requirements under the Code of Conduct for Persons Licensed by or Registered with the SFC (Code), i.e. the mandatory suitability clause (Suitability Clause), to corporate finance mandates.

 The FAQs also deal with the application of the Suitability Clause to client agreements in respect of asset management activities, discretionary investment management services and where certain types of funds are the client, in addition to addressing some procedural matters relating to compliance with the new client agreement requirements more generally.

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Filed under Hong Kong

UAE Cabinet Approves Bankruptcy Law Reforms

The lack of a modern bankruptcy law, and possible criminal prosecution for debt default, has long been a major issue for entrepreneurs in many parts of the Middle East. That may all be about to change in the UAE as the Cabinet has approved a new draft Bankruptcy Law which aims to encourage foreign investment, boost investor confidence and assist SMEs in managing their business operations. That law is expected to be introduced in early 2017.

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Filed under Middle East, UAE

Preparing for the new anti-bribery regime in Korea

In an e-bulletin published in March 2015, we reported that the South Korean National Assembly passed the “Act on the Prohibition of Illegal Solicitations and the Prevention of Conflicts of Interest of Public Officials”. The Act is also known as the “Kim Young-ran Law”.

The Kim Young-ran Law is due to come into force on 28 September 2016 and introduces far-reaching changes to South Korea’s anti-bribery landscape. We summarise the key changes below.

Companies operating or investing in South Korea should ensure they undertake a comprehensive review of their compliance policies to address the requirements of the new law.

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Filed under Asia, Bribery and Corruption, Korea

EU extends the duration of asset freeze in relation to Ukraine’s territorial integrity

On 15 September 2016, the European Council announced that the EU's Russia-related asset freezing measures imposed in relation to Ukraine's territorial integrity, sovereignty and independence (which were previously due to expire on 15 September 2016) will be extended for a further six months until 15 March 2017.  This extension was effected by Council Decision (CFSP) 2016/1671 of 15 September 2016 (the "Decision"), amending Council Decision 2014/145/CFSP. The Decision came into force upon publication in the Official Journal on 16 September 2016.

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Filed under EU, Europe, Russia, Sanctions and Money Laundering, Ukraine

#MAR_bitesize

New Market Abuse powers for the FCA (2)

Powers to require information from issuers, PDMRs and persons closely associated to PDMRs

The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (the "regulations") were passed to ensure that UK law was compatible with the Market Abuse Regulation (MAR), to give effect to those parts of MAR which required implementing legislation, and to ensure it is fully enforceable in the UK. 

This issue of #MAR_bitesize considers the new power to require information from issuers, persons discharging managerial responsibilities within issuers (PDMRs), and persons closely associated to PDMRs under section 122A of FSMA. 

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Filed under Asset management, Banking, FCA, HM Treasury, Insurance, Investigations, Investment banking, Uncategorized

Shenzhen-Hong Kong Stock Connect targeted for launch around November 2016

Following from the launch of Shanghai-Hong Kong Stock Connect (Shanghai-HK SC) in November 2014, the Securities and Futures Commission and the China Securities Regulatory Commission made a joint announcement on 16 August 2016 about their in-principle approval for the establishment of mutual stock market access between Shenzhen and Hong Kong (Shenzhen-Hong Kong Stock Connect (Shenzhen-HK SC)).

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Hong Kong OTC derivatives update: Are you ready for 1 September 2016?

On 1 September 2016, the first phase of mandatory clearing of over-the-counter (OTC) derivative transactions (Phase 1 Clearing) will be implemented. The first transactions to be potentially subject to mandatory clearing will be those entered into on or after 1 July 2017. Also on 1 September 2016, mandatory reporting of OTC derivative transactions will apply to central counterparties (CCPs) which are authorised to provide automated trading services (ATS) for clearing such transactions.

As part of the reform to regulate OTC derivative transactions in Hong Kong, the definition of ATS under the Securities and Futures Ordinance (SFO) will be expanded. As a result, CCPs which currently provide or market clearing services for OTC derivative transactions will need to be authorised as ATS providers under the SFO. The Guidelines for the Regulation of Automated Trading Services (ATS Guidelines) will be amended to reflect these changes. Given the inter-connection between the updated ATS framework and the CCPs' clearing obligations, the revised ATS Guidelines will take effect at the same time as Phase 1 Clearing, on 1 September 2016.

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Filed under Hong Kong

#MAR_bitesize

New Market Abuse powers for the FCA

 

The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016

On 29 June 2016, the Government adopted the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (the "regulations").  This left negligible time for Parliamentary scrutiny before they came into force with the Market Abuse Regulation (EU) 596/2014 ("MAR") on 3 July 2016.

The purpose of the regulations was to amend UK law to ensure its compatibility with MAR, to give effect to those parts of MAR which required implementing legislation, and to ensure it is fully enforceable in the UK.  The regulations amend the Financial Services and Markets Act 2000 (FSMA) and give the Financial Conduct Authority ("FCA") new powers to:

  • require information from issuers and other persons;
  • compel the publication of information by issuers,
  • compel the publication of corrective statements by issuers and other persons;
  • suspend trading in financial instruments; and
  • impose penalties, prohibitions and suspensions or restrictions for contraventions of the market abuse regulation.

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Filed under Estonia, EU, Europe, European Regulation, FCA, France, Germany, Italy, Liechtenstein, UK Regulations, Uncategorized

Herbert Smith Freehills launches new and updated Anti-Bribery Guide to Gifts, Entertainment, Travel and Training across Asia Pacific

Clients operating across Asia Pacific face strict anti-bribery laws often coupled with a cultural tradition of gift giving and relationship building. Our new improved and expanded edition on “Gifts, Entertainment, Travel and Training” is aimed at helping clients navigate the local and international anti-bribery rules relating to the giving of gifts and entertainment. These rules often differ across jurisdictions and our Guide provides helpful guidance on what may or may not be prohibited and what steps can be taken to minimise the risk of falling foul of anti-bribery laws.

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Filed under Asia, Bribery and Corruption