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In Brief

April 2011

With the publication of guidelines on the Bribery Act, Australian and other overseas corporations with a business in the UK have under three months to put in place polices and procedures to comply with the new act.

The planned implementation of the Bribery Act was delayed late last year following concerted lobbying by business groups that the offence of failing to prevent bribery lacked clarity and was broad in scope. There was particular disquiet about the potential liability for actions of joint venture partners and members of consortia. The status of corporate hospitality was also an area of concern. 

The Secretary of State is required by the Act to issue statutory guidance about procedures that commercial organisations can put in place to prevent associated persons from bribing others. This statutory guidance has now been issued and shows some amendments from the draft guidance. A Government commitment was been made to allow a three month period between the issuance of the guidance and the Act coming into force to allow businesses sufficient time to prepare; publication of the guidance thus starts the clock for implementation on 1 July 2011.

Read our client alert for more detail and for further information and background on this topic, click on the following earlier Mallesons client alerts:

Government to revise law in relation to registration of company charges

Draft regulations will be published early this year for implementation in 2012/13 to streamline and unify the registration of charges in the UK.  The key changes will be:

  • The law will apply to all UK registered companies and limited liability partnership but not to overseas companies, even if they have a UK place of business (so charges created by non-UK registered companies will not be registrable regardless of where the assets are situated);
  • All mortgages and charges will be registrable unless specifically excluded.  There will be no requirement to register the crystallisation of a floating charge,
  • Charges will be registered electronically, with an extract from the charge instrument being placed on the public record.

UK Takeover Code reforms

On 21 March 2011 the UK Takeovers Panel released its anticipated consultation paper on the changes it proposes to make to the UK Takeover Code in the wake of Kraft’s hostile takeover bid for Cadbury.  

The proposed changes include prohibiting deal protection measures (including break fees) and strengthening the “put-up-or-shut-up” provisions.  The changes will affect all bidders for UK companies subject to the UK Takeover Code and, in particular, private equity and other leveraged bids.

The reforms will have resonance in Australian policy debates on takeovers regulation in Australia of years gone by, and also through the inevitable influence of international practice on Australian market practice.  However, the reforms will move the UK takeovers regime further away from Australia’s as we do not anticipate that Australia will follow much of the UK lead.   Read our client alert for more detail:

UK Panel - Takeover Code Reforms March 2011

Corporate Governance

On 5 April 2011 the European Commission published a Green Paper on corporate governance in Europe which launches a public consultation on possible ways forward to improve existing corporate governance mechanisms.  The Green Paper contains three chapters: boards, shareholders and the comply-or-explain principle.  The questions on which it is seeking responses include:

  • Should listed companies be required to ensure a better gender balance on boards?  If so, how? (question 6)
  • Should it be mandatory to put the remuneration policy and the remuneration report to a vote by shareholders? (question 10)

We propose to report on the Green Paper in more detail next time.

Revision of the Brussels Regulation on jurisdiction and the recognition and enforcement of judgments

The European Commission recently published a proposal to reform of the Brussels Regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.  The proposal will not automatically apply to the UK unless the UK opts into the new Regulation, so the UK Government (Ministry of Justice) is consulting on the proposal. 

The most controversial aspect is the proposal to extend the jurisdiction rules in the Regulation so that (except where specific rules apply eg in relation to employees or insurance disputes) the new Regulation would replace existing national jurisdiction rules as to when courts can assert jurisdiction over non-EU defendants.

In the UK the loss of existing national laws would potentially mean that:

  • A party who previously may have been able to establish jurisdiction in the UK in relation to a non-EU defendant on the basis that the contract was made in England, or is governed by English law, may not be able to bring proceedings in the UK if the contract is to be performed in another Member State; and

  • UK Courts may no longer be able to use the procedural discretion available under the laws of the UK known as forum non conveniens to consider the appropriateness of the forum when determining whether to assert jurisdiction over a non-EU defendant or stay proceedings in favour of a more appropriate forum.  It is worth noting, however that the discretion of UK courts to rely on the doctrine of forum non conveniens has been limited in recent years by several judgments of the European Courts of Justice.

The amendments proposed by the Commission will be subject to debate separately in both the European Council and the European Parliament and any resulting compromise will also need to be approved by both.  Whether the UK participates in the negotiations as part of the European Council will depend on whether or not (and when) it elects to opt into the Regulation.  However, it is worth remembering that similar concerns in relation to the Rome I Regulation (on the law applicable to contractual obligations), were eventually resolved to the UK government’s satisfaction and the UK then opted in to Rome I.  We will follow this process in subsequent issues of the EU Regulatory Update.



  • Robert Hanley
    Partner | Sydney
    T: +61 2 9296 2000
    M: +44 7810 434 350

 Local contact(s)

Key developments in European financial sector regulation



Welcome to the first edition of our European Regulatory Update.

We aim to bring you in-depth analysis of the key legal and regulatory reforms which are likely to impact on you doing business in Europe.  We focus on important capital markets, banking and finance, corporate and M&A reforms and issues.

Author: Robert Hanley, Partner

Prospectus and reporting issues

Recent changes may affect the need for non-European issuers to produce a European compliant prospectus and to comply with ongoing financial reporting obligations.

Author: Sophie Chalton

Increased costs and new regulatory charges for banks

Lenders and borrowers lock horns over how to deal with increased costs approaching over the horizon.

Author: Emma Malkin 
New procedure brings 'US' style mergers to Europe  

The first attempt to implement a new European 'merger by absorption' for a public takeover has failed but, in some circumstances, the new merger methods may be useful.

Author: Jonathon Wood

EU raise MiFID hurdles to non-EU investment firms

Accusations of protectionism has been the response to proposed changes to the Markets in Financial Instruments Directive, a key element in EU financial market integration and regulation.

Author: Joe Newitt