New EU Medical Devices Regulation to Be Postponed Until 2021

By Latham & Watkins on April 7, 2020 Posted in Life Sciences

European Commission proposes one-year postponement in light of the COVID-19 crisis.

By Frances Stocks Allen and Oliver Mobasser

On 25 March 2020, the European Commission announced that it was working on a proposal to postpone the date of application for the new EU Medical Devices Regulation (MDR)[i] for one year, in light of the COVID-19 crisis. The MDR had been due to become fully active on 26 May 2020.

The Commission’s Directorate-General for Health and Food Safety noted in a press release that the Commission was working to submit this proposal in early April, for swift adoption by the European Parliament and the European Council. The proposed postponement aims to relieve pressure on national authorities, notified bodies, manufacturers, and others, allowing them to focus fully on urgent COVID-19-related priorities. Continue Reading

Credit Insights – Finding Liquidity Under Loan and Bond Documents

By Latham & Watkins on April 6, 2020 Posted in Finance and Capital Markets

To raise new debt at a time of low liquidity, leveraged and other sub investment grade companies must navigate restrictions in loan and bond documents.

By James Chesterman, Helena Potts, James P. Burnett, and Karan Chopra

Many companies are seeking funding to survive the currently unquantifiable impact of COVID-19. This blog post will consider issues arising in leveraged and other sub-investment grade structures from which all commitments are drawn, or are otherwise not available for drawing, and therefore new funding sources are required. In these structures, contractual restrictions and high leverage can make it harder to accommodate new debt. Continue Reading

Changes to Reporting Requirements for Issuers in Light of COVID-19

By Latham & Watkins LLP on March 27, 2020 Posted in Finance and Capital Markets

UK regulators announce a further package of measures to ease the burden on issuers.

By Chris Horton, James Inness, Rob Moulton, Koushik Prasad, Connor Cahalane, and Charlotte Collins

In response to the COVID-19 pandemic, UK regulators have published further measures affecting issuers, to try to preserve the flow of information to investors and support the continued functioning of the UK’s capital markets. However, the FCA has also noted that issuers will still need to observe their other disclosure obligations, in particular those concerning inside information under the Market Abuse Regulation.

Italian Government Amends List of Essential Activities Annexed to the D.P.C.M.

By Latham & Watkins LLP on March 26, 2020 Posted in EU and Competition

D.P.C.M. now includes measures for certain manufacturing industries, as well as call centres and civil engineering works, but excludes employment agencies.

By Giancarlo D’Ambrosio and Giovanni B. Sandicchi

By decree of the Ministry of Economic Development, adopted yesterday and in force since today, March, 26, 2020, several amendments have been made to the list annexed to the D.P.C.M. of March 22, 2020.

Specifically, from March 28 to April 3, the suspension of activities comes into force for the manufacture of machinery for the agricultural industry, for the food, beverage, and tobacco industries, and for rubber articles, production of strings, cables, ropes, and netting. Restrictions will also be imposed on the activities of call centres, manufacturing of plastic products, wood packaging, paper products, chemicals, as well as civil engineering works.

The updated list of essential activities that are not suspended now includes, the manufacture of glass packaging for food, the production of batteries, electric batteries, and accumulators, and the activities of employment agencies.

Companies that had not been suspended as a result of the Prime Ministerial Decree of March 22, but will now have to suspend their activities, will be allowed to complete the activities necessary for the suspension — including the shipment of goods in stock — before March 28.

Italy Extends Disclosure Deadline for Intermediaries and Online Portals

By Latham & Watkins LLP on March 26, 2020 Posted in Finance and Capital Markets

CONSOB and Bank of Italy ease compliance obligations during COVID-19.

By Antonio Coletti, Marco Bonasso, and Isabella Porchia

The Italian Securities Commission (CONSOB) and the Bank of Italy have adopted a series of measures to grant intermediaries and online portal managers an extended deadline to comply with their disclosure obligations, and facilitated compliance activities by banks and supervised non-bank intermediaries, due to restrictions imposed by government measures to face the COVID-19 emergency.

Under resolutions no. 21314 and 21315 of March 25, 2020, CONSOB granted a 60-day extension for the terms relating to:

Intermediaries sending reports on how to perform services and reports on the organizational structure of SGR (asset management company), SICAF (fixed capital investment company), and SICAV (variable capital investment company)
Online portal managers sending data and news and transmitting documents to CONSOB, according to the regulation on raising funds through online portals

Credit Insights – What Borrowers and Lenders Should Know About MACs During COVID

By Latham & Watkins LLP on March 25, 2020 Posted in Finance and Capital Markets

Material adverse change provisions in credit agreements are under much heightened scrutiny in the current circumstances.

By James Chesterman and Helena Potts

In the current environment, both corporates and their lenders are trying to assess a fast-moving situation. Businesses are suspending operations, countries are limiting travel and non-essential activities, events are being cancelled and consumers are in actual or semi-lockdown.

At present, credit arrangements are an important source of cash for companies, and continuation of trade is a function of continued access of those credit lines. An absence of liquidity may force a board of directors to consider whether a company can continue to trade as a going concern in many jurisdictions. In many cases, this consideration involves an assessment of access to available lines of liquidity and credit, as well as a company’s ability to continue to meet its ongoing payment obligations.

Italian Government Suspends Non-Essential Industrial and Commercial Production Activities

By Latham & Watkins LLP on March 23, 2020 Posted in EU and Competition

The new decree imposes measures in effect from today until April 3, 2020 to combat the spread of COVID-19.

By Giancarlo D’Ambrosio and Giovanni B. Sandicchi

Yesterday evening, the Italian government adopted a new decree (D.P.C.M. of March 22, 2020), which suspends, as of today, non-essential industrial and commercial production activities throughout the country to contain the spread of COVID-19.

Among the provisions of the Decree, the following are particularly noteworthy:

i. All industrial and commercial production activities are suspended, with the exception of those providing public utilities and essential services, as well as a series of activities considered essential and contained in a list reported under Annex 1 of the Decree, which may be supplemented by subsequent decrees. The list includes, among other activities, the entire beverage and food supply chain, the pharmaceutical healthcare devices industry, strategic industries, and related production chains. In addition, the functional activities to ensure the continuity of the authorized supply chains will also remain open, subject to notification to the Prefect of the province where the production unit is located.

ii. Functional activities to deal with the emergency are permitted, including those relating to the production, transport, marketing, and delivery of medicines, health technology, and medical-surgical devices, as well as agricultural and food products. Continue Reading

UK Digital Services Tax: 1 April Brings New Tax on Global Digital Businesses

By Latham & Watkins on March 20, 2020 Posted in Finance and Capital Markets

Following the publication of the Finance Bill 2020 the UK government is pressing ahead with the introduction of the Digital Services Tax from 1 April 2020.

By Sean Finn, Karl Mah, Aaron Bradley, and Amy F. Watkins

From 1 April 2020 the UK government is introducing a new tax in the form of the Digital Services Tax (DST). The DST is the UK’s unilateral attempt to correct the misalignment between the place where businesses’ profits are taxed and the place where those businesses create value.

Following on from the base erosion and profit shifting (BEPS) project, the Organisation for Economic Co-operation and Development (the OECD) has been exploring potential new taxing rights to seek to correct such misalignment. The UK government has said that it will converge its approach with the long term international solution once agreement has been reached on the basis that it believes in international co-operation regarding the future of tax on large international businesses. The UK government plans to review the progress made in international discussions in 2025. Continue Reading

Italian COVID-19 Law Decree Suspends Terms of All Administrative Procedures

By Latham & Watkins LLP on March 19, 2020 Posted in Employment and Benefits

The Cura Italia Decree also extends the validity of administrative authorizations.

By Cesare Milani

On March 17, 2020, the Italian government adopted Law Decree No. 18/2020 (the Cura Italia Decree), providing for a contingency package of extraordinary measures to strengthen the national health service and provide financial and economic support to families, workers, and companies facing the pandemic.

The Cura Italia Decree entered into force on March 17, 2020, and shall be converted into law, following potential amendments, within 60 days from its adoption.

From a public law perspective, the Cura Italia Decree sets forth the following key measures:

CONSOB Imposes Stricter Reporting Requirements of Relevant Shareholdings in Certain Italian-listed Issuers

By Latham & Watkins on March 18, 2020 Posted in Finance and Capital Markets

Italian regulator imposes more stringent reporting obligations for certain Italian-listed issuers.

By Antonio Coletti and Isabella Porchia

The Italian Securities Commission (CONSOB) has adopted Resolution 21304, imposing stricter reporting obligations of relevant shareholdings in Italian-listed issuers included in the Annex to the Resolution.

The entry threshold of relevant shareholding to be reported, according to Italian law implementing the EU Transparency Directive (article 120 of Legislative Decree 58/1998), is lowered:

From 3% to 1% for 38 companies with equity listed on the Mercato Telematico Azionario included in Section A of the Annex. The regulator has selected these companies based on capitalisation higher than €500 million and spread ownership structure.
From 5% to 3% for 10 SMEs included in Section B of the Annex.