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Corporate Review: FSA tackles market abuse and the UKLA's future

07 March 2011

In the February 2011 edition of Corporate Review we look at the FSA's recent enforcement action to tackle market abuse in the UK markets, the future of the UKLA and the Financial Reporting Review Panel's concern on how companies are reporting principal risks and uncertainties in their business reviews.

The FSA continues to take enforcement action to tackle market abuse in the UK markets, with the Upper Tribunal recently agreeing with a decision by the authority to fine a financial consultant for breach of the civil offence of insider dealing under FSMA. The FSA has also recently fined JJB Sports Plc for failing to disclose promptly to the market inside information in relation to two acquisitions by the company.

The future of the UKLA is becoming clearer, in light of the government’s recent consultation paper on proposed changes to the UK’s regulatory structure. It is intended that the UKLA will form part of the proposed new Financial Conduct Authority, which will retain the FSA’s prosecution powers in relation to market abuse.

The Financial Reporting Review Panel has expressed concern about how companies are reporting principal risks and uncertainties in their business reviews, which form part of the directors’ reports in annual reports and accounts.

In a recent decision, the Supreme Court has provided a welcome clarification of what is required before the law will impose a de facto directorship. Separately, the High Court has recently interpreted warranties in a sale agreement with the decision highlighting the importance of careful drafting, and showing that the courts will normally respect the freedom of contracting parties to formulate their agreements as they wish, so long as they are not a sham or contrary to public policy.

If you would like to receive a full copy of the February edition of Corporate Review, please speak to your usual Allen & Overy contact or email corporatepublications@allenovery.com.