Welcome to the Dillon Eustace corporate bulletin. Below, we have set out some of the recent developments which we feel may be of interest to you and/or your business. If you wish to discuss anything contained in this bulletin, please don't hesitate to contact us.
Companies Act 2014
Enactment of the Companies Bill 2012
The Companies Bill 2012 was signed by the President of Ireland on 23 December 2014 and has been enacted as the Companies Act 2014 (Act No. 38 of 2014). The Act will be commenced by Statutory Instrument and is expected to be effective from 1 June 2015 with a transition period of 18 months for certain elements.
The Companies Act represents a significant reform of Ireland's company law regime by consolidating, reforming and amending existing company law legislation. With about 1,500 sections, it is the largest piece of legislation ever enacted by the Oireachtas.
The Companies Act impacts every Irish company together with all directors and shareholders.
Please see our website ( http://www.dilloneustace.ie/) for updates on the key innovations of the Companies Act.
The Companies Registration Office has yet to finalise and introduce over 159 new CRO forms. Also, the Rules Committee of the District and High Court will need to consider the new statutory provisions which will permit new applications in the District and High Court under the new provisions of the Companies Act 2014.
Directive on Disclosure of Non-Financial and Diversity Information
Directive on disclosure of non-financial and diversity information by large companies and groups addressing environmental, social and governance issues was published in the Official Journal of the EU
The Directive on disclosure of non-financial and diversity information by large companies and groups addressing environmental, social and governance issues was published in the Official Journal of the EU on 15 November 2014. The Directive entered into force 20 days later; i.e. on 6 December 2014. Member States have to transpose the Directive into national law by 6 December 2016. The provisions of the Directive have to be applied to all undertakings within scope for the financial year starting 1 January 2017.
The Directive will require certain companies to disclose information in their management report on policies, risks and results on matters such as respect for human rights, environmental matters, diversity, social and employee related issues, anticorruption and bribery issues and diversity on boards of directors. The Directive amends Directive 2013/34/EU, which addresses the disclosure of non-financial information but which in that respect has proved to be unclear and ineffective and applied in different ways in different Member States.
The objective of the new proposed Directive is to increase companies' transparency on environmental and social matters and therefore, to contribute to long term economic growth and employment. The European Commission believes that transparent companies perform better over time, have lower financing costs, have better employee retention levels and are more successful in the long run.
The Directive will apply to large public-interest entities with more than 500 employees. Public interest entities include listed companies and some unlisted companies, such as banks, insurance companies and other companies that are designated as such by Member States because of their activities, size or number of employees.
ESMA advice and opinion on investment based crowdfunding
On 18 December 2014, ESMA published an opinion and advice to clarify existing EU rules applicable to investment based crowdfunding, and identify regulatory gaps.
The Opinion is addressed to the national competent authorities and provides clarity on how crowdfunding business models fit within the existing EU regulatory framework. It outlines how existing EU rules are likely to apply to crowdfunding platforms, depending on the precise business model used. It also provides guidance to NCAs who may be considering how to regulate platforms operating outside the scope of the harmonised EU rules, on the key risks inherent to crowdfunding and the key components of a regulatory regime to address them.
The Advice, addressed to EU institutions, the European Commission, European Parliament and European Council, highlights the concern that strong incentives currently exist for crowdfunding platforms to structure their business models to fall outside the scope of regulation and asks them to consider policy options to reduce these incentives. Avoiding regulation presents risks to investor protection and makes it harder for platforms to grow their businesses.
A copy of the Advice and the Opinion can be found at this link: http://www.esma.europa.eu/news/Press-Release-Investment-based-crowdfunding-needs-EU-wide-common-approach
Shareholder Rights Directive
European Fund and Asset Management Association's views on European Commission's legislative proposal for Directive amending Directive Regarding Encouragement of Long-Term Shareholders Engagement and Directive in respect of Certain Elements of the Corporate Governance Statement
EFAMA has welcomed the European Commission's revision of the Shareholders' Rights Directive, published on 9 April 2014. It has stated that fostering good corporate governance of listed companies and encouraging shareholder engagement is an essential part of the European economy's long-term financing. EFAMA agrees with the European Commission that alignment of interests between asset managers, investors and companies is crucial in securing long-term strategies, which in turn will encourage long-term financing and growth in the EU.
EFAMA's views can be viewed via the following link: http://www.efama.org/Publications/Public/Corporate_Governance/14-4068_FinalPositionPaperSRDII_290914.pdf
(i) Government Announces New Data Protection Plans
The government has announced its intention to implement a "data protection roadmap" in order to tackle data protection issues. In an effort to achieve the goal in making Ireland the "best in class" with regards to data protection plans, three suggestions have been proposed by the government in order to raise the standards of Irish data protection laws;
- Allowing the office of the Data Protection Commission to have its own vote;
- The formation of an office of the Data Protection Commission in Dublin as well as the office in Portarlington; and
- The establishment of an Interdepartmental Committee on Data and Technology Issues in a bid to encourage a wider scope in the area.
The reason for the update to the data protection plans is due to the need for a wider reform of data protection legislation across the European Union. The evolution of new technologies, in particular the expansion of social networks and the effort made in a bid to protect personal data and how it is sought, processed and kept remains a continuous challenge for the Data Protection Commissioner.
(ii) European Data Protection Supervisor Guidelines on Data Protection in EU Financial Services
Guidelines regarding data protection in EU financial services were published by the European Data Protection Supervisor on 25 November 2014. The guidelines were published in a bid to set out that although financial markets are to be monitored closely, the right to privacy and data protection must be adhered to. The guidelines set out the following main points:
- The right to privacy and protection of personal data under EU rights;
- The steps that are required to assess data protection;
- Setting out the ways in which data protection rules are applied in relation to financial services regulation;
- Sets out how the EDPS intends to work with policy and lawmakers in the financial services regulation area.
(iii) Council releases Latest Draft of New Law
On 19 December 2014, the Council of the European Union published the latest version of the Data Protection Regulation.
This latest version shows that both EU institutions and various Member States still have certain concerns in respect of a number of areas of the Data Protection Regulation. By way of example, the UK government has sought to revert to the definition of consent in Article 2(h) of the Data Protection Directive, which would remove the requirement that 'unambiguous' consent is given, thereby watering down the meaning of 'consent' which is currently proposed by the Working Group.
The latest version of the Data Protection Regulation can be viewed via the following link: http://pdp.ie/docs/regulation-council.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.