On 30 March 2023, on what has been called the UK’s “green day”, the UK government announced a series of policies and proposals that it hopes will form the backbone of its strategy to drive investment into green energy with a view to achieving energy security and meeting the target of net zero greenhouse gas emissions by 2050.
On 29 March 2023, FCA Chief Executive Nikhil Rathi delivered a speech at the Global Investment Management Summit on the topic “Reforming our capital markets ecosystem”.
He announced that the FCA will soon publish a blueprint for further reform of the UK listing regime in which the current standard and premium listing segments for shares in commercial companies would be replaced with a single listing category with a single set of requirements.
The UK government has published a White Paper which outlines its plans to establish a new statutory independent regulator (the Regulator) for English men’s elite football. The White Paper follows the previously published “Fan-Led Review of Football Governance”, led by Tracey Crouch CBE MP, and the government’s response to the proposed European Super League.
The White Paper raises a number of questions for football’s key stakeholders, including fans, clubs, the Premier League, the Football Association (FA), the English Football League (EFL), and others with interests (financial or otherwise) in and around the sport.
The Digital Services Act (DSA) is a key part of the EU’s digital regulation strategy, which seeks to modernise legal frameworks and create a safer and more open digital environment.
The DSA entered into force on 16 November 2022. A number of provisions took effect on this date (including the obligation on online platforms to publish transparency reports), though the majority of the operative provisions will not take effect until 17 February 2024.
The DSA has a broad scope and regulates many aspects of digital services, including liability for online content and services, targeted advertising, know your business customer requirements, transparency for users, and managing systemic platform risks.
In this article, Latham lawyers explain how the various requirements of the DSA apply to the range of online services in scope and provide practical guidance on the implications of the DSA for providers of those online services.
Certain shareholders of McDonald’s Corporation (the Company) sued David Fairhurst, the Company’s former executive vice president and global chief people officer, on behalf of the Company for allegedly breaching his duty of oversight “by allowing a corporate culture to develop that condoned sexual harassment and misconduct” and for “consciously ignoring related red flags”.
In the recent ruling in the matter of In Re McDonalds Corporation Stockholder Derivative Litigation, the Delaware Court of Chancery denied Fairhurst’s motion to dismiss the lawsuit. The court held that corporate officers, like directors, owe shareholders a fiduciary duty of oversight to report upward to more senior officers or to the board credible information that a company may be violating the law, and to not consciously ignore red flags. (Read this Latham Client Alert for more on the decision.)
On 20 January 2023, the High Court ruled against human rights campaigners who argued that UK authorities were improperly allowing the import of cotton textiles made in Xinjiang, a region of China associated with alleged human rights abuses against the Uyghur people. Approximately 85% of Chinese cotton is grown in the Xinjiang Uyghur Autonomous Region (XUAR), with the “vast majority” of cotton alleged to have been produced in facilities under conditions of “detention and prison labour”.
Whilst global M&A deal volumes have dipped at the start of Q1 2023, UK-bound M&A activity is expected to be one of the year’s highlights as overseas buyers seek out attractively priced British public and private targets. Within this activity, the deal term preferences of US buyers are likely to impact private UK M&A. A detailed understanding of both UK and US expectations is therefore essential for transatlantic dealmakers.
US private M&A deal terms — particularly related to deal certainty and post-closing recourse — have historically been viewed as more buyer-friendly than those in the more seller-friendly UK market. However, the picture is increasingly nuanced, and deal teams navigating ongoing economic uncertainty and financial market dislocation are being called upon to find new solutions to deal valuation, certainty, and recourse concerns.
On 10 February 2023, the FCA published DP23/1: Finance for positive sustainable change: governance, incentives and competence in regulated firms.
The FCA considers that a firm’s governance, purpose, and culture are central to how it embeds environmental and social considerations into business, risk, and capital allocation decisions for the benefit of consumers. With this in mind, the FCA is seeking views on how it can move effectively beyond disclosure-based initiatives to help and encourage firms as they develop their arrangements for governance, incentives, and competence in the area of sustainability.
On 14 February 2023, HM Treasury published its consultation and accompanying draft legislation on the regulation of buy-now-pay-later (BNPL) lending. The consultation follows the proposals in HM Treasury’s prior publications released in October 2021 and June 2022, since the government announced its intention to bring currently unregulated BNPL products within scope of the regulatory perimeter. This latest consultation provides some welcome clarity on the approach to this upcoming sea change for firms operating in the BNPL space.
The key changes will be effected by amending the current fixed-sum interest-free credit exemption in Article 60F(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). BNPL lending usually falls within this exemption as such agreements meet the conditions as interest-free loans repayable in under 12 months and in 12 or fewer instalments. Article 60F(3), which provides an exemption for running-account credit, will remain unchanged.
On 3 February 2023, the FCA published Dear CEO/Director letters underscoring the immediate (i.e., during the implementation period up until 31 July 2023) and longer-term expectations, priorities, and demands under the Consumer Duty. For further information, see Latham’s recent blog on the FCA’s multi-firm review summarising areas of improvement for firms’ implementation plans.