Rethinking conduct regulation

Conduct regulation has evolved in a manner that lacks coherence. In this article, Professor Iain MacNeil identifies three fundamental characteristics that would need to be addressed in any wholesale reconfiguration

Experimentation in securities market structure and regulation in China: from state to market

A key feature of the socialist market economy in China is the development of securities markets so as to facilitate entrepreneurship. With the national securities market now well established attention has shifted to the development of lower tier markets that may be able to meet the financing needs of smaller scale enterprises. In this article we examine how the concept of experimentation has been applied to the process of developing such markets and the regulatory framework in which they operate. We begin with a survey and critique of the policy and regulatory framework within which lower-tier markets have evolved. We argue that experimentation has been important in China but that it operates in a unique way as a result of the institutional structure in which securities markets are located. We then focus more specifically on the regulatory framework for lower tier markets and present two case studies focused on the establishment and operation of two local equity exchanges in a single province (LiaoNing). While this evidence supports our view on the significance of experimentation it also highlights the problems associated with developing lower-tier securities markets within the current policy framework

Disclosure and engagement: stakeholder participation mechanisms

Over the past years, voluntary self-regulatory instruments like the United Nations Global Compact and the Global Reporting Initiative have become important vehicles through which companies demonstrate their commitment to a more sustainable future, including adherence to environmental and social rules. In the UK, disclosure requirements of companies are to be found in company law and securities law and have recently been increased through the introduction of the strategic report. According to the amended CA 2006, the directors of a company must prepare a strategic report for each financial year of the company. The aim of the strategic report is to provide details on how s. 172 CA 2006 has been applied and how stakeholder interests have been integrated into board decision-making and the activity of companies. The question that this article will address is whether or not, with high levels of disclosure, additional reform is needed, by way of legislative amendments or soft law that will increase stakeholder participation resulting in an engaged stakeholder base during board decision-making

Engaging stakeholders in corporate decision-making through strategic reporting: an empirical study of FTSE 100 companies

The strategic report is the latest iteration of non-financial reporting in the UK. This project empirically analyses the practical implications and relevance of the production of a strategic report for shareholders and especially other stakeholders (e.g. employees, customers, suppliers, environmental agencies, social, community, and human rights bodies). The strategic reports of the FTSE 100 companies from 2015 and 2016 are scrutinised, using a methodology involving compliance coding. This study is especially significant as the practical implications and relevance of the production of a strategic report by company directors have not been discussed in depth in prior literature. This paper fills this gap by first providing empirical evidence on compliance with the relevant statutory provisions. It sheds light on the manner in which companies consider environmental, social and governance (ESG) issues in decision-making and the extent to which disclosure represents an effective strategy for engaging stakeholders in that process. It also evaluates the type and quality of information transferred from the company to stakeholders in the form of the strategic report. This first systematic review of strategic reporting in the UK carries international implications due to the high international shareholder base in FTSE 100 companies

The Pandemic Response in the UK in the Context of Corporate and Financial Law – within and without Law

This short paper focuses on the response to the pandemic in corporate law and capital markets regulation and the role that the law played in it. First, the pandemic has brought the interests of stakeholders into more direct focus in corporate governance than was previously the case. But questions remain as to whether this represents only a temporary adjustment in response to the crisis or, alternatively, a more enduring trend. And if the latter, it prompts consideration of the appropriate techniques for stakeholder engagement and participation in corporate governance. Second, the pandemic has disrupted the relationship between financial firms and their customers and the operation of capital markets. Conduct regulators have responded with a series of interventions. We examine whether those interventions are ad hoc or, alternatively, if they can be linked to key regulatory trends that emerged in the wake of the 2008 global financial crisis. This approach provides a basis for assessing the implications of the pandemic for the future trajectory of conduct regulation. Conclusions are then drawn on the way forward and the likely role that the law will play

Proposed revisions to the UK Corporate Governance Code: a step forward in recognising a company’s responsibilities towards wider stakeholders?

Notes the Financial Reporting Council's consultation on proposed amendments to the UK Corporate Governance Code, and critically evaluates the revisions aimed at involving all stakeholders in corporate decisions, and requiring the board to report on how it has engaged with the workforce and other stakeholders in the context of compliance with the Companies Act 2006 s.172. Suggests potential changes to the proposals

Enforcement and sanctioning

No abstract available

La trayectoria de la reforma regulatoria en el Reino Unido en el despertar de la crisis financiera

Ha habido mucho que hablar de la reforma regulatoria alrededor del mundo a raíz de la crisis financiera pero relativamente poca acción. Como un importante centro financiero internacional, el Reino Unido está muy en el centro del debate y tiene un particular interés en el resultado final. La crisis financiera ha expuesto las debilidades de la “light-touch”’ y “principles-based”, que caracteriza el sistema del Reino Unido en la fase previa a la crisis. Los cambios en la estructura institucional de la regulación recientemente anunciado por el nuevo gobierno de coalición, combinado con cambios al estilo de reglamentación, son propensos a tener consecuencias de gran alcance para la práctica y la intensidad de la regulación en el Reino Unido. Este artículo revisa y evalúa cambios normativos recientes y cambios propuestos en la regulación y considera la estrecha relación entre el gobierno corporativo y regulación. Se evalúa el impacto en el sistema del Reino Unido de las iniciativas emprendidas a nivel EU e internacional así como diversos intereses e incentivos en el Reino Unido que son susceptibles de ser influyente en la conformación del régimen regulatorio en años venideros.There has been much talk about regulatory reform around the world in the wake of the financial crisis but relatively little action. As a major international financial centre the UK is very much at the centre of the debate and has a particular interest in the ultimate outcome.The financial crisis has exposed the weaknesses of ‘light-touch’ regulation and ‘principles-based’ regulation, which characterised the UK system in the pre-crisis phase. Changes to the institutional structure of regulation recently announced by the new coalition government, combined with changes to regulatory style, are likely to have far reaching consequences for the practice and intensity of regulation in the UK. This article reviews and assesses recent and proposed regulatory changes and considers the relationship between corporate governance and regulation. It evaluates the impact on the UK system of initiatives undertaken at the international and EU levels as well as various interests and incentives within the UK that are likely to be influential in shaping the regulatory regime in years to come

La trayectoria de la reforma regulatoria en el Reino Unido en el despertar de la crisis financiera

There has been much talk about regulatory reform around the world in the wake of the financial crisis but relatively little action. As a major international financial centre the UK is very much at the centre of the debate and has a particular interest in the ultimate outcome.The financial crisis has exposed the weaknesses of ‘light-touch’ regulation and ‘principles-based’ regulation, which characterised the UK system in the pre-crisis phase. Changes to the institutional structure of regulation recently announced by the new coalition government, combined with changes to regulatory style, are likely to have far reaching consequences for the practice and intensity of regulation in the UK. This article reviews and assesses recent and proposed regulatory changes and considers the relationship between corporate governance and regulation. It evaluates the impact on the UK system of initiatives undertaken at the international and EU levels as well as various interests and incentivesHa habido mucho que hablar de la reforma regulatoria alrededor del mundo a raíz de la crisis financiera pero relativamente poca acción. Como un importante centro financiero internacional, el Reino Unido está muy en el centro del debate y tiene un particular interés en el resultado final. La crisis financiera ha expuesto las debilidades de la “light-touch”’ y “principles-based”, que caracteriza el sistema del Reino Unido en la fase previa a la crisis. Los cambios en la estructura institucional de la regulación recientemente anunciado por el nuevo gobierno de coalición, combinado con cambios al estilo de reglamentación, son propensos a tener consecuencias de gran alcance para la práctica y la intensidad de la regulación en el Reino Unido. Este artículo revisa y evalúa cambios normativos recientes y cambios propuestos en la regulación y considera la estrecha relación entre el gobierno corporativo y regulación. Se evalúa el impacto en el sistema del Reino Unido de las iniciativas empre