Takeover Panel: Panel Bulletin 6 - Rule 20.1 and representative directors
On 15 January 2024, the Takeover Panel published a new Panel Bulletin on the application of Rule 20.1 of the Takeover Code (Equality of information to shareholders and persons with information rights) in certain circumstances where a director of the offeree company has been appointed by, or represents the interests of, a shareholder in the offeree company (respectively a representative director and an appointing shareholder).
Panel Bulletin 6 states that in the context of an offer or possible offer, the application of Rule 20.1 must be considered where a representative director has been appointed and:
- the offeree company provides information to the representative director; and
- the representative director (or the offeree company itself) provides information to the appointing shareholder (or to any person within the appointing shareholder's organisation).
If an offeree company has one or more representative directors, the offeree company's advisers should draw the potential application of Rule 20.1 to the provision of information relating to the offer or the offeree company to the offeree board's attention and, in particular, the representative director(s) at the earliest possible opportunity, including where information is shared in the ordinary course in accordance with established practice.
The application of Rule 20.1 should always be considered before any information relating to an offer or the offeree company is provided by a representative director (or the offeree company) to an appointing shareholder (or any other person within the appointing shareholder's organisation).
In addition, advisers to the offeree company should consult the Panel Executive to discuss the application of Rule 20.1 to information relating to an offer or the offeree company provided to any representative directors, including whether it may be appropriate in certain circumstances for the Panel Executive to consent to a derogation from the requirements of Rule 20.1
(Takeover Panel, Panel Bulletin 6 – Rule 20.1 and representative directors, 15.01.2024)
TNFD: Announcement that 320 organisations to start TNFD nature-related corporate reporting
On 16 January 2024, the Taskforce on Nature-related Financial Disclosures (TNFD) announced that 320 organisations from over 46 countries have committed to start making nature-related disclosures based on the TNFD Recommendations published in September 2023.
This first cohort of adopters of the TNFD Recommendations includes publicly listed companies across a variety of jurisdictions (including the UK) and industry sectors, as well asset owners and managers, banks, insurers and other leading market intermediaries such as stock exchanges and audit and accounting firms.
These organisations have announced their intention to begin adopting the TNFD Recommendations and publishing TNFD-aligned disclosures as part of their annual corporate reporting for FY2023, FY2024 or FY2025.
Details of those organisations, their headquarters, their sector and nature and the financial year in which they plan to start making TNFD-aligned disclosures can be accessed from this TNFD webpage.
Parliament: The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024
On 18 January 2024, the Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024 were laid before Parliament, with an Explanatory Memorandum. They were made on 17 January 2024 under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
The Regulations introduce administrative procedures to underpin the Registrar of Companies' ability to remove legal effect material from registers where the interests of either the company concerned or an applicant for removal outweigh those of other parties.
The Regulations also permit the Registrar to choose whether to give people an opportunity to object to the removal of material, reflecting that in some cases it may be appropriate for the Registrar to act swiftly to remove material, e.g. where it is false and its presence on the register is misleading.
In addition, the Regulations empower the Registrar to annotate the registers They add to the Registrar's existing power under company law to place notes in the register to address the misleading or confusing nature of any registered material, with a new power to address any confusion that may arise from the removal of material which the Registrar has subsequently determined was not legally part of the register.
The Regulations also contain provisions (in Part 5) which ensure that it continues to be the case that the usual residential address and the day of the date of birth of a person with significant control over a company cannot be disclosed by the Registrar to a credit reference agency if the person has obtained protection with respect to those sensitive pieces of information under Part 7 of the Register of People with Significant Control Regulations 2016.
The Regulations extend the company law annotation powers and removal provisions to limited liability partnerships.
Similar provisions in relation to the annotation and removal of entries in relation to the register of overseas entities are included in The Register of Overseas Entities (Annotation and Removal) Regulations 2024 which were laid before Parliament at the same time.
The Regulations come into effect as follows:
- Parts 1 to 4 come into force on the day section 85 ECCTA (which extends the Registrar's powers to remove information from the register) comes fully into force; and
- Part 5 comes into force on the day section 52 ECCTA comes fully into force.
(The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024 and Explanatory Memorandum, 18.01.2024)
Parliament: The Register of Overseas Entities (Annotation and Removal) Regulations 2024
On 18 January 2024, the Register of Overseas Entities (Annotation and Removal) Regulations 2024 were laid before Parliament, with an Explanatory Memorandum. They were made on 17 January 2024 under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).
Section 20(2) Economic Crime (Transparency and Enforcement) Act 2022, as amended by the ECCTA, provides the Secretary of State with powers exercisable by regulations to confer on the Registrar of Companies powers to annotate the register of overseas entities, and to remove material from it.
Section 20(2) Economic Crime (Transparency and Enforcement) Act 2022 provides a power to make regulations specifying the circumstances where the Registrar of Companies either may or must annotate the Register of Overseas Entities and the detail any such annotations should contain. Part 2 of these Regulations exercise this power for the first time.
Section 29 of the 2022 Act provided for regulations to be made to establish administrative procedures and requirements around applications to the Registrar to remove from the Register of Overseas Entities material derived from anything invalid or ineffective or done without the authority of the overseas entity, as well as material which is factually inaccurate, or is derived from something that is factually inaccurate, or forged. The ECCTA repeals section 29 and replaces it with a new statutory framework for removal of registered material which mirrors the reformed statutory framework that the ECCTA established for companies in the Companies Act 2006.
Part 3 of the Regulations make provision in connection with removals which mirror those in Part 4 of The Registrar (Annotation, Removal and Disclosure Restrictions) Regulations 2024 made in relation to companies on the same date.
The Regulations come into force on the day section 170 (administrative removal of material from register) ECCTA comes fully into force.
(The Register of Overseas Entities (Annotation and Removal) Regulations 2024 and Explanatory Memorandum, 18.01.2024)
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