PwC's Managing upstream risk: Regulatory reform review - An asian perspective November 2013 | Page 20

2.14 Investor Protection

2.15 Dodd-Frank Act

Update

Update

On 5 November 2013 the FCA strengthened its
listing rules to protect minority shareholders.
The new rules will give shareholders in
premium listed companies additional voting
rights and greater influence over key decisions.
These proposals follow a consultation by the
FCA’s predecessor, the Financial Services
Authority, in October 2012. The consultation
responded to concerns from the investment
community over the governance of premium
listed companies with a controlling shareholder
and the rights of minority shareholders.

The FCA has balanced these concerns with
the feedback it received across the market to
develop focused measures that strengthen the
voice of minority shareholders, without turning
minority protection into minority control. The
FCA’s enhancements to the premium listed
regime include:

• he person and the owned entity do not have
T
knowledge of trading decisions of the other.
• The person and the owned entity trade
pursuant to separately developed and
independent trading systems.
• The person and the owned entity have and
enforce written procedures to preclude one
entity from having knowledge of, gaining
access to, or receiving data about, the trades
of the other. Such procedures must include
document routing and other procedures or
security arrangements, including separate
physical locations, which would maintain the
independence of their activities.

• Ensuring listed companies are run
independently of their controlling
shareholders, including measures that
give independent shareholders a veto over
transactions between listed companies
and a controlling shareholder when this
independence is threatened.

• The person and the owned entity do not
share employees that control trading
decisions.

• equiring separate approval of independent
R
directors by independent shareholders,
in addition to gaining approval from
shareholders as a whole.

• The person and the owned entity do not have
risk management systems that permit the
sharing of trades or trading strategies with
the other.

• nreholder seeks to cancel its listing or
E
remove minority shareholders’ rights.
• equiring greater transparency for listed
R
companies to ensure shareholders have
the information they need to exercise their
voting rights.

On 15 November 2013, the CFTC published
proposed revised aggregation rules for
speculative position limits in certain commodity
interests. The Proposed Rules modify standards
for determining when positions held by two
or more persons must be aggregated for
determining compliance with CFTC position
limit rules. Under the Proposed Rules, an
exemption from aggregation of positions in an
owned entity would be available if the following
criteria are met:

In addition, the Proposed Rules include a
provision that would permit a person with
greater than 50% ownership of an owned entity
to apply to the CFTC for relief from aggregation
on a case-by-case basis. The person would be
required to demonstrate ]