Verbatim: Global Compliance - Quarterly Newsletter: Spring 2013

by Orrick, Herrington & Sutcliffe LLP

We've highlighted a few notable developments in corporate governance law taking place this spring that may be of interest to you. For more information on any of the topics listed below, please contact us at

Africa – The Competition Commission for COMESA (Common Market for Eastern and Southern Africa) came into force earlier this year.  COMESA represents 19 eastern and southern African states and has created a new supra-national merger regime.  The Commission began accepting merger control filings and enforcing competition rules in January 2013.  Headquarters are located in Lilongwe, Malawi. 

Belgium – On 27 February 2013, the Belgium Financial Services and Markets Authority (FSMA) issued new recommendations for calling the annual general meeting for listed companies.  The recommendations draw attention to requirements of notice and provide practical drafting tips for the meeting agenda and resolutions.

Canada – The Ontario Securities Commission issued an executive order of relief to specified classes of securities offerings on 23 April 2013.  Referred to as "wrapper relief", dealers may now use some foreign prospectus documents in relation to securities offerings in Canada.  The order becomes effective in all provinces and territories on June 22, 2013.

Finland – The government of Finland recently announced changes to its corporate taxation scheme, which are expected to enter into force in 2014.  The corporate income tax rate will be lowered to 20%, with certain specified deductions eliminated. 

Gibraltar – Earlier this spring, the Gibraltar Financial Services Commission (FSC) released guidelines aimed at reminding regulated firms of their duties to hold regular board meetings.  The guidelines dictate that at least 75% of meetings should be conducted from within Gibraltar, and any regulated firms unable to meet this requirement should document the reasons with the FSC.  Exceptions will be made by the FSC on a case-by-case basis. 

India – A public consultation paper discussing proposed revisions to the corporate governance requirements was issued by the Securities & and Exchange Board of India (SEBI) in January 2013.  It intends to establish a more progressive framework for corporate governance in the hopes of luring more international investors to India.  The SEBI initiative announced that it will update the country's listing standards later this year.

Kuwait – In March 2013, Kuwait's parliament introduced several amendments to the Commercial Companies Law ("CLL").  The amendments extend the deadline for compliance with the CCL and clarify the requirements for appointing and removing a manager by ordinary general meeting.  The minimum number of required directors for a closed joint stock company was reduced from five to three, and board members may now also serve as CEO.

Switzerland – The Swiss public voted in favor of the so-called Minder Initiative on 3 March 2013.  The regulation places stronger limits on executive compensation to board members and executive directors of listed companies and demonstrates best practices for private companies. Breaches are punishable by criminal sentence and civil fines.  Transitional provisions are in place until March 2014, with a national implementation regime expected to follow thereafter. 

U.S. – On 2 April 2013, the U.S. Securities and Exchange Commission ("SEC") issued a press release to confirm that social media may be acceptable channels of communication to comply with Regulation Fair Disclosure ("Regulation FD").  Regulation FD prohibits listed companies from selectively disclosing material information before making the information available to the public. Securities issuers that seek to use social media for purposes of public disclosure should take affirmative steps to alert the markets of this intent.

U.S. – The New York Stock Exchange ("NYSE") and the NASDAQ Stock Market ("NASDAQ") recently amended their listing rules governing the independence of compensation committees, which was the culmination of a self-regulatory process promulgated by the passage of The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") in 2010.

Dodd-Frank directed the U.S. Securities & Exchange Commission ("SEC") to establish rules for the national exchanges to address the independence of issuers' compensation committees.  The NYSE and NASDAQ submitted proposals to the SEC to modify their company listing rules in September 2012, followed by revised proposals in January 2013.  Later that month, the SEC released orders to approve the revised proposals without further amendment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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