01 October 2014
The global trend for tightening requirements continues
The Limited Partnerships Amendment Act 2014 comes into force on 1 September 2014 and the Act introduces a number of changes to registering Limited Partnerships after that date. Existing Limited Partnerships (registered prior to 1 September 2014) will be subject to the changes introduced by the Act, affecting both new and existing Limited Partnerships.The changes introduced are to increase confidence in New Zealand’s financial markets and regulation of corporate forms. It also introduces more stringent registration requirements and assists with New Zealand’s compliance with the Financial Action Task Force on Money Laundering recommendations.
The new Companies Ordinance (CO) and subsidiary legislation commenced operation on 3 March 2014 and has been divided into 21 parts, comprising 921 sections and 11 schedules. It represents significant reforms to company law in Hong Kong. The grace period to comply with the new CO requirement to appoint a natural person as director in Hong Kong will lapse on 2 September and all companies must have an individual director after 2 September 2014.
The latest version of the UK Corporate Governance Code has been launched by the FRC. Setting the standards for good governance, companies with a premium listing must report on their compliance with the code, but others adhere to it to demonstrate to investors their commitment to best practice. The code requires boards to take a long-term focus and to look at strategic risks that could affect the company and its viability. For investors, knowing how the board is managing and mitigating risks is an important indicator when judging whether the company will be able to deliver the value that they seek.
The Securities and Exchange Board of India (Sebi) and the Union finance ministry are having discussions over the stricter corporate governance code prescribed by the former for listed companies.
The talks are on whether there is a need to have a different corporate governance code for listed companies other than what is prescribed in the new Companies Act. Although Sebi’s new corporate governance code is largely aligned to the latter requirements, it has also prescribed stricter norms for publicly listed companies. Its new code, revised clause 49 of the Listing Agreement, will become applicable from October 2014.
The new norms impose more checks and balances on independent directors and auditors of listed companies in order to increase transparency. It also has clauses that give more powers to minority shareholders to block abusive related-party transactions (RPT).
Thorold Youngman-Sullivan and Jasraj Chana