ICSA Scotland Conference presentation

The ICSA Scotland Conference
16 June 2016
WiFi: RCPE – WiFi
Password: chiron1681

Conference Chair
Gary Gray, Chair, ICSA Scotland Branch

To view all the slides, go to the
conference webpage and click the link.

Follow us on: @ICSA_News
Please use the hashtag #ICSASco16

Regulatory round up
Lindsay Wallace, Director of Risk and Knowledge
Management and Morag Moffett, Director,
Employment Division, Burness Paull LLP

Execution of Documents under Scots Law
The ICSA Scotland Conference - 16 June 2016
Lindsay Wallace, Director of Knowledge and Risk
Management
Aberdeen
Edinburgh
Glasgow

Execution of Documents: Overview
• Quick reminder of key Scots law provisions
• Recent additional Scots law provisions
– counterparts
– electronic delivery
• Practical considerations

Quick reminder: Scots Law
• Requirements of Writing (Scotland) Act 1995
• No requirement for Scots law contract to be in writing, except:
– interests in land
– gratuitous unilateral obligations
– trusts in which the transferor is the sole trustee
– wills

Informality Leads to...
• Numerous cases where central issue is whether there is a
legally binding contract
– Email exchanges
– comfort letters
– letters of support
– side letters
– verbal assurances
• there may or may not have been execution
• in all these cases, intention is deciding factor
Don’t get caught out by informal communications

Valid v Probative:
• Additional signatory/witness in prescribed manner makes
document probative
• evidential value
• probative does not mean “more valid” – simply confers
presumption re subscription
• a document which requires to be in writing requires to be
validly executed – but does not necessarily need to be
probative too BUT
• only probative documents can be registered at Land
Register/Books of Council and Session
It’s an issue of evidence, not validity

Electronic execution
• Land Registration etc. (Scotland) Act 2012
– amended ROW(S)A to allow for all documents to be executed electronically
• except wills: continue to require paper and ink
– but not electronic registration
• Electronic Documents (Scotland) Regulations 2014
– simple electronic signature not valid under ROW(S)A
• “I accept” button on computer screen
– advanced electronic signatures
• certification of identity
• is valid under ROW(S)A
• probative if “qualified” electronic signatures issued by approved certification
provider (Smartcards)
Law is now ahead of practical reality

Updated Scots Law Provisions – Counterparts
• Legal Writings (Counterparts and Delivery) (Scotland) Act 2015
• effective from 1 July 2015
• permits the signing of Scots law documents in two or more counterparts
– each party may sign a different copy
• no requirement to have a contractual counterparts provision
• requirements for validity/probativity re execution of a counterpart do not
change
• applies to electronic and traditional documents
• Agreement may be made up of
– all counterpart versions; OR
– one version in its entirety plus other signature pages
Counterparts are easing completions

Counterparts – Not So Straightforward...
• And not exactly the same as English law
• Delivery now critical
– to all parties; OR
– to nominated person
• Nominated person
– must hold and preserve
– unless otherwise agreed
• Date of effect of document?
– when all counterparts delivered and any enactment/law
complied with
• unless one counterparty requires it to be treated as
undelivered
• unless subject to specified conditions precedent
Delivery requires decisions

Electronic Delivery
• Delivery may be by electronic means
– even if traditional document
– even if not executed in counterparts
– part of document sufficient
– but must be by “accepted method” or statutory fallback as to means
and form
• Does hard copy need to follow?
• Electronic delivery means
– email attachment
– fax
– USB/memory stick
– other electronic apparatus that makes the “thing” readable
Electronic delivery distinct from counterparts

Key Messages
• Counterparts are beneficial
• Delivery is now a fundamental concept of Scots law
• Completion mechanics need to be agreed carefully in advance
• Don’t simply follow English law of counterparts

Lindsay Wallace
Director of Knowledge and Risk Management
+44 131 473 6905
lindsay.wallace@burnesspaull.com

Gender Pay Gap Reporting
Presentation by: Morag Moffett, Director
To: ICSA Scottish Conference
16 June 2016
Aberdeen
Edinburgh
Glasgow

What is the “gender pay gap”?
The difference between the average hourly earnings of men
and women in the UK

What is the UK’s overall gender pay gap?
A: 13.9%
B: 19.2%
C: 26.4%
D: 3.1%

Average
overall pay
gap = 19.2%
Average full
time pay gap
= 9.4%

Why?
Unconscious
bias
Historical job
segregation
and “women’s
work”
Impact of
family
responsibilities
Lack of part-
time/ flexible
work in better
paid positions
Lack of women
in senior roles

Why?
• Equal pay laws having limited impact outside public sector
• Voluntary gender equality reporting initiative (Think, Act, Report) has
not worked
• Section 78 of the Equality Act confers power to pass regulations
requiring mandatory reporting
• Government proposing to exercise that power in order to “end the
gender pay gap in a generation”

“What gets measured, gets managed. What
gets publicly reported, gets managed even
better.”

Who do the rules apply to?
• Any private or voluntary sector employer with more
than 250 employees
• Public sector employers excludes
• Includes companies, LLPs, partnerships
• Employees ordinarily working in the UK
• ‘Employees’ –vs.- casual workers
• Contract governed by UK employment law

When?
• Regulations come into
forceOct 2016
• Duty to report arises
30 April
2017
• Duty to publish report
29 April
2018

What does an employer need to report?
1. Difference in mean pay
2. Difference in median pay
3. Difference in bonuses
4. Proportion of men and women who receive bonuses
5. Gender pay split breakdown

1. Difference in mean pay
• Snapshot on 30 April each year
• Average gross hourly rate of pay
• % difference in mean pay:
(A-B)
A x 100

Definition of “pay”
Includes:
• basic pay
• paid leave
• maternity pay
• sick pay
• shift premium pay
• bonus pay
• on call allowances
• standby payments
• area allowances
• first aider or fire warden
allowances
• car allowances

Definition of “pay”
Does not include:
• pay for a different pay period
• overtime
• expenses
• value of salary sacrifice schemes
• benefits in kind
• redundancy pay
• arrears of pay
• tax credits

2. Difference in median pay
• Snapshot on 30 April
• % difference median gross hourly rate of pay
Lowest paid Median Highest paid

3. Difference in bonuses
• Calculated over 12 months before 30 April
• % difference in mean bonus
• Bonus pay includes:
- commission
- long term incentive plans
- cash equivalent value of shares

4. Proportion of men & women who receive bonuses
• 12 months before 30 April
• Must be expressed as a percentage
• Anti-avoidance

5. Gender pay split breakdown
• Quartile pay bands for overall pay range
• Lowest paid to highest paid
• Based on gross hourly rate of pay
• Report number of male and female employees in
each pay band

Publishing pay gap information
• Annually from 29 April 2018
• No obligation to include explanatory commentary
• Accuracy statement
• Employer’s website for 3 years
• Must be ‘searchable’ by public and employees
• Upload to Government’s website

What happens if you don’t comply?
Oct 2016
No
penalties
for non-
compliance
No
mechanism
for
checking
accuracy

Next steps...
Investigate
Review
average male
and female
salaries by job
type and full
and part time
status
Evaluate
Evaluate the
reasons for the
pay gap and
any justification
for this
Action
Implement an
action plan to
address the pay
gap and
consider how to
report that

Will you be?...
Defensive
In fear of equal
pay claims
and/or
reputational
damage?
Positive
Already have a
good story to
tell?
Honest
Recognise the
gap, give
reasons for it,
explain what
you are doing
to improve it
and continue to
report on
progress?

Risks
Equal pay
claims?
Sex
discrim
in-ation
claims
Reputation
al damage
Impact
on
employ
ee
relation
s

Morag Moffett
Director
morag.moffett@burnesspaull.com
Tel: 0141 273 6737
Get in touch

Practical considerations for the
implementation of the Register of People
with Significant Control
Peter Swabey, FCIS,
Policy & Research Director, ICSA

The PSC Register – where does it come from?
The Small Business, Enterprise and Employment Act 2015
‘SBEE Act’
A product of the Red Tape Challenge ………

The Small Business, Enterprise and Employment
Act 2015
A revised timetable ………….. AGAIN (18)
Full details of the latest timetable can be found on the Companies House website
at :
https://www.gov.uk/government/news/the-small-business-enterprise-and-
employment-bill-is-coming

Act 2015
26 May 2015
Bearer shares were abolished. There is now a legislative timetable in place and
any existing bearer shares must be surrendered by 26 February 2016.
If your company has bearer shares in issue there is a statutory process on which
you should already have embarked – notices to holders were due to go out by 26
June 2015. If you do not have this in hand, you need immediate legal advice.

Act 2015
10 October 2015
The day element of the date of birth of directors was hidden from the public
register
The accelerated strike-off process was introduced – down to two months from
three – same with objections. Companies House no longer re-advertises a
Gazette notice once a valid objection has expired
The requirement to give consent to act as a director or secretary has changed.
The company confirms that consent has been given and Companies House will
write to all newly appointed directors.

Act 2015
April 2016 (was December 2015)
The process to rectify the register in the event of director disputes or registered
office disputes will be simplified.
If the director disputes the fact, the company must provide evidence of consent.
If a registered office address is disputed, Companies House will investigate and will
have power to change the ROA to a default address

Act 2015
6 April 2016
Companies will be required to keep a register of people with significant control
(a PSC Register)
Implementing regulations for companies and LLPs were laid before Parliament on
25 January, and that these can now be found:
Companies - http://www.legislation.gov.uk/ukdsi/2016/9780111143018
LLPs - http://www.legislation.gov.uk/ukdsi/2016/9780111143025

PSC Register: policy
There are five core elements to new Part 21A of the Companies Act 2006 (CA06):
1.The definition of a ‘person with significant control’
2.The legal entities in scope of requirements
3.Obtaining the information
4.The register
5.Disclosure of and access to the information
BIS have replicated or extended existing company law criminal offences to
deal with those who fail to provide information or provide false information.

PSC Register: definition
BIS have used the existing definition of ‘beneficial owner’ in the EU anti-money laundering
context as the basis.
New Schedule 1A to the CA06 sets out five ‘specified conditions’. An individual meeting
one or more of these conditions is a Person with Significant Control (‘PSC’):
1. Ownership of more than 25% shares
2. Ownership of more than 25% voting rights
3. Ownership of right to appoint or remove a majority of the board of directors
4. Right to exercise significant influence or control
5. Right to exercise significant influence or control over a trust or firm which trust or firm
would be a PSC, were it an individual)
In certain circumstances a legal entity must be noted in the register (‘relevant legal
entities’ or ‘RLEs’).

PSC Register: scope
All UK companies, except companies listed on UK regulated or
prescribed markets, and Limited Liability Partnerships will have to
keep a PSC register.

PSC Register: obtaining information
Companies must take reasonable steps to find out if they have any PSCs or RLEs
and identify them.
In some cases the company will already have this information.
In others the company will need to serve notice on individuals and others. A
person in receipt of such a notice is required to reply. Failure to do so is a criminal
offence. Shares may also be subject to restrictions by the company.
PSCs and RLEs are also required to disclose their interest in the company to the
company in certain circumstances.

PSC Register: the company’s register
Companies must hold and keep available for public inspection a PSC register. This will
contain information on the PSCs’:
•Full name
•Service address
•Country or state of usual residence
•Nationality
•Full date of birth
•Usual residential address (not publicly available)
•Date on which PSC obtained control
•The nature of his or her control over the company
Register must be kept up to date as information changes
People may access the register on request.

PSC Register: the central register
Companies must provide all the information in their PSC register to Companies
House on incorporation and then at least once every 12 months as part of the
new confirmation statement.
All information will be made available on the public register except:
• The full date of birth (only the month and year will be shown on the public
register, except where the company elects to keep its PSC information solely
on the register at Companies House)
• The usual residential address

PSC Register: the protection regime
Individuals at serious risk of harm will be able to apply to the registrar of
companies to prevent their information being publicly disclosed on the company’s
register and the central register.
Specified public authorities will have access to protected data on request.
BIS have recently consulted on this regime -
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/4379
74/bis-15-315-register-of-people-with-significant-control-consultation.pdf
Covers the scope, nature and extent of control, fees, the protection regime and
warning and restrictions notices

PSC Register: guidance
Two types of guidance:
•Statutory
•Non-statutory
The legislation requires the Secretary of State to publish statutory guidance,
which means that it has legal effect, on the meaning of ‘significance influence
or control’ in the context of the PSC register.

Non-statutory guidance has been produced by a working group on behalf of BIS.
This addresses such issues as:
•What is a PSC or an RLE and what do they need to do
•What information is being collected and why
•Who can access it and how
•Which companies are affected and what they need to do
•What ‘reasonable steps’ means
•What to do if you don’t receive the required information
•How to manage your PSC Register

Both sets of guidance can be found :
https://www.gov.uk/government/publications/guidance-to-the-people-with-
significant-control-requirements-for-companies-and-limited-liability-partnerships
- and on the ICSA website
BIS have also published guidance for PSCs.

PSC Register: ACTION
This became law on 6th April – you must have a PSC Register
From 30th June you will be required to submit it to Companies House when next
you file your annual confirmation statement
NB - Although DTR5 companies (which have to comply with the Listing Rules)
and some others are exempt, the new requirements do apply to the subsidiaries
of such companies.

Act 2015
30 June 2016
The new ‘check and confirm’ annual confirmation statement will replace the
annual return. Companies will be required to begin filing their PSC Register
information at Companies House. Private companies will also be able to choose to
keep some of their registers at Companies House on their check and confirm
date. The process for disqualifying directors will be ‘updated and strengthened’
and the statement of capital will be simplified.

Act 2015
1 October 2016
With specified exceptions, companies will no longer be able to appoint
corporate directors; they will have 12 months to remove any existing
corporate directors that are no longer allowed under the exceptions.
BIS have been consulting on the exceptions to the prohibition of corporate
directors. The implication is that companies will still be able to use corporate
directors for administrative purposes, provided that all the directors of the
corporate director are real people. It would be prudent to identify situations
where your company use corporate directors and consider how you will
comply with the new rules.

Act 2015
Late 2016 / early 2017
Some additional information will be able to be filed at Companies House – no
doubt we will hear more closer to the time.
The UK implementation of the EU’s 4th Money Laundering Directive, expected in
2017, will have an impact on the filing of PSC Register information – we await
information about the impact of this change.

Aberdeen Asset Management
Governance Research
Scott Massie, Group Company Secretary,
Aberdeen Asset Management PLC

For investment professional use only – Not for public distribution
Corporate Governance – actions and behaviours
Scott Massie
Group Company Secretary

70
2015 research survey by Aberdeen Asset Managers
Effective governance is a critical
driver of investment performance
89%
Focus on risk management will increase
81%
Want asset managers to engage with companies
in which they invest client funds, both at pre-
investment and at regular intervals
85%
The importance of governance in investment decision making
The Research surveyed a total of 239 investors, trustees, managers and consultants, globally, across the financial
services sector.

71
Aberdeen’s
approach to
governanceGood corporate governance
is at the heart of Aberdeen’s
business. It is the first quality
we look for in the countries
and companies in which we
invest, and we are committed
to effective and transparent
corporate governance in
running our business

72
If the company does not
meet criteria = no investment
Review process
1
Quality first,
price second
2
Global research,
local knowledge
3
Team
approach
4
Fundamental
research
Relative value is
important, but an
investment has to pass a
quality test. We will not
invest in any asset where
we do not believe the
fundamentals are strong,
regardless of price
Our investment teams are
located in the markets
where they invest
Collaboration improves
decision making.
Teams make investment
decisions and take
collective responsibility
Detailed and fundamental
due diligence. No
investments made
without significant well
documented research

73
Fundamental research
• Clear idea of quality – evidenced by management, balance sheet and business model
• First hand research, no substitute for company visits, no ‘must-have’ stocks, ignore benchmarks
• Coverage: visit holdings at least twice a year, analyse results quarterly, review news flow
weekly
Disciplined investors
• Take time to build positions, investing with a 5 - 10 year business cycle in mind
• Use unrelated sell-offs to buy or add to companies
• Top slice positions on the way up
• Average holding period of a stock is eight years (longer than the average FTSE CEO)
Active shareholders
• Engagement seen as a normal part of relationship with companies
• Our fund managers vote at AGM’s, supported by governance specialists, genuinely integrated
thinking
• Where we have discretion we will always vote and attend AGM’s
How we make a difference
Fundamental, disciplined and active investors
We behave as owners, not just
investors

74
4,305 monitoring and engagement meetings with investee
companies, both at executive and non-executive level.
Full meeting notes prepared on each and
discussed internally
Example: Standard Chartered Bank
We met 35 times over past two years in discussions on
board composition and performance
Engagement
Year to
30 Sep
2015

75
Long termism
Ownership
Structure
Business
Strategy
Financials
Corporate
Governance
ManagementQuality
Invest for the long term – only in companies we understand and we can agree value
Look at it as though it was our own
business
If we don’t understand a company we will not invest.

76
Comply or explain. Recent voting:
• Number of independents on the Board
• Remuneration Report
How Aberdeen Asset Management PLC fits the criteria
• Publicly listed, quality names on the share register
• 10 shareholders own 58%
• 20 shareholders own 71%
Ownership
Structure
• Global asset manager across all asset classes
• Seek organic growth plus selected acquisitions
Business
Strategy
• Steady, consistent, longevity
• Non-Executives – regular refreshingManagement
• Consistent basis of presentation
• Strong Balance SheetFinancials
Corporate
Governance
The Board retains discretion to run the
company for the benefit stakeholders,
shareholders, clients and staff

77
• Governance and oversight
• 5 committees chaired by and comprising Non Executive Directors
• Audit, Innovation, Nominations, Remuneration, Risk
• Risk established in 2010, Innovation in 2014
Quality Ambition Teamwork Integrity Challenge
Good governance is embedded within our
culture and expressed in our corporate values

78
• Simon Troughton, Chairman of Remuneration Committee
• Annual meetings with significant majority of the shareholding and all corporate governance?
• Up to 30 meetings each year
• Translated into voting at AGM
Approve Directors Remuneration Report:
Does Aberdeen get it right? Not necessarily!
2012 84%
2013 89%
2014 89% / 86% (policy vote)
2015 92%
2016 66%
January
AGM
Remuneration

Career development for company
secretaries
Valerie Teller, Independent Career Coach with Tina Hankin,
Head of Company Secretariat, Insurance, Lloyds Banking
Group

Outline for this session
1. What are your long-term career aspirations?
2. How do you raise your profile?

1 | What are your long-term career aspirations?
• What do you really want?
• What is important to you?
• When you are 95, what will you want to say about your
life?

2 | How to raise your profile?
How do you view yourself?

2 | How to raise your profile?
“Too many people overvalue what they are not and
undervalue what they are.”
– Malcolm S. Forbes

2 | How do you raise your profile?
Saboteur (n.):
The Saboteur is a concept that embodies a group of thought processes and
feelings that maintains the status quo in our lives.
Often operating as a structure that would seem to protect us, it in fact keeps
us from moving forward and getting what we truly want in life. Like our minds,
the Saboteur will always be with us. It is neither good nor bad; it just is.
The Saboteur loses its power over us when we can identify it for what it is,
notice our options in the situation and then consciously choose what it is we
do really want at that time.

Know your value to others…
• What do you do in your role
that supports the success of
your company?
• How can/do you help your
colleagues do their jobs more
easily/better?
• What is important about what
you do?
Know your own value…
• Name 3 things you do in your
job that make you feel useful
OR satisfied OR excited?
• What are your 3 greatest
achievements? What is it that
you are proud of for each?
• Without being modest, what do
you value about yourself?

How could the Company Secretarial function
add more value to your organisation?

• Be curious
• “What would you do if you weren’t afraid?”
Valerie and Tina’s top tips!

So practically, what can you do to raise your profile?
• Create opportunities by creating connections – network!
• Get support – mentoring, coaching…

Career development for company secretaries
What will you commit to doing right now?
• By when?
• Find yourself an accountability ‘buddy’

Supply chain transparency
Paul Marshall, Partner, Brodies LLP

ABERDEEN • EDINBURGH • GLASGOW • BRUSSELS www.brodies.com
Modern Slavery: supply chain transparency
Paul Marshall, Partner, Brodies LLP
16 June 2016

Modern Slavery – the challenge
• Brutal form of organised crime in which people are
treated as commodities and exploited for criminal gain.
The true extent of modern slavery in the United
Kingdom is unknown.
“…while it may be unlikely that large companies are
directly employing trafficked people, contractors and sub
contractors (or the agencies supplying labour) could find
themselves targeted by unscrupulous gangmasters who
may be offering a ready supply of labour at knocked down

UK solution: Modern Slavery Act 2015
Place responsibility on large businesses to:-
• put their own house in order and
• police their supply chain
And show the public that you are doing that…
Companies with turnover of £36 million or more must
publish a slavery and human trafficking statement for each
financial year ending 31 March 2016 onwards.

Commercial solution: publish and be damned
Business must prepare a slavery and human trafficking
statement for each financial year.
• Statement of the steps taken to ensure that slavery and
human trafficking is not taking place
• any part of its own business; and
• in any of its supply chains
OR

What to state?
Slavery and human trafficking statement should include
information about:
• organisation structure, business and supply chains;
• slavery and human trafficking policies;
• due diligence processes in the organisation and its
supply chains;
• where is the risk of slavery and human trafficking
taking place and the steps taken to assess and
manage that risk;
• Organisation’s effectiveness in ensuring that slavery
and human trafficking is not taking place in its business

No statement…?
UK government’s position:-
• May raise a court action to force compliance
• Failure to comply with court order is contempt of court
• Unlimited fine
Starting point….
…naming and shaming…?

Have we met before?
UK Ministry of Justice guidance on Bribery Act recommends :-
 Top level management are committed
 Identifying a team to lead on efforts
 Effective communication of zero tolerance policy – internal and external
 Due diligence of third parties before engaging
 Consequences for third parties who breach your anti-bribery provisions
Ministry of Justice Guidance: The Bribery Act 2010, Section 9 Guidance

Supply chain risk
Company is guilty of an offence if an associated person bribes on its behalf…
Guilty unless
…had in place adequate procedures designed to prevent bribery.
Associated person – someone who performs services for or on behalf of an organisation.
Includes suppliers and contractors

Making the statement – good medicine
Your statement tells your story for that year of:-
• People – with responsibility for delivery
• Policies – what has been updated or drafted as new
• Mapping risk – where the risks lie in your supply chain
• Managing risk – steps to update supplier/contractor
procedures/contracts
• Communication – internal and external messages delivered
• Review – room for improvement next year?
Across ABC and now MSA you can be held responsible for the
conduct of your supply chain so this is good medicine…!

Or for questions later...
Paul Marshall
PARTNER
+44(0)131 656 0062
paul.marshall@brodies.com

Reflections on governance
Professor Paolo Quattrone, Dean of Special Projects,
College of Humanities & Social Sciences and Chair in
Accounting Governance & Social Innovation,
University of Edinburgh Business School

Governing ‘socie-ties’
Paolo Quattrone

Vs.
Governing ‘socie-ties’

The less one
knows,
the more one
suspects
(source: www.Treccani.it)

Market Abuse Regulation
Viviane Joynes, Head of Industry, Capita Asset
Services

Market Abuse Regulation
(‘MAR’)
Viviane Joynes, Head of Industry, Capita Asset Services

www.capitaassetservices.com
• Capita Asset Services is a division of Capita plc
• Leading provider of financial outsourcing services, work with more than 40%
of listed companies
• Providing a range of services to assist companies in preparing for MAR
– Company secretarial services
– Insider list compliance.
Introduction
113

Agenda
114
• What is MAR?
• Inside Information
• Market Soundings
• Insider lists
• Dealings by PDMRs
• Interactive session
• MAR source materials
• Questions and answers

What is MAR?
115
• Replaces the Market Abuse Directive
(MAD)
• Expands the scope of the regime
• Aim: Enhance market integrity and
investor protection
• Applicable from 3 July 2016
Overview
• Amendments to primary and secondary
legislation
• Changes to the FCA handbook
UK
implementati
on
• Inside information – definition and
disclosure
• Market soundings
• Insider lists
• Persons discharging managerial
responsibility – rules for dealing and
disclosure
Main areas
covered

• Definition and requirement to disclose remains largely unchanged
• AIM companies – need to comply with MAR article 17 and AIM Rule 11
• DTRs renamed Disclosure Guidance and Transparency Rules sourcebook.
116
Inside Information

Delaying disclosure
• Issuers can delay disclosure if:
– Their “legitimate interests” are protected
– Confidentiality can be maintained
– Public is not misled
• ESMA’s level 3 guidelines specify when inside information disclosure can
and can’t be delayed
• Following disclosure:
– Notify the FCA
– FCA can request information on reason for the delay.
117
Inside Information (continued)

www.capitaassetservices.com 118
Delaying disclosure – credit and financial institutions
• To preserve the stability of financial markets, disclosure can be delayed if:
– Disclosure would risk the stability of the issuer and the financial system
– It is in the public interest to delay
– Confidentiality of information can be ensured
– FCA has consented to the delay
• Must be at least weekly evaluations.
Inside Information (continued)

Key actions
119
Inside information (continued)
Review and update the disclosure policy to include a process to determine
and record:
– Whether information is inside information
– Whether disclosure needs to be delayed – for how long
– Who is/are responsible for making the decision
– Conditions for the delay are fulfilled
– When to end the delay and disclose
Keep written records – when disclosure was delayed, why and by who
Disclosure committee?
Inside information disclosures must be kept on website for at least 5 years

Market soundings
• Inside information “safe harbour”
• New rules on “market soundings”
• Communications by issuers (or a third party acting on their behalf, e.g. a director or adviser) to gauge
interest in possible transaction or takeover bid.

Market soundings (continued)
Subject to detailed procedures and record-keeping requirements, including:
• assessing whether the disclosure includes inside information
• pre-determining a standard set of information to be provided
• obtaining the prior consent of the recipient
• informing the recipient when the market sounding ceases to be inside information
• informing the recipient that they are prohibited from using the information to make investment decisions
and they must keep it confidential
• keeping detailed records of information given, to who and the date and time.

Key actions
122
Market soundings (continued)
Put in place procedures to ensure
compliance with the new requirements on
market soundings
Encourage market soundings to be made on
a recorded telephone line (for which the
receiver must consent to being recorded), to
avoid the need to agree a set of minutes with
the recipient afterwards
All records must be kept by the disclosing
party for 5 years

• Listed companies and their advisors required to maintain insider lists
• New requirement for AIM listed companies
• Insider lists must now include:
– Date and time each insider gained access to inside information
– Reason the person is on the list
– Additional information on each insider: professional and personal
telephone numbers, home address, former surnames, DOB, national ID
number
• ESMA technical standards provide an insider list template.
Insider lists
123

• Insiders must acknowledge in writing the legal and regulatory duties and
sanctions applicable
• Issuers must be able to provide the lists in electronic format upon request
by the FCA
• Difference between permanent and deal/project-specific lists.
Insider lists (continued)
124

Insider lists (continued)
Review and update policy on maintaining
insider lists
Review existing insider lists
Check whether additional information is
available from existing records
Are there data protection issues in obtaining
the information?
Draft communications to insiders and
advisors – ensure records will be kept for an
audit trail.
125
Key actions

Dealings by PDMRs
• Model Code has been deleted from the Listing Rules
• FCA is supportive of industry-led development of share dealing codes or
best practice
MAR sets out new rules on dealings by PDMRs and persons closely
associated (PCAs).

Dealings by PDMRs (continued)
Closed period
• 30 calendar days before
the announcement of
the company's interim or
year-end financial report
• FCA has clarified that
where an issuer
announces preliminary
results, the closed
period is 30 day period
before the
announcement – no
“second” closed period
Timing of
notifications:
• PDMRs must notify the
company and the FCA
within three business
days of the transaction
(previously four days)
• The company must
make the information
public within the same
period.

Dealings by PDMRs (continued)
Permitted
dealings
• The list of
circumstances in
which dealing is
permitted during a
closed period has
been narrowed to:
– Existence of
exceptional
circumstances
e.g. severe
financial difficulty;
or
– Transactions
under an
Content
requirements
• FCA Market
Bulletin released
26 May 2016
• Online link to
FCA for issuers.
Threshold for
notifications
• Only need to be
reported once
threshold of
€5,000 has been
reached
• Unlikely that
companies will
utilise this
exception for
dealings by
PDMRs.

Dealings by PDMRs – AIM companies
AIM Rule 17 (directors' dealings)
Will be deleted and replaced with a signpost to the relevant MAR provision.
AIM Rule 21 (restrictions on dealings)
Will be deleted and replaced with a new rule which:
• Requires the AIM company to have a dealing policy
• Sets out the minimum provisions which it should include.

Key actions
130
Dealings by PDMRs
Prepare a new share dealing code that is MAR-compliant and, in the
case of an AIM company, compliant with AIM Rule 21
Or update the company's existing share dealing code
Consider whether the minimum threshold for notifications will be
imposed or all transactions will be notified
Should PDMRs notify the company within 1 or 2 business days of
the transaction to give the company enough time to make its
announcement within three business days of the transaction
Compile a list of the company's PDMRs and PCAs, and send them a
memo reminding them of their obligations and highlighting the
changes (PDMRs should in turn send this memo to their PCAs)

Inside information
• Who will be responsible for managing the inside information process?
• Are you changing your disclosure policy and if so, in what way?
• Do you have a disclosure committee? If not, willyou be creating one?
Market soundings
• Do you have a market sounding policy?
• If not, willyou be creating one?
Insider lists
• Have you changed the way you are organising insider lists?
• Where will you be keeping your insiderlists? Spreadsheet vs online solution
• Will you have a permanent insiderlist? Who willpermanent insiders be?
131
Break-out session questions

PDMRs
• Given 3-day notification period, what deadline will you be giving your PDMRs?
• Are you planning to use the €5,000 threshold or notify all transactions?
• Are you planning to disclose to the FCA on behalf of your PDMRs?
• Are you planning on adopting similar PDMR dealing clearance procedures as set out
in the Model code?
Dealing codes
• Will you have separate PDMR and non-PDMR codes?
• Will your non-PDMR code apply to all employees or just ‘insiders’?
Closed periods
• What closed periods are you planning on implementing?
• Will you adopt the 30 day shorter period before preliminary results?
• Do you need to make any changes to awards to comply with MAR?
132
Break-out session questions

What needs to be done before 03 July 2016?
133
MAR
Complia
nce
Insider list
set up
Share
dealing
codes
Board
updates
and
trainingCommunicati
ons
(to
employees /
insiders /
advisers)
Disclosure
processes
Related
policies
e.g.
market
sounding

MAR source materials
Issue Reference Status
Market Abuse Regulation EU No 596/2014 Final
Disclosure and delay ESMA Final Report, Sept 2015,
Annex XII
Draft
PDMR transactions – notification
template
Commission Implementing Regs
(EU 2016/523)
Final
PDMR transactions – restrictions,
clearance and disclosure
Commission Delegated Regs (EU
2016/522)
Final
Insider lists Commission Implementing Regs
(EU 2016/347)
Final
Market soundings ESMA Final Report, Sept 2015,
Annex VIII and IX
Draft
134

Time for Questions

Viviane Joynes, CFind out more
Capita offers a range of services and free online resources about MAR:
www.capitaassetservices.com/MAR

Viviane Joynes, CContact us
Viviane Joynes
Head of Industry
T: +44 (0)207 954 9525
M: +44 (0)7753 437 965
E: Viviane.Joynes@capita.co.uk

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