In Buzzle Operations Pty Ltd (In Liquidation) v Apple Computer Australia Pty Ltd [2010] NSWSC 233, the Australian Court of Appeal held that a third party is not a shadow director under section 9 of the Corporations Act 2001merely because that party imposes conditions on commercial dealings with which the directors of a company feel obliged to comply. For example, a lender who is entitled to demand repayment of a loan and appoint a receiver can say, for example, that it will not exercise these rights only if the borrowing company sells certain assets. However, such condition is not sufficient to make the lender a shadow director, even though the directors of the company are accustomed to comply with its demands. Read more.

The New South Wales Government recently introduced legislation that, if passed, will amend more than 35 laws currently imposing liability on directors for corporate fault. In some instances, directors will be liable only if it can be shown that they were knowingly involved or permitted a contravention of the relevant law by their company. In other instances, the provisions imposing liability on directors will be removed completely or will not apply for certain contraventions. Read more

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In Germany, the draft act of the German Federal Government (Regierungsentwurf) amending the law for investment intermediaries and capital investments was published on 6 April 2011. This act will introduce significant changes for issuers and distributors of so-called “grey-market products”. In Germany, examples of such products (referred to as Vermögensanlagen – capital investments) are shares in German limited partnerships, registered bonds and profit participation rights. In the context of the provisions in the draft act which will amend the scheme of regulation for independent financial advisors (IFAs), the German Federal Council (Bundesrat) pledged on 27 May 2011 that the German Federal Financial Supervisory Authority (BaFin) will be the competent authority for supervising IFAs in Germany rather than the German Chamber of Industry and Commerce. Furthermore, the Bundesrat has suggested a fee-based advisor charging model (as opposed to a commission-based charging model). This fee-based model should be regulated by a separate section in the law. However, the Bundesrat did not suggest to prohibit the commission-based charging model. Read more.

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Amendments to the Act on the Promotion of Private Finance Initiative (the “PFI Act”) aimed at stimulating the entrance into PPP/PFI (Public Private Partnership/Private Finance Initiative) transactions in Japan were promulgated on 1 June 2011 and will come into effect within 6 months of such date. Read more.

Until recently, there has been no legislative guidance on whether Japanese courts have jurisdiction over international disputes with the matter being decided, in principle, by the agreement of the parties to the dispute. In the absence of agreement, the courts have followed the Supreme Court’s ruling that, in general, the rules applicable to determining jurisdiction in domestic disputes apply to mutatis mutandis. The “Act on the Partial Revision of the Civil Procedure Code and Civil Preservation Act” (“the Act”) enacted on 28. April 2011 provides Japanese courts with the principles to be applied in determining jurisdiction in international disputes. The Act will come into effect in mid-2012. The provisions of the Act are very detailed. Read more

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On 20 and 29 April 2011 the Central Bank of the Russian Federation issued the following directives: Directives No. 2612-U amending its Regulation No. 283-P "On the Formation of Provisions by Credit Organizations for Potential Losses"; Directive No. 2613-U amending its Instruction No. 110-I "On Mandatory Economic Ratios for Banks," dated 16 January 2004 and Directive No. 2617-U "On Peculiarities of Evaluation of Banks' Economic Position." Read more.

On 5 April 2011 the Federal Service for Financial Markets issued Order No. 11-10/pz-n approving the "Procedure for Entry into Registers of Pledges over Registered Securities and Amendments on the Transfer of Rights to Pledged Securities." The Order entered into force on 31 May 2011 and replaced FSFM Resolution No. 13/ps of 22 April 2002 on the same issue. Read more.

On 18 and 20 May 2011, the State Duma adopted in the first reading, the following draft laws: Draft Law No. 544335-5 amending the Federal Law "On the Insurance of Individual Bank Deposits in the Russian Federation"; Draft Law No. 521063-5 amending the Federal Laws "On Banks and Banking Activity" and "On the Central Bank (Bank of Russia)" and reading Draft Law No. 521918-5 amending the Federal Law "On Bank for Development" and some other laws regarding insurance of export credits. Read more.

On 18 and 20 May 2011, the State Duma adopted in the first reading, the following draft laws: Draft Law No. 544335-5 amending the Federal Law "On the Insurance of Individual Bank Deposits in the Russian Federation"; Draft Law No. 521063-5 amending the Federal Laws "On Banks and Banking Activity" and "On the Central Bank (Bank of Russia)" and reading Draft Law No. 521918-5 amending the Federal Law "On Bank for Development" and some other laws regarding insurance of export credits. Read more.

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The Pension Protection Fund (PPF) pays compensation to members of eligible occupational pension schemes on employer insolvency. To fund this, schemes pay a pension protection levy, the risk-based element of which reflects the level of scheme underfunding and the probability of PPF entry during the next year. One factor in the calculation of employer insolvency is the “failure score” produced by Dun & Bradstreet (D&B). Read more.

Following a joint review by the Law Commissions of England and Wales and Scotland, the Consumer Insurance (Disclosure and Representations) Bill has been put before Parliament to reform insurance contract law for consumers. The Bill is expected to move through Parliament with little, if any, opposition and to come into force in 2013. Read more

Following the financial crisis regulators across the world set themselves ambitious regulatory reform programmes and whilst much has been achieved, it is debateable whether the EU reform process is running out of steam. Read more.

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On May 10, 2011, the US Securities and Exchange Commission (SEC) proposed to adjust the financial thresholds used to define a “qualified client” for purposes of the performance compensation rules under the US Investment Advisers Act of 1940 (Advisers Act), generally raising the so-called net worth qualification test from US$1.5 million to US$2 million and the so-called assets under management qualification test from US$750,000 to US$1 million. In general, only a “qualified client” may be charged performance-based fees by SEC-registered investment advisers, and the Dodd-Frank Act had directed the SEC to revisit these thresholds. Notably, the new thresholds would not apply retroactively, so that performance fee arrangements entered into under the earlier rules will not be affected. The SEC also confirms that newly registered investment advisers need not retroactively apply any qualified-client thresholds to performance fee arrangements entered into prior to a firm’s registration with the SEC. Read more.

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