New company law reform bill. Power to order greater disclosure of exercise of voting rights by institutional investors
| Pages | 119-122 |
| DOI | https://doi.org/10.1108/13581980610644806 |
| Published date | 01 January 2006 |
| Date | 01 January 2006 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL AND REGULATORY COMMENT
New company law reform bill
Power to order greater disclosure of exercise
of voting rights by institutional investors
Joanna Gray
Newcastle Law School, University of Newcastle upon Tyne, UK
Abstract
Purpose – To address the practical implications of the new company law reform bill.
Design/methodology/approach – Explain the objectives of the Bill.
Findings – The current government position is a continuing preference for disclosure on a voluntary
basis by firms but Clause 866 of the Bill leaves room for alternative action, shared a voluntary
disclosure regime fail to deliver progress.
Originality/value – In its current draft from Clause 866 embraces the public at large, not just
institutional clients, and therefore the latter are tacitly advised to act now rather than later, if its
termed are to be binding on themselves alone, to the exclusion of the general public.
Keywords Company law, Disclosure,Investors
Paper type Viewpoint
Company law reform bill
Now that implementation of the Financial Services and Markets Act 2000 is complete,
and regulated firms concentrate on developing the systems and compliance changes
needed to implement the host of EU and international level legislative and regulatory
initiatives in the financial sector such as the Basel II Capital Accord and the various
implementing measures arising out of the Markets in Financial Instruments Directive
(2004/39/EC “MFID”), those regulated firms that have corporate status could well be
forgiven for balking at the prospect of getting to grips with yet another significant and
substantial legislative reworking of the broader business environment in which they
subsist. Yet the 558 pages, 885 clauses and 15 schedules of the company law reform bill
published on 3 November 2005 and introduced into Parliament that same day will
require scrutiny and reflection as their practical implications.
The timing of the Bill’s metamorphosis from its previous (incomplete) draft versions
in 2002 and March 2005 has taken some (including this commentator) by surprise and
has certainly come at an inconvenient stage in the academic year! However, the
company law reform consultative process has been visible and ongoing since Spring
1998 and so cannot possibly be said to fall into the “Dangerous Dogs” category of
reactive and hasty legislation. The objectives of the new Bill are four fold:
... enhancing shareholder engagement and promoting a long term investment culture;
ensuring better regulation and a “Think Small First” approach; making it easier to set up and
run a company; and providing flexibility for the future[1]
Although each one of those objectives should be of interest in to readers of this
Journal it is to a single clause proposed to further the first objective that this update
The current issue and full text archive of this journal is available at
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New company
law reform bill
119
Journal of Financial Regulation and
Compliance
Vol. 14 No. 1, 2006
pp. 119-122
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980610644806
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