Companies Bill 2012 Update

On 17 June 2014, the Seanad Committee Stage of the Companies Bill was completed and all of the 170 amendments tabled by the Department of Jobs, Enterprise and Innovation were agreed. The Bill will now be considered by the Seanad at the Report Stage, however a date has not yet been fixed for this stage.

It is anticipated that the Companies Bill will be enacted towards the end of 2014 and will be effective some time in 2015. Private companies limited by shares will be given an 18 month transitional period to take certain action as a result of the introduction of the Act. The Minister for Jobs, Enterprise and Innovation may choose to extend this by a further 12 months. The transitional period will give directors and shareholders the time to decide between registering as a new-form company ("CLS") and registering as a designated activity company ("DAC"). Where a company takes no action, it will be deemed to have become a CLS on the expiry of the transition period. It is to be noted that many of the changes will, however, come into effect immediately.

Further information relating the technical amendments of the Companies Bill are available accessing the following link:

Credit Rating Agencies Regulation

(i) FSB Published Thematic Review of its Principles for Reducing Reliance on CRA Ratings

On 12 May 2014, the Financial Stability Board ("FSB") published its results from the thematic review of the FSB Principles for Reducing Reliance on CRA Ratings.

This final report focuses on the action plans developed by national authorities to implement the Roadmap which was agreed in October 2012. The first stage of the review, published in August 2013, comprised a structured stock-taking of references to CRA ratings in national laws and regulations. The final report found that, although good progress has been made toward removing references to CRA ratings from laws and regulations, mechanistic reliance can also come from market practices and contracts.

The FSB want authorities to encourage market participants to review provisions within their private contracts which represent mechanistic reliance on CRA ratings (e.g. ratings triggers).

The Review published by the FSB is available at the link set out below:

(ii) ESMA Published Updated Q&A on CRA Regulation

On 2 June 2014, ESMA published its second updated questions and answers ("Q&A") on the Credit Rating Agencies Regulation ("CRA Regulation"). The update affects the following Q&As:

  • Question 2, relating timing of publication of sovereign ratings;
  • Question 3, referred to deviations from the sovereign ratings calendar;
  • and Question 4, regarding investments in credit rating agencies.

The purpose of this document is to provide clarity on the requirements and practice in the application of the CRA Regulation.

All the Q&As may be viewed at the following link:

(iii) ESMA Publishes Final Report on Draft Regulatory Technical Standards Under CRA III

On 24 June 2014, ESMA published its Final Report on draft Regulatory Technical Standards ("RTS") required under the CRA Regulation, which covers the following areas:

  • Disclosure requirements on structured finance instruments;
  • The European Rating Platform;
  • and The periodic reporting on fees charged by credit rating agencies ("CRAs").

The draft RTS focuses on the information that the issuer, originator and sponsor of a structured finance instrument must publish. The draft RTS incorporates, where possible, existing disclosure and reporting requirements adopted by the European Central Bank and Bank of England to avoid duplication and overlap. The disclosure obligations also provide for standardised investor reporting and disclosure of transaction documents.

The draft RTS on the new European Rating Platform defines the content and presentation of rating information, including structure, format, method and timing of reporting that credit rating agencies should submit to ESMA for credit ratings that are not exclusively produced for and disclosed to investors for a fee. The European Rating Platform website will be set up and run by ESMA.

To view the full article please click here.

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.