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The Department for Digital, Culture, Media and Sport (DCMS) has recently published its response to the consultation on data protection reform (which we previously wrote about here). For those disappointed by the lack of detail in the Queen's Speech on the Data Reform Bill, this response provides a clearer picture of UK data protection reforms to come – which measures the UK Government is taking forward, which it is dropping and which it needs to consider further. For the detail, we'll need to wait for the text of the draft Bill itself.
The two-pillar corporate tax reform plan forms part of the OECD's project tackling base erosion and profit shifting (BEPS). Whilst Pillar One – which aims to align taxing rights more closely with the location of customers – will only apply initially to MNEs with annual global turnover above €20bn, Pillar Two is expected to have a wider impact on businesses.
On 4 April 2022, the UK Treasury published its response to the consultation and call for evidence on the UK regulatory approach to, amongst others, stablecoins.
Last month, the UK Government set out its legislative programme for this Parliament in the Queen's Speech. In this briefing, we look at some of the proposals relevant to business which have had less media attention.
The Competition and Markets Authority (CMA) has recommended legislating to impose a positive obligation on consumer-facing businesses to disclose information about the environmental impact of their products. It has also recommended changes designed to make it easier to enforce consumer law against companies making misleading environmental claims, to allow orders to be made requiring businesses to make redress payments for environmental harm and to increase supply chain transparency.
On 31 May 2022, the European Securities and Markets Authority (ESMA) published a supervisory briefing (the Supervisory Briefing) addressed to EU national competent authorities (regulators) to promote "common supervisory practices" on the EU Sustainable Finance Disclosure Regulation (SFDR) and other pieces of EU legislation concerning financial sustainability. This was closely followed on 2 June 2022 by a publication of the European Supervisory Authorities – one of which is ESMA - (ESAs) which sets out clarifications (the ESA Clarifications) on the draft regulatory technical standards (RTS) under SFDR.
Sanctions Update: UK's Office of Financial Sanctions Implementation sets out new enforcement guidance in advance of enhanced powers coming into force
On 15 March 2022, the UK's new Economic Crime (Transparency and Enforcement) Act (the "ECA") received Royal Assent. The legislation contained a number of important provisions, including the introduction of a new 'Register of Overseas Entities' and reforms to unexplained wealth orders.
On 26 May, the FCA published a discussion paper setting out its response to feedback received regarding the structure of the UK listing regime. The feedback was in response to the FCA's Primary Markets Effectiveness Review.
On 25 May 2022, the European Commission (Commission) issued its response to the European Supervisory Authorities' (ESAs) questions on the interpretation of the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation (Taxonomy Regulation) of 13 May 2022.
The Queen's speech delivered on 10 May 2022 announced the intention of strengthening the protection and support for victims of human trafficking and modern slavery as well as increasing the accountability of organisations in driving out modern slavery from their supply chains through the implementation of a Modern Slavery Bill (the "MSA Bill").
The European Parliament has issued its draft report (Report) on the European Commission's proposals to amend the existing Alternative Investment Fund Managers Directive (AIFMD II). The Report forms part of the legislative process and includes the European Parliament's suggested amendments to the draft directive issued by the European Commission in November 2021. The draft directive proposed a number of changes to the Alternative Investment Fund Managers Directive, largely in respect of delegation, loan origination, liquidity risk management, data reporting and depositaries and it is those areas which are the main focus of the Report.
On 13 May 2022, the European Supervisory Authorities (ESAs) submitted a number of questions to the European Commission relating to the interpretation of the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation (Taxonomy Regulation). Separately, the ESAs have also been asked by the European Commission for their input on possible amendments to the SFDR Delegated Regulation.
The UK Government has confirmed that it plans to introduce significantly stronger powers for the Competition and Markets Authority (CMA) to enforce consumer law, including the ability to impose fines of up to 10% of global turnover. This is a major change for consumer-facing businesses, although question marks remain over the exact timing.
The EU has published a draft directive designed to help address the perceived bias in favour of debt funding companies as compared with equity and, accordingly, promote financial stability.
Key employment and business immigration developments for employers.
ESG and sustainability issues continue to be a priority for policy makers and regulators globally. The impact of the Ukraine conflict on energy policy and the recent publication of the IPCC's (Intergovernmental Panel on Climate Change) "state of the union" report on the slender window we have to take action in order to meet our climate targets both highlight the scale of the global challenge we face on climate issues.
The UK Government has announced that new border controls on imports from the EU scheduled for July 2022 are being postponed. In the short term, many (but not all) businesses are likely to welcome this move, as it reduces the risk of disruption to supply chains and will ease cost pressures.
The European Commission published a draft Data Act on 23 February 2022 ("Data Act"), as part of the implementation of its February 2020 strategy for data. This proposed regulation, which will have direct effect in members states, is intended to set standards at an EU-wide level to facilitate and create a fairer, more competitive digital environment for the sharing and re-use of data (both personal and non-personal). This briefing looks at who the Data Act impacts, what it does and how it fits into the EU's vision for a single European market for data.