2015 december ebulletin - prac · christiane a. roussell, experienced employment lawyer, joins the...

►ALLENDE & BREA Acts for Outfront Media LatAm sale to France’sJCDecaux ►ARIAS & MUNOZ Act for French Marketer HAVAS in Acquisition of Tribu►ARIFA PANAMA Assists SMBC Aviation Capital in Financing and Delivery ofThree Newly Built Boeing 737-800 Next Generation Aircraft to COPA Airlines ►BAKER BOTTS Represents Evercore in $137 Million Acquisition of Oil& Gas Assets in Midland Basin ►CAREY Assists in Chile’s largest Wind Farm Project Finance►CLAYTON UTZ Northern Territories $800 million NEGI Pipeline ProjectMilestone ►DAVIS WRIGHT TREMAINE Successfully Defends Artist Under the VisualArtists Rights Act of 1990 (VARA) ►GIDE French Competition Authority Dismisses Case Brought AgainstNintendo And Its Wii console ►HOGAN LOVELLS Advises Administrators in Relation To The Pre-PackagedSales of Parts of the Parabis Group ►RODYK Acts in Sale of SHS Holdings’ Refined Petroleum DistributionBusiness – approximately S$100 million ►SANTAMARINA Assists Canada’s Caisse de dépôt et placement du Québec(CDPQ) in US$2 Billion Joint Venture With An Infrastructure Investment Fund ►TOZZINIFREIRE Assists Chinese HNA GROUP Acquisition of 24 PercentStake in Azul Airlines

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December 2015 e-Bulletin

MEMBER NEWS

COUNTRY ALERTS

M E M B E R D E A L S M A K I N G N E W S

59th International PRAC Conference Barcelona

Hosted by Rousaud Costas Duran SLP May 21-24, 2016

60th International PRAC Conference Manila

Hosted by SyCip Salazar Hernandez & Gatmaitan September 24 - 27, 2016

Visit www.prac.org for these and other event details

►AUSTRALIA Safe Harbours and Unenforceable Ipso Facto

Clauses On The Way for Australian Insolvency Law

CLAYTON UTZ

►BELGIUM Bank Tax Assessment As Of 2016

NAUTADUTILH

►CANADA Ontario Climate Change Policy Developments

BENNETT JONES

►CHILE New Restrictions on Advertising of Pharmaceutical

Products CAREY

►CHINA Chinese Securities Regulator Releases Amended

Draft IP Rules for Public Comments

GIDE

►INDONESIA New Regulation on Procedure for the

Utilization for Foreign Manpower ABNR

►MALAYSIA Registration of Engineers Act - Re-Engineering

The Profession SKRINE

►MEXICO FTI Publishes Minimum Technical Conditions

for Interconnection

SANTAMARINA Y STETA

►NEW ZEALAND Government Cancels Cartel Bill Conduct

Criminalization SIMPSON GRIERSON

►TAIWAN Proposal of Draft Amendment to the Design Patent

Substantive Examination Guidelines Announced by the

Intellectual Property Office LEE & LI

►UNITED STATES

►The FAST Act - What Does it Mean to You?

BAKER BOTTS

►Depart of Labor Notice on Tips for Selecting and Monitoring

an ERISA Plan Auditor Alarms Recipients – Fear Not!

DAVIS WRIGHT TREMAINE

►2016 Proxy Season: SEC Staff Issues Important Guidance

On Key Shareholder Proposal Exclusions

HOGAN LOVELLS

►BAKER BOTTS Announces 12 Partner Promotions►CLAYTON UTZ Leading Government Partner To Join Firm►DAVIS WRIGHT TREMAINE Expands L.A. Employment Group►GIDE Announces Seven Partner Promotions►HOGAN LOVELLS Boosts Hong Kong Office►MUNIZ Launches Fashion Law and Retail Practice Group

P R A C M E M B E R N E W S

B A K E R B O T T S A N N O U N C E S 1 2 P A R T N E R P R O M O T I O N S

HOUSTON, November 13, 2015 - Baker Botts, a leading international law firm, today announced the promotion of 12 lawyers to partner, effective January 1, 2016.

“This is an outstanding group of lawyers. They represent future leaders of our firm and of the communities in which we are privileged to serve. The year 2015 is the 175th anniversary of the founding of our firm, and the size of the new partner class underscores our confidence in our future and our commitment to extraordinary client service,” said Managing Partner Andrew M. Baker.

“I am particularly pleased that this class of new partners is also one of the most diverse in our 175 year history, which speaks volumes about the global breadth, capabilities and strength of the firm,” added Mr. Baker.

The 2016 class of partners includes lawyers from offices in Dallas, Dubai, Houston, New York, Palo Alto, Riyadh and Washington D.C.

2016 New Partners for Baker Botts: Omar J. Alaniz - Corporate, Dallas Megan H. Berge - Environmental Keri D. Brown - Tax, Houston Stephen Burke - International Arbitration & Dispute Resolution, Dubai Michael Cancienne - Litigation, Houston Hogene L. Choi - Intellectual Property, Palo Alto Ali Dhanani - Intellectual Property, Houston Shadi Haroon - Global Projects, Riyadh Susan Cannon Kennedy - Litigation, Dallas John B. Lawrence - Litigation, Dallas Terence Rozier-Byrd - Corporate, New York Andrew Thomison - Corporate, Houston For more information, please visit www.bakerbotts.com

SYDNEY, 11 December 2015: Clayton Utz is pleased to announce that Dr Ashley Tsacalos [1] will join the firm's national Public Sector practice as a partner in 2016, based in Sydney.

Ashley has built a reputation as one of Australia's leading advisers to government in the areas of dispute resolution and litigation, and administrative law. His areas of specialisation include contractual disputes, tort claims, judicial review, merits review, regulatory enforcement, public law, government information law and privacy, tendering issues and, insurance law.

Ashley acts for a range of government departments and agencies at federal and state level, as well as Ministers and senior public servants. He has extensive experience in managing complex and often sensitive disputes for government and has also conducted a number of investigations and reviews for government departments and agencies. Ashley also acts for a range of private sector clients within his areas of expertise.

In addition, Ashley has significant experience and expertise in relation to inquiries and Royal Commissions. In the last 12 months, he has represented significant parties in three major inquiries: the Royal Commission into Institutional Responses to Child Sexual Abuse; the Royal Commission into Trade Union Governance and Corruption; and the Special Commission of Inquiry into Greyhound Racing in NSW.

He also acted for the Commonwealth Government in the Montara Commission of Inquiry in 2010 following the worst oil spill in the history of Australia's offshore petroleum industry in 2009.

The head of Clayton Utz's Public Sector national practice group, Jamie Doran, welcomed Ashley's appointment. "Ashley reinforces our commitment to remaining the leading legal services provider to the public sector, particularly in New South Wales. Our government clients will benefit from his broad range of experience and unique understanding of the State and Federal government environments. He will play a leading role in our Public Sector practice." For additional information visit www.claytonutz.com [1] Ashley was awarded a Doctor of Philosophy (Law) in 2012, for his thesis on constitutional law and appellate advocacy. He holds several positions including: Adjunct Lecturer, University of Sydney; Honorary Senior Fellow and Member of the School of Law Advi-sory Committee, University of Wollongong; Member of the Specialist Accreditation Dispute Resolution Advisory Committee, Law So-ciety of NSW. [back]


C L A Y T O N U T Z L E A D I N G G O V E R N M E N T P A R T N E R T O J O I N F I R M

Christiane A. Roussell, Experienced Employment Lawyer, Joins the Los Angeles Office of Davis Wright Tremaine LLP

LOS ANGELES, 3 DECEMBER 2015 – Christiane A. Roussell, an experienced employment lawyer, has joined the growing employment and labor practice at Davis Wright Tremaine LLP as Counsel in the Los Angeles office.

Ms. Roussell has considerable experience litigating single-plaintiff and complex labor and employment claims on behalf of corporate employers, including wage and hour class actions, wrongful termination, discrimination, harassment, retaliation, and non-compete, in court and before government agencies. She also provides HR and employment-related counseling and training to corporate employers.

Ms. Roussell joins Davis Wright Tremaine from Hunton & Williams LLP, an AmLaw 100 firm, where she practiced for five years. She has also served as Senior HR Business Partner, Policy and Investigations, at Broadcom Corporation, where she received a President’s Award for her performance.

"Chrissy has done terrific work for clients in private practice and her experience as inside counsel gives her valuable perspective on our clients’ needs," said Henry Farber, chair of the employment practice at Davis Wright Tremaine. “We are delighted to welcome her aboard." |

DWT’s national employment and labor law practice is one of the largest in the country and has experienced significant growth this year, with the addition of a group in San Francisco and an East Coast team in New York. The firm was recently awarded a 2016 National Tier 1 rating in Employment - Management by Best Law Firms and U.S. News.

Ms. Roussell is the president of the John M. Langston Bar Association of Los Angeles and has received the association’s annual President’s Award three times. She is also the Diversity Co-Chair for the Women Lawyers Association of Los Angeles. In 2011, she was honored as one of the Top 40 Lawyers Under 40 by the National Bar Association, the oldest and largest national association of African-American lawyers and judges. Ms. Roussell received her B.A. in English from Georgetown University and her J.D. from USC Gould School of Law.

For more information, visit www.dwt.com


D A V I S W R I G H T T R E M A I N E E X P A N D S L O S A N G E L E S E M P L O Y M E N T G R O U P

● 59th International PRAC Conference - Barcelona Hosted by Rousaud Costas Duran SLP

May 21—24, 2016

● 60th International PRAC Conference - Manila Hosted by SyCip Salazar Hernandez & Gatmaitan

September 24— 27, 2016

PARIS, 30 November 2015 Gide is pleased to announce the appointment of seven new partners, effective on 1 January 2016:

Paris:

- Alexandre Gauthier (Public & Administrative Law and Dispute Resolution)

- Laetitia Lemercier (Banking & Finance and Projects (Finance & Infrastructure))

- Nicolas Planchot (Real Estate Transactions & Financing)

China:

- Fan Jiannian in Shanghai (Mergers & Acquisitions / Corporate and Banking & Finance)

- Guo Min in Beijing (Tax)

Poland:

- Piotr Sadownik in Warsaw (Dispute Resolution, Public & Administrative Law and IP-TMT)

Turkey:

- Ali Osman Ak in our correspondent firm in Istanbul, Özdirekcan Dündar Senocak (Dispute Resolution and Employment)

Commenting on the appointments, Gide Senior Partner Baudouin de Moucheron said:

"I am delighted with the appointment of our seven new partners and the essential expertise they bring to the firm’s strategic practice groups. These appointments highlight our strong wish to promote our most talented individuals to keep supporting our clients’ development in France and abroad, by offering our advice and litigation assistance in all fields of business law."

For more information visit www.gide.com


G I D E A N N O U N C E S S E V E N P A R T N E R A P P O I N T M E N T S

Hogan Lovells strengthens its International Arbitration (IA) practice in Hong Kong with the hire of partner James Kwan. James is a well-known IA practitioner, whose work focuses on international commercial arbitration across a wide range of industries including energy, infrastructure, life sciences & healthcare, and technology.

His appointment will grow the Hogan Lovells' well-established IA practice in the region – an important part of the firms' IA team, this year ranked 4th in the world in the high-profile Global Arbitration Review GAR 30 list of the most active international arbitration practices. Commenting on the hire, partner Timothy Hill, said:

"With investment and trade rising in Asia as a result of globalisation, international arbitration is an increasingly important issue for companies doing business in the region. "James' extensive practice across a wide range of industries will be a tremendous asset to our International Arbitration team in Hong Kong and Asia, which counts some of the world's largest companies in many sectors as its clients." James Kwan said:

"Hogan Lovells' highly-regarded international arbitration practice in Hong Kong and across multiple sectors globally provides the ideal platform for me to further grow my practice. I am very much looking forward to working with the team in Hong Kong and around the world." Michael Davison, Head of Litigation and Arbitration, said:

"James is an experienced practitioner and very well regarded by the arbitration community in Asia. We look forward to James strengthening our well-established International Arbitration team still further, and we warmly welcome him to Hogan Lovells." | James has represented clients in arbitrations in Asia, the U.S., the Middle East, and Europe under the major institutional rules such the Hong Kong International Arbitration Centre (HKIAC), the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), the China International Economic Trade Arbitration Commission (CIETAC), the Singapore International Arbitration Centre (SIAC), and in ad hoc arbitrations. He was the former co-chair of the Australasian Forum for International Arbitration (AFIA) and an inaugural Asia regional committee member of the ICC’s Young Arbitrators Forum (ICC YAF). James was formerly a partner of Baker & McKenzie in Hong Kong, where he led their Hong Kong International Arbitration practice. He was a member of Baker & McKenzie’s Global International Arbitration Steering Committee.

For more information, see www.hoganlovells.com


H O G A N L O V E L L S A S I A A R B I T R A T I O N B O O S T

LIMA, November, 2015 - Muñiz, Ramírez, Pérez-Taiman & Olaya Abogados launched recently its Fashion Law and Retail practice group, the first practice in charge of handling this sort of issues at the Peruvian legal market. The area is headed by Mauricio Olaya, a principal partner of the firm, whereas Annalucia Fasson, a senior associate, is directly involved in contacting clients and dealing with the daily consultancy.

This practice will provide specialize advice on several matters which cause concern to those who are actively involved in the fashion and retail business, including hiring options, inventory management as demanded by the quickening pace of change in the fashion industry, tax treatment of discounts and special offers, the best way to retain ownership of a brand from tax standpoint, the safest way to enter into franchise agreements, designation of dealers or retailers, hiring of sales promoters, models or advertising agencies, construction of shopping malls and their internal organization or occupation by store ten-ants, among other matters.

Fasson, who followed in the past a specialization in Fashion Law at the Fashion Law Institute at Fordham Law University in New York, points out that: “Fashion Law understands the specific and endogenous characteristics of this industry. Thus, an attorney with this particular knowledge can offer an integral legal counseling over the production line (from the design, import of the product, distribution, trading, merchandising and exportation of the product).

Muñiz, Ramírez, Pérez-Taiman & Olaya Abogados recently signed an agreement with the Fashion law Institute Argentina to promote the development of this practice.

For additional information visit www.munizlaw.com


M U N I Z R A M I R E Z P E R E Z - T A I M A N & O L A Y A L A U N C H E S F A S H I O N L A W A N D R E T A I L P R A C T I C E G R O U P


A L L E N D E & B R E A A C T S F O R O U T F R O N T M E D I A ’ S L A T A M B U S I N E S S T O F R A N C E ’ S J C D E C A U X

BUENOS AIRES, 12 November 2015 - Outfront Media hired Allende & Brea as Argentine counsel in the sale of its outdoor advertising business in Argentina, Brazil, Chile, Mexico and Uruguay to France’s JCDecaux.

JCDecaux’s Latin American arm, which is 85 per cent owned by its French parent company, agreed to carry out the US$82 million sale on 2 November. The transaction is expected to close in early 2016.

The acquisition consolidates JCDecaux’s position as the top outdoor advertising company in Latin America, while Outfront Media will use the sale to pursue its strategy of focusing on regions where it is a market leader.

Argentina Counsel to Outdoor Media - Allende Brea Partner Valeriano Guevara Lynch and associate Laura Kurlat in Buenos Aires. For additional information visit www.allendebrea.com.ar

COSTA RICA, 12 November 2015 - Six Arias & Muñoz offices are helping French marketing company Havas acquire San José-based Central American counterpart Tribu as part of an international merger drive that aims to consolidate the company’s recent growth and leverage the unusually large number of media contracts up for review in Latin America and the US. BLP’s San José, Tegucigalpa, San Salvador and Managua offices are representing Tribu for the deal, which closed in Costa Rica on 29 October, after already obtaining the green light in Guatemala, Nicaragua and El Salvador. Regulatory approval in Honduras is expected to follow in the coming months. No value for the transaction was disclosed. Havas, the world’s fifth-largest advertising company, aims to consolidate strong growth in recent years by snapping up advertising agencies worldwide. The acquisition of Tribu, first announced back in June, is accompanied by the planned purchase of advertising companies in Chile, Iceland, Greenland and the UK. The high number of media contracts up for review internationally makes their acquisition all the more pressing.

Counsel to Havas Arias & Muñoz (Costa Rica) Partner Andrey Dorado and associates Tracy Varela and Nancy Vega in San José; Arias & Muñoz (Guatemala) Partner Jorge Luis Arenales and Associate Ximena Tercero in Guatemala City; Arias & Muñoz (Honduras) Partner Mario Agüero in Tegucigalpa; Arias & Muñoz (Nicaragua) Partner Gustavo-Adolfo Vargas in Managua; Partner Gisela Porras in Panama City; Arias & Muñoz (El Salvador) Partner Lilian Arias and associate Flor de María Cortéz in San Salvador.

For additional information visit www.ariaslaw.com

A R I A S & M U N O Z A C T F O R F R E N C H M A R K E T E R H A V A S I N A C Q U I S I T I O N O F T R I B U


A R I F A A S S I S T S S M B C A V I A T I O N C A P I T A L I N F I N A N C I N G A N D D E L I V E R Y O F T H R E E N E W L Y B U I L T B O E I N G 7 3 7 - 8 0 0 N E X T G E N E R A T I O N A I R C R A F T T O C O P A A I R L I N E S

ARIFA REPRESENTED SMBC AVIATION CAPITAL IN THE DELIVERY OF COPA AIRLINES’ 100TH AIRCRAFT

PANAMA CITY, 18 November, 2015: ARIAS, FABREGA & FABREGA represented SMBC Aviation Capital, a leading global aircraft leasing company, in the financing and delivery of three (3) newly built Boeing 737-800 Next Generation aircraft to Copa Airlines, including Copa Airlines’ 100th airplane. The deal closed November 18, 2015.

ARIFA is one of the few law firms in Panama with experts in the field of aviation law. Over the last 20 years, ARIFA aviation group has been actively involved in the delivery, sale, and financing of aircraft leased to COPA Airlines, representing leas-ing companies and investors in the most complex transactions, as the Panamanian airline expands its fleet of international transport based in Tocumen International Airport. In April, during the Summit of the Americas in Panama, Copa and Boeing signed a USD$6.6 billion agreement for the purchase of 61 additional planes, which will be the new Boeing 737 MAX model.

Key ARIFA attorneys acting in the transaction included Roy C. Durling, partner and Pilar Castillo, associate. For additional information visit www.arifa.com

Baker Botts Represents Evercore, as Financial Advisor to Independent Directors of RSP Permian, Inc., in $137 Million Acquisition of Oil & Gas Assets

HOUSTON, 20 November 2015 - RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) reported that it closed its previously announced acquisition of undeveloped acreage and oil and gas producing properties in the Midland Basin for a purchase price of approximately $137 million, subject to customary post-closing adjustments.

Baker Botts represented Evercore Partners who served as financial advisor to the disinterested directors of the board of directors of RSP in the transaction.

Baker Botts Lawyers/Office Involved: Hillary Holmes (Partner, Houston); Josh Davidson (Partner, Houston).

For more information visit www.bakerbotts.com

B A K E R B O T T S R E P R E S E N T S E V E R C O R E I N U S D $ 1 3 7 M I L L I O N A C Q U I S I T I O N O F O I L & G A S A S S E T S I N M I D L A N D B A S I N


C A R E Y A S S I S T S C H I L E ’ S L A R G E S T W I N D F A R M P R O J E C T F I N A N C E

02 December 2015: DWT has successfully assisted another artist in a claim over the destruction of a work of art. The Visual Artists Rights Act of 1990 (VARA) grants an artist of a work that is integrated into a building the right to receive notice of any changes that will lead to the destruction of the work and the right to remove and preserve his work if it is technically possible. In 1998, Luke Gray was commissioned to paint a mural on the ceiling of a lobby in an office building in midtown Manhattan. In 2015, Mr. Gray discovered that the lobby of the building was in the process of being renovated and that his mural had apparently been removed. Mr. Gray turned to New York Volunteer Lawyers for the Arts, a legal aid program for low-income artists and non-profit arts organizations, which in turn asked DWT attorneys Chris Robinson and Lisa Keith to assist. After an investigation by the building owners, the parties agreed to a settlement without admission of fault. This settlement follows a similar successful VARA claim last year by DWT’s art law practice against the City of New York for the destruction of artist Rachel Wells’ murals at the Woodhull Medical Center in Brooklyn. For additional information visit www.dwt.com

SANTIAGO, 03 December 2015: Chilean firm Carey assisted Santiago-based Latin America Power (LAP) obtain long-term project finance worth US$306 million for its 185-megawatt San Juan wind farm in Chile’s northern Atacama region. A syndicate of European multilaterals and international commercial banks sought counsel from five White & Case LLP offices, Barros & Errázuriz Abogados in Santiago, and PRAC Member Firm NautaDutilh in Rotterdam for the transaction, which closed on 19 November. The 56 turbine San Juan wind farm will have an installed capacity of 185 megawatts once operational in 2016, surpassing the 115 megawatt El Arrayán wind farm to become the largest of its kind in Chile.

Local Counsel to San Juan Carey included Partners Felipe Moro and Juan Pablo Stitchkin, and Associates José Miguel Bellagamba, Matías Vergara, Sophia Bobadilla, Loreto Ribera, María José Martínez, and Diego Yávar in Santiago.

Dutch Counsel for syndicate of European multilaterals and international commercial banks included NautaDutilh Partner Jaco Belder and Associate Roderick De Roo in Rotterdam.

For additional information visit www.carey.cl

D A V I S W R I G H T T R E M A I N E S U C C E S S F U L L Y D E F E N D S A R T I S T U N D E R T H E V I S U A L A R T I S T S R I G H T S A C T O F 1 9 9 0 ( V A R A )


C L A Y T O N U T Z C O N G R A T U L A T E S N T G O V E R N M E N T O N $ 8 0 0 M I L L I O N N E G I P I P E L I N E P R O J E C T M I L E S T O N E

SYDNEY, 23 November 2015: Clayton Utz congratulates our client the Northern Territory (NT) Government on successfully closing the first stage of the landmark $800 million North East Gas Interconnector (NEGI) project.

The NT government announced last Tuesday 17 November that it had selected Jemena Northern Gas Pipeline Pty Ltd (Jemena) to construct and operate the 622 kilometre NEGI pipeline. The pipeline will run between Tennant Creek in the NT and Mount Isa in Queensland, delivering gas from the NT to eastern gas markets

A multidisciplinary and cross-office Clayton Utz team advised the NT Government on all aspects of this first stage. Their role included developing the strategy for delivery of the project (involving two competitive processes in parallel, for the sale of surplus gas, and for the delivery of the NEGI and associated gas transportation services), negotiating the project documents with the two preferred proponents, evaluating initial and final proposals, and drafting the final project documents.

Partners Owen Hayford and Margie Michaels co-led the firm's project team, which included senior associate Gavin Phillips and senior lawyer Dipesh Jasmat in the Darwin office, Brisbane partner Andrew Smith and senior associate Natalie Watson, and lawyer Hannah Stewart-Weeks in Sydney. They were supported by a multidisciplinary Clayton Utz transaction team drawn from across the firm's Sydney, Darwin, Brisbane and Perth offices, which provided specialist input on workplace relations, insurance, finance, competition, environment and planning and native title law.

Co-lead partner Owen Hayford said the NEGI was the first infrastructure project in Australia in many years that has involved multiple jurisdictions and associated legal expertise. "With Margie Michaels leading our experienced infrastructure and energy team in Darwin, Clayton Utz was able to draw on the specialist skills of our lawyers across Australia in advising on all aspects of major infrastructure projects to assist the NT Government to achieve contractual close within 13 months with their chosen proponent, on very favourable terms," he said.

"The Northern Territory Government has secured in return for baseline gas shipments an entirely private sector financed, funded and developed pipeline. That is a great outcome for the NT Government and Territorians. At a macro level, it will significantly improve security of gas supplies to the Eastern seaboard and provide NT gas producers with a new market into which they can sell their gas, as well as stimulating the development of the Territory's vast on-shore gas reserves."

The NT has an estimated 200 trillion cubic feet of gas, which could power Australia for more than 200 years. NT chief minister Adam Giles described the project milestone as a "great outcome" and the first step towards a truly national gas grid.

The NT Power and Water Corporation (PWC) will be a foundation customer of the NEGI, having entered into a 10-year gas sale agreement with Incitec Pivot, at Phosphate Hill near Mt Isa. For additional information visit www.claytonutz.com


G I D E F R E N C H C O M P E T I T I O N A U T H O R I T Y D I S M I S S E S C A S E B R O U G H T A G A I N S T N I N T E N D O A N D I T S W I I C O N S O L E

PARIS, 03 December 2015: In its decision no. 15-D-18 dated 1 December 2015, the Competition Authority ruled in favour of Nintendo France and its Japanese parent company Nintendo Co. Ltd., dismissing the case. This decision ends the procedure initiated by the DGCCRF (General Directorate for Competition Policy, Consumer Affairs and Fraud Control), then the Competition Authority, against Nintendo eight years ago.

The Nintendo group was alleged to have put in place a retail price fixing policy for its distributors in France on the Wii console, its games and accessories, during its launch in December 2006 and again at the end of 2009.

The Competition Authority referred to the usual body of evidence (mention of a retail price by the supplier to the distributors, implementation of a retail price monitoring policy and observation of retail price alignment) to declare both allegations groundless.

The Competition Authority upheld Nintendo’s arguments on the absence of a price monitoring policy with its distributors and dismissed the case without deeming it necessary to examine any retail price alignment and thereby without handling the interesting topic of price construction in a two-sided market, such as that of video game consoles.

The Nintendo group was advised by Gide (partner Antoine Choffel and Charles Terdjman), with the assistance of Frédéric Jenny. CRA (Laurent Flochel) also advised on certain economic aspects. For additional information visit www.gide.com

Sale of SHS Holdings’ refined petroleum distribution business – approximately S$100 million

Rodyk advised SHS Holdings Ltd, a Singapore-listed company in the sale of its entire interests in the TAT Group and Axxmo International Pte Ltd, which collectively operate a distribution business for refined petroleum products, to Brenntag (Holding) BV, a subsidiary of German chemical distribution company Brenntag AG, for approximately S$100 million. Corporate partner Ng Eng Leng led, supported by partner Barry Koh, senior associate Grace Ong and associate Vivian Ip. For additional information visit www.rodyk.com

R O D Y K A C T S I N S A L E O F S H S H O L D I N G S R E F I N E D P E T R O L E U M D I S T R I B U T I O N B U S I N E S S A P P R O X . S $ 1 0 0 M I L L I O N


H O G A N L O V E L L S A D V I S E S A D M I N I S T R A T O R S I N R E L A T I O N T O T H E P R E - P A C K A G E D S A L E S O F P A R T S O F T H E P A R A B I S G R O U P

Canada’s CDPQ buys into Mexican infrastructure

MEXICO CITY - 24 September 2015: Santamarina y Steta has helped Canadian pension fund manager Caisse de dépôt et placement du Québec (CDPQ) agree to a US$2 billion joint venture with an infrastructure investment fund and carry out the venture’s first investment, in a group of highway concessions. The joint venture will invest in a group of Mexican infrastructure concessions . CDPQ holds a 51 per cent stake in the joint venture, while CKD Infraestructura commands the remaining 49 per cent. Structuring the deal saw CDPQ sell CKD Infraestructura a 49 per cent stake worth US$400 million in a joint venture already set up by CDPQ with Mexico’s largest infrastructure and construction company, Empresas ICA. For the joint ven-ture, Counsel to Caisse de dépôt et placement du Québec. representated by Santamarina y Steta Partner Juan Carlos Machorro and associates Ricardo Orea and Cecilia Sarabia.

For additional information visit www.s-s.com.mx

SAO PALO, 03 December 2015 - HNA bought a 24 per cent stake in Azul, making it the single biggest shareholder in the carrier and giving it a seat on Azul’s board. HNA – a group that includes aviation, banking and vehicle leasing interests – hired Brazilian firm TozziniFreire Advogados.

Azul plans to use the financing boost to strengthen its balance sheet and reduce debts after it was forced to delay IPO plans for a third time earlier this year as a result of Brazil’s poor capital market conditions, despite registering for a public offering at the end of 2014.

The deal marks the second time this year Azul has received Chinese funding, suggesting Chinese interest in Brazil remains intact in spite of a shrinking economy at home. In May, the Industrial and Commercial Bank of China lent the airline US$200 million.

Counsel to HNA TozziniFreire Advogados represented by Partner Marcio Mello Silva Baptista in New York, and partner Alexei Bonamin and associates Fernanda de Queiroz and Daniela Contreras Bochi in São Paulo. For additional information visit www.tozzinifreire.com.br

Deborah Gregory led a team of lawyers from Hogan Lovells' Business Restructuring and Insolvency, Real Estate, Employment, Tax and Insurance practices on the sale of the business and assets of the Parabis Group. Hogan Lovells advised the syndicate of lenders and AlixPartners (as the Administrators) on the complex pre-packaged sales of the business and assets of the Parabis Group. The Parabis Group, a provider of legal services to the insurance industry, was one of the first approved firms to utilise the complex Alternative Business Structures which were introduced pursuant to The Legal Services Act 2007. The introduction of the ABS structures allowed non-lawyers to invest in, manage and own law firms. The Parabis Group had tried to optimise its offering to clients by providing the full range of services, including medical and physiotherapy services.

Once it became clear that, despite additional support from the lenders, a sale of the whole Group was not achievable, Hogan Lovells worked with AlixPartners to put together a series of interlinking transactions which resulted in the pre-packaged sales of the assets and business of various parts of the Group, as well as a sale of the shares in the ABS companies, to a number of different purchasers, including the sale of Parabis's defendant business, consumer business and associated assets to a newly incorporated entity established by three of the original founders of the Parabis Group. Commenting, Deborah Gregory, Partner, Finance Practice Group, at Hogan Lovells said: "Unravelling the ABS structure in this way and selling on to a number of different purchasers presented a number of interesting and challenging legal and commercial issues which we were able to overcome and we are delighted that the sales successfully completed on 23 November, preserving almost 2000 jobs." Other Hogan Lovells partners involved in the transaction were Paul McLoughlin (BRI), Oliver Chamberlain (Real Estate), Ed Bowyer (Employment), Kevin Ashman (tax) who were supported by Chris Horrocks (BRI), Gemma Sage (BRI), James Maltby (BRI), Will Beck (BRI), Jayne Sheffield (BRI), Clare Reynolds (BRI), Neal Bhattacharyya (Real Estate), Tom Eyre-Brook (Tax), Matthew Sharkey (IT & IP) and Nina Tulloch (Insurance). For more information, see www.hoganlovells.com

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08 December 2015

Safe harbours and unenforceable ipso facto clauses on the way for Australian insolvency law

The Australian Government has accepted certain recommendations of the Productivity Commission's long-awaited

Report on Business Set-up, Transfer and Closure, in an attempt to change the focus of Australia's insolvency laws from

"penalising and stigmatising business failure”, according to the Minister for Small Business and Assistant Treasurer, the

Hon Kelly O'Dwyer MP.

It has expressed a willingness to legislate to introduce at least two main changes:

• introduce a safe harbour for directors from personal liability for insolvent trading if they appoint a restructuring

adviser to develop a turnaround plan for the company; and

• make "ipso facto" clauses, which have the purpose of allowing contracts to be terminated solely due to an

insolvency event, unenforceable if a company is undertaking a restructure.

Although the proposed changes are steps in the right direction for the turnaround and restructure of distressed

companies, any changes will need to be made carefully to avoid unintended consequences, particularly regarding the

interests of creditors.

A cultural shift: removing the fear of failure

The Report noted two cultural views that affect restructuring in Australia:

• a perception that Australia’s insolvency regime provides insufficient focus on, or incentives to, restructure,

particularly compared to the US regime (ie. Chapter 11); and

• the stigma attached to corporate failure in Australia.

The contrast between the US and Australian regimes is an interesting one and one that we consider reflects our subtle

cultural differences. Generally speaking, it is also replicated in some of the fundamental aspects of our respective

insolvency regimes.

For example, under Chapter 11 directors of an insolvent company usually drive the insolvency process. Conversely,

under Australian law, an external party (ie. an insolvency practitioner) takes over the reins from the directors whose

powers are suspended on appointment of an insolvency practitioner (eg. under section 437C of the Corporations Act

2001 (Cth) once a company is under administration).

Australians, for the most part, are more sceptical of our failed companies and directors whereas, in the US, it is often

said that a failed director wears such experience as a badge of honour.

The Government's response to the Productivity Commission's Report (mirrored in its other announcement on Monday

on innovation policy) makes a clear push to encourage risk-taking and innovation and taking steps to ensure our

insolvency regime does not detract from these pursuits. This might be a challenge in practice, given the countervailing

need in insolvency law to protect creditors, which we look at below.

The key recommended reforms to Australian insolvency law

The Report took a view that the current culture, incentives and legal framework of the Australian insolvency regime

inhibit its effectiveness as a genuine restructuring mechanism. Therefore, while wholesale change to the Australian

insolvency system (such as the introduction of a "debtor in possession" regime in line with Chapter 11) is not justified,

the Report conceded that some specific reforms were warranted.

Corporations Act

The Corporations Act should be amended:

• to provide that within one month of his or her appointment, an administrator must certify that they have

reasonable grounds to believe that the company (or the entity that may emerge following a restructure) is

capable of being a viable business;

• to allow for a "safe harbour" defence to insolvent trading;

• to make provision for "pre-positioned" sales (ie. "pre packs");

• to deem "ipso facto" clauses (ie. clauses that have the purpose of allowing termination of contracts solely due

to an insolvency event) unenforceable if the company is in voluntary administration or the process of forming

a scheme of arrangement;

• to create a moratorium on creditor enforcement action during the formation of insolvent schemes of

arrangement (ie. to align the approach currently used in voluntary administration); and

• to provide for a simplified "small liquidation" process (ie. those companies with liabilities to unrelated parties

of less than $250,000).

The Australian Government should instigate an independent review of the relevant parts of the Corporations Act and the

practices of receivers in the market.

Bankruptcy Act

The Bankruptcy Act 1966 (Cth) should be amended so that, where no offence has occurred, a bankrupt is automatically

discharged after one year. Specifically, this should apply to restrictions relating to overseas travel, holding an office

under the Corporations Act, employment within certain professions and access to personal finance.

Protecting creditors vs promoting risk-taking

It is clear that the Government is focusing on fostering entrepreneurship and innovation. Built into these concepts is the

suggestion that greater risk-taking should be promoted.

However, how do these pursuits marry up with our insolvency regime? A review of the Report and the subsequent

statements from Government suggest that there is an inconsistency between what the Government is now seeking to

achieve and what the insolvency regime currently promotes.

Is this a surprise?

While entrepreneurship, innovation and risk-taking are all necessary and noble pursuits, any reforms to encourage this

type of behaviour should be balanced with the protection of creditors (which must be kept front of mind) as it is creditors

that ultimately need to be protected in the event of insolvency.

The protection of creditors is fundamental to our insolvency regime. It will be interesting therefore to see how the

ultimate legislation will balance companies' and directors' ability to take risks against the protection of creditors.

Promoting restructurings via safe harbours and ipso facto clauses

There is also, in our view, a difference between risk-taking and the promotion of successful restructurings. Successful

restructurings do not necessarily require risks. In some instances, flexibility is the key.

Although the Federal Government has an express intention to introduce a safe harbour for directors and deeming ipso

facto clauses void upon insolvency, it is unclear how these two initiatives alone will impact restructurings given existing

protections under the Corporations Act.

Under section 443A(1) of the Corporation Act, an administrator is personally liable for certain debts he or she incurs (a

similar provision, section 419 of the Corporations Act, applies with respect to a "controller" of a corporation). There is no

doubt that the intention of this provision is to encourage contracting parties to continue to deal with insolvent companies

(which is a very similar outcome to the effect of voiding of ipso facto clauses).

Additionally, depending on the final form of the legislation and following its enactment, parties to a contract could draft

around the legislative prohibition deeming ipso facto clauses void on insolvency by providing additional termination

rights over and above just the right to terminate on insolvency of the counterparty that may also be easily triggered on

the company's insolvency (for example a material adverse change in the company's circumstances).

Whether a safe harbour will result in greater restructuring opportunities remains to be seen. We query if an

independently-appointed external advisor appointed pre-insolvency could achieve what an administrator could not

achieve post-insolvency.

Additionally, it is wrong to suggest that the current regime does not purport to promote restructuring. Section 435A(a) of

the Corporations Act is clear that the objective of Part 5.3A (ie. the voluntary administration regime) is to provide for the

business, property and affairs of an insolvent company to be administered in a way that "maximises the chances of the

company, or as much as possible of its business, continuing in existence..." It is the execution of this objective that is the

key to its success.

The above discussion does not mean that it is our position that the above changes should not be introduced. On the

contrary, we consider that these initiatives should be wholeheartedly encouraged. What it does highlight is that the

scope for real change will be dependent on the drafting of the legislation and the execution of the objective of the

legislation.

Pre-packs as a viable alternative to traditional restructuring

Of particular interest, over and above the often mooted changes regarding safe harbours and ipso facto clauses, in our

view, is the recognition of pre-packs as a viable alternative to the traditional restructuring options of a deed of company

arrangement or scheme of arrangement.

As it currently stands, pre-packs are generally advised against because the controller or administrator may be found to

have been derelict in his or her duties under the Corporations Act (or general law) if the sale is completed. This is most

obvious in the context of a controller's obligations under section 420A of the Corporations Act. The commonly held (and

some would argue, conservative) view is that a controller (eg. a receiver and manager) must undertake their own sale

process to satisfy these obligations ‒ which means taking the assets to market and undertaking a responsible sale

campaign. This does not necessarily lend itself to a pre-pack.

Accordingly, any change that purports to encourage pre-packs must, in the ordinary course, provide some protection to,

and flexibility for, the insolvency practitioner that has undertaken the sale (either by way of amendments to section 420A

or otherwise).

In the context of a pre-packaged administration, the obligations of an administrator could be better elucidated so as to

give the administrator confidence that he or she could effect a pre-pack and still comply with his or her obligations to

creditors. Further, flexibility would need to be built into the requirement and timing of creditors' meetings and reports and

there would need to be less rigid timetables in an administration generally. Again, flexibility is the key.

A discussion paper is on its way

Three months ago we predicted in From Red to Black that this year would see a continued push for the introduction of

safe harbour defences for directors undertaking workouts and continued discussion about Chapter 11 and if it (or parts

thereof) should be introduced into Australian law.

The discussions regarding ipso facto clauses and safe harbour provisions (amongst other initiatives) are encouraging

for the state of the restructuring landscape in Australia for 2016 and beyond. We look favourably upon any proposed

legislation that may provide an improved platform for effective restructures and better returns for creditors in the long

run.

However, the real impact of these proposed changes remains to be seen, as much will depend upon their final form.

We understand that a proposal paper will be released in 2016, with legislation expected to be introduced in mid-2017.

We look forward to further information and discussion around precisely how the Corporations Act will be amended, so

that it can foster real restructures and turnarounds of distressed companies.

We also encourage the Government to ensure sufficient flexibility is built into the current regime and into the proposed

amendments, so that tangible change can be implemented.

Finally, while a shift in focus regarding risk taking and the stigma of insolvency makes sense, this needs to be balanced

with the requirement to ensure creditors are adequately protected.

We will watch this space with interest.

Disclaimer

Clayton Utz communications are intended to provide commentary and general information. They should not be relied

upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising

from this bulletin. Persons listed may not be admitted in all states or territories.

Belgium

Bank Tax as from Assessment Year 2016

Friday, 11 December 2015

As part of the tax shift from labour to capital, banks and insurance companies will have to contribute an

additional EUR 100 million to the Belgian budget by way of a new tax. The so-called bank tax, which isn't so

much an additional levy as it is a reduction in qualifying deductions from the tax base, was introduced by the

Omnibus Act of 10 August 2015 (Belgian State Gazette, 18 August 2015) (hereinafter, the "Omnibus Act").

Applicability

The new measure will apply as from assessment year 2016 (Art. 100 Omnibus Act) to (i) credit institutions

incorporated under the laws of Belgium, accredited in accordance with the Act of 25 April 2014 on the status and

supervision on credit institutions, and other credit institutions carrying out activities in Belgium (Art. 97 Omnibus Act

and new Art. 207 Income Tax Code, hereinafter the "ITC"), (ii) insurance companies incorporated under the laws of

Belgium, accredited in accordance with the Act of 9 July 1975 on the supervision of insurance companies, and other

insurance companies carrying out activities in Belgium (Art. 97 Omnibus Act and new Art. 207 ITC), and (iii) credit

institutions and insurance companies incorporated under the laws of another EEA member state which are authorised

to carry out activities in Belgium in accordance with the abovementioned laws, either through a branch or in the

framework of freedom to provide services.

Calculation Method

The government chose to introduce the new tax by means of a reduction in (i) the notional interest deduction (Arts.

205bis to 205novies §3 ITC, pursuant to which all companies subject to Belgian corporate tax can deduct from their

taxable income a fictitious amount of interest calculated on the basis of their shareholders' equity), (ii) the dividends

received deduction (Arts. 202 to 205 ITC)), and (iii) loss carryforwards (Art. 206 ITC).

The calculation is done in two phases. In the first phase, the applicable reduction is first determined, while in the

second phase, this amount is subtracted from the abovementioned deductions.

Phase I

In the first phase, the reduction is determined. This amount is the product of three factors:

1. for credit institutions, obligations to clients (for example bank deposits), and for insurance companies, technical

reserves;

2. a fixed annual percentage, e.g. 2.37% for credit institutions and 1.88% for insurance companies for assessment

year 2016;

3. the percentage fixed for the notional interest deduction, e.g. 1.63% for assessment year 2016.

Phase II

In the second phase, the hypothetical deductions under the normal rules are first determined. Subsequently, the

reduction calculated in the first phase is subtracted from the hypothetical loss carryforwards, dividends received

deduction, and notional interest deduction, in this order.

As far as loss carryforwards and the dividends received deductions are concerned, unused portions can be carried

forward to the next year, under certain circumstances. However, any unused portion of the notional interest deduction

cannot be carried forward and will therefore be lost.

Finally, the Omnibus Act amends Articles 207 and 536 ITC to ensure that the reduction does not result in a higher

notional interest deduction due to the carryforward of unused deductions from previous years.

Contact us

Pascal Faes | Brussels | +32 2 566 8612

Kurt Demeyere | Brussels | +32 2 566 8610

DISCLAIMERThis publication highlights certain issues and is not intended to be comprehensive or to provide legal advice. NautaDutilh SPRL/BVBA is not liable for any damage resulting from the information provided. Belgian law is applicable and disputes shall be submitted exclusively to the competent courts of Brussels. To unsubscribe, please use the unsubscribe link below, or send an e-mail to [email protected]. For information concerning the processing of your personal data we refer to our privacy policy: www.nautadutilh.com/privacy.

© Bennett Jones LLP 2015 All rights reserved. Bennett Jones refers collectively to the Canadian legal practice of Bennett Jones LLP and the international legal

practices and consulting activities of various entities which are associated with Bennett Jones LLP.

Ontario Climate Change Policy Developments November 25, 2015 | Mike Barrett

Long-Term Climate Change Strategy

On November 24, 2015, the Ontario government released its long-term Climate Change Strategy (CCS) as part of the province's expanding climate change policy development process.

Ontario has previously set the following greenhouse gas (GHG) emissions reduction targets:

◾ 15 percent below 1990 levels by 2020



The CCS sets out, in broad strokes, how Ontario intends to achieve these targets. Five crucial areas are identified for transformative change over the next decades:

1. Develop a Prosperous Low-Carbon Economy with World-Leading Innovation, Science & Technology 2. Engage in Government GHG Policy/Bridge-Building both Domestically and Internationally3. Increase Resource Efficiency of Energy, Water and Land4. Reduce GHG Emissions Across Key Sectors5. Adapt to a Changing Climate

The CCS is intended to be supported by a series of five-year detailed action plans, the first of which will be released in 2016.

Cap and Trade Program Design Options

The Ontario government has recently advanced 4) Reduce GHG Emission Across Key Sectors by releasing design options for a cap and trade program. Ontario intends to link its cap and trade program with Quebec and California and possibly other jurisdictions. The Ontario government is seeking feedback which will be compiled and presented to various stakeholders in early 2016, following which the government will release a draft set of regulations for the cap and trade program. The topics are:

1. Linking with Quebec and California2. Timing3. Program Scope: Sector Coverage, Point of Regulation; Emissions Coverage; New and Expanding facilities; Opting-in4. Setting the Cap 5. Market Design Features: Registration Requirements; Trading Rules; Market Rules; Auction; Reserve Sale Rules6. Price Stability Mechanisms: Auction Reserve Price; Strategic Reserve7. Distributing Allowances8. Flexibility Mechanisms9. Use of Offset Credits

10. Border Carbon Adjustments 11. Recognizing Early Reductions12. Compliance Requirements: True-up; Acceptable Compliance Units; Offset Usage Limit; Retirement; Voluntary Retirement13. Enforcement and Penalties: 3-to-1 Rule; Account Restrictions; Administrative Monetary Penalties

Ontario's recent climate change policy development mirrors recent activity in other Canadian jurisdictions, most notably Alberta's Climate Leadership Plan. The United Nations Framework Convention on Climate Change annual Conference of the Parties (COP21) is set to begin November 30, 2015, and many premiers will be accompanying Prime Minister Trudeau, including premiers from Ontario, Alberta, British Columbia, Manitoba, Quebec, P.E.I. and Nunavut. It will be interesting to follow how the federal government attempts to fold a variety of sub-national GHG emission reduction committees into a comprehensive federal commitment.

NEWSALERT

NEWS ALERT

If you have any questions regar-ding the matters discussed in this memorandum, please contact the following attorneys or call your re-gular Carey contact.

DirectorFernando García

+56 2 2928 [email protected]

Senior Patent and Regulatory Specialist

Alejandra Del Río


Associate José Santos Ossa


Associate Ignacio Gillmore

[email protected] +56 2 2928 2612

This memorandum is provided by Carey y Cía. Ltda. for educational and informational purposes only and is not intended and should not be construed as legal advice.

Isidora Goyenechea 2800, 43rd Floor Las Condes, Santiago, Chile.

Carey y Cía. Ltda.

www.carey.cl

December, 2015

New restrictions on the advertising of pharmaceutical products

On December 5, 2015, Supreme Decree No. 01 of the Ministry of Health (S.D. No. 01/2015) –which modifies Supreme Decree No. 466, of 1984, Regulations for Phar-macies, Pharmaceutical Wholesalers, Pharmaceutical Stores, Medicine Cabinets and Authorized Deposits, No. 405, of 1983, Regulations for Controlled Drugs, and No. 03, of 2010, Pharmaceutical Products Regulations– was published.

Through this Supreme Decree, the Ministry of Health has modified several provisions regarding the commercialization of pharmaceutical products contained in various normative bodies, including:

• Prescription and expenditure or sale of pharmaceutical products to the public• Exhibition and sale of direct sale products in pharmacies• Fractioning of medicine packages• Pharmacies shifts• Price information in pharmacies• Advertisement and promotion of pharmaceutical products

Please be aware that S.D. No. 01/2015 includes important modifications concer-ning advertisement and promotion of pharmaceutical products in S.D. No. 03/2010, including:

1. Previously authorized advertisement and promotion

The first paragraph of article 200 of S.D. No. 03/2010 is replaced by a new provision which includes a requirement to obtain prior authorization from the ISP for every ad-vertisement regarding the direct sale of pharmaceutical products, with an obligation to, “reproduce the exact content, partial or complete, of the informative brochures for patients and labeling, authorized in the relevant sanitary registration”.

2. No more announcements for professionals

Paragraph two of article 201, which used to authorize announcements for profes-sionals regarding the existence and introduction of a pharmaceutical product in the market, has been eliminated.

3. Extension of liability for non authorized advertisement

In order to increase the prohibitions and obligations regarding promotion of pharma-ceutical products, a new article 207 A has been added to S.D. No. 03/2010, through which the liability derived from unauthorized advertisement is extended beyond the holder of the sanitary registration, including, “every person or entity that participates in the diffusion of such advertisement and without which the same would not be possible”.

IPO | CHINA | 7 DECEMBER 2015

client alert

CHINESE SECURITIES REGULATOR RELEASES AMENDED DRAFT IPO RULES FOR PUBLIC COMMENT

BACKGROUND

On November 6, 2015, the Chinese Securities Regulatory Commission (“CSRC”) released draft

amendments to its initial public offering and stock listing measures for the main boards and

Growth Enterprise Markets to seek public comments.

The two laws under consideration for amendment are the:

Administrative Measures for Initial Public Offering and Listing of Stocks (“Main Board IPO

Measures”); and

Administrative Measures for Initial Public Offering and Listing on the Growth Enterprise

Market (“GEM Board IPO Measures”).

This Client Alert highlights the main changes made and their potential impact on foreign

investors. As the draft amendments are still in the public comment stage, none of the changes

discussed herein have been implemented or are in effect.

ANALYSIS

Main changes

The draft amendments remove the condition of independence from listing conditions, which

means that the issuers no longer need to pass the CSRC’s review of their independence

(including non-competition and transactions with related parties issues).

Independence no longer required as listing condition

Under the Main Board and GEM Board IPO Measures, the issuer must have an integral

business structure and the ability to operate in the market “independently” – that is, it must

have intact assets, independent personnel, financial independence, organisational

independence, and business independence. These requirements have been removed in the

draft amendments, and thus the CSRC will no longer verify an issuer’s independence.

.

| 2


However, issuers seeking listing on the Main Board must still disclose in their prospectus the

following information: separation of assets, personnel, financing, organisation, and business

with their controlling shareholder, de facto controller, and entities under the issuer’s control.

They must also explain whether they have an integral business structure and the capacity to

operate in the market independently. Issuers seeking listing on the GEM Board are not

required to disclose such information in their prospectus.

Non-competition and related-party transactions no longer required as listing conditions

Under the Main Board and GEM Board IPO Measures, the issuer may not have any competing

business or “obviously unfair” related-party transaction with its controlling shareholders, de

facto controller, or entities under the issuer’s control. This requirement has also been removed

in the draft amendments. The CSRC will no longer verify the non-competition and related-party

transaction issues of an issuer.

However, issuers must still disclose details about any competition between them and their

controlling shareholder, de facto controller, and entities under their control, as well as any

related-party transaction issues, in their prospectus. They must also disclose measures to deal

with such matters.

Impact on foreign investor's investment in China

While the draft amendments remove independence, non-competition and related-party

requirements from listing conditions, it does not mean that issuers no longer need to clear its

competition or related-party transaction issues before IPO if such issues may harm the

interests of the listing company or minority shareholders.

To supervise the independence of listing companies, the CSRC intends to reinforce disclosure

requirements instead of carrying out a substance review. It also remains to be seen to what

extent the independence requirement will actually be relaxed in follow-up implementing rules

issued by the CSRC or Chinese stock exchanges.

Once these changes are implemented, foreign investors may be impacted in several ways:

IPOs of foreign-invested enterprises (“FIEs”) in China

The strict prohibition of non-competition between an issuer and its controlling shareholder

effectively bars many foreign-controlled FIEs (e.g. a multinational company’s affiliate in China)

from launching an IPO in China. The shareholder of a FIE which (or the shareholder’s

subsidiaries in other countries) which has the same or similar business in other parts of the

world that may compete with the FIE’s business in China would first need to restructure its

business globally to ensure no competition between them before its IPO. Such restructuring is

costly and time-consuming, and may not even be feasible for a multinational company. After

the independence requirement is removed from listing conditions, multinationals may have the

option of listing part of their businesses in China.*

Acquisition of domestic companies in China

Foreign investors, when acquiring a domestic company that intends to launch an IPO in the

future, are often requested to undertake to exit from the company before the IPO if they or their

subsidiaries have the same or similar business that will compete with the company’s business.

Some foreign investors may even be forced to abandon their acquisition project because of the

undertaking requirement. The removal of the independence requirement from listing conditions

may ease foreign investors’ acquisitions of pre-IPO domestic companies.*

* Subject to the filing requirements and position on non-compete issues of the stock exchanges if IPO

registration system is implemented in China

BEIJING | Unit 01, Fl. 15, Tower B Parkview Green Tower - No. 9, Dong Da Qiao Road - Chaoyang District - Beijing 100020 - P.R.C. | tel. +86 10 6597 4511 | [email protected] HONG KONG | Suite 3701, Edinburgh Tower, The Landmark, 15 Queen's Road Central - Central, Hong Kong SAR - P.R.C. | tel. +852 2536 9110 | [email protected] SHANGHAI | Suite 2008, Shui On Plaza, 333 Huai Hai Zhong Road - Shanghai 200021 - P.R.C. | tel. +86 21 5306 8899 | [email protected] PARIS | 22, cours Albert 1

er - 75008 Paris - France | tel. +33 (0)1 40 75 60 00 | [email protected] - gide.com


Acquisition of shares in a listed company in China

Under the Administrative Measures for the Takeover of Listed Companies, when a foreign

investor intends to purchase more than 20% of the issued shares in a listed company (or if less

than 20%, in case the foreign investor will become the largest shareholder or actual controller

of the listed company), the foreign investor must disclose whether there is any competition

between it and the listed company. If there is, it must also disclose whether arrangements have

been made to avoid competition and maintain the independence of the listed company. While

the draft amendments of the Main Board and GEM Board IPO Measures concern only IPOs, if

independence is removed from mandatory listing requirements, the requirements for foreign

acquisition of Chinese listed companies may also be released to a similar extent.

COMMENTS

The draft amendments to the Main Board and GEM Board IPO Measures constitute an

important step in the PRC for encouraging companies to list. The contemplated changes

further indicate that Chinese authorities intend to reform the IPO system from regulatory

verification to simple registration. All parties are now waiting for more detailed implementing

rules to see how much impact the draft amendments may have in practice.

You can also find this legal update on our website in the News & Insights section: gide.com

This newsletter is a free, periodical electronic publication edited by the law firm Gide Loyrette Nouel (the "Law Firm"), and published for Gide’s clients and business associates. The newsletter is strictly limited to personal use by its addressees and is intended to provide non-exhaustive, general legal information. The newsletter is not intended to be and should not be construed as providing legal advice. The addressee is solely liable for any use of the information contained herein and the Law Firm shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the addressee. In accordance with the French Data Protection Act, you may request access to, rectification of, or deletion of your personal data processed by our Communications department ([email protected]).

CONTACTS

Beijing

THOMAS URLACHER

[email protected]

GUO MIN

[email protected]

Hong Kong

GILLES CARDONNEL

[email protected]

Shanghai

ANTOINE DE LA GATINAIS

[email protected]

FAN JIANNIAN

[email protected]

Paris

CHARLES-HENRI LEGER

[email protected]

GUILLAUME ROUGIER-BRIERRE

[email protected]

STEPHANE VERNAY

[email protected]

DAVID BOITOUT

[email protected]

http://www.gide.com/en

mailto:[email protected]

NEWS DETAIL 25/11/2015

NEW MINISTER OF MANPOWER REGULATION ON PROCEDURE FOR THE

UTILIZATION OF FOREIGN MANPOWER

The Minister of Manpower (“MOM”) has amended MOM Regulation No. 16 of 2015

regarding Procedure for the Utilization of Foreign Manpower (“Reg. 16”), by issuing

MOM Regulation No. 35 of 2015 (“Reg. 35”). MOM Regulation 35 regarding

Amendment to MOM Regulation 16 has been in effect as of 23 October 2015.

Reg. 35 brings, among others, the following changes in the provisions regarding the

employment of foreign nationals:

The IMTA, RPTKA, and NPWP requirements for Non-Resident BOD and BOC and

members of Trustee, Management and Supervisory Board, are no longer in

effect.

The provision under the old Reg. 16 which requires companies and foundations

to have the so-called RPTKA (Foreign Manpower Utilization Plan) and IMTA

(Permit to Employ Foreign Manpower) if they have non-resident foreign directors

and commissioners (in the case of companies) or foreign Trustee, Management

and Supervisory Board members (in the case of foundations or yayasan), has

been removed by Reg. 35.

In addition, the MOM and the Directorate General of Taxation verbally confirmed

that the above mentioned non-resident officers are no longer required to obtain

an NPWP (taxpayer registration number). Previously, the NPWP was required if

the period of work of the respective foreign manpower exceeded 6 months, in

which based on our discussion with the MOM by that time shall be evidenced by

the IMTA.

Prohibition for Domestic Capital Investment Companies from appointing

foreigners as Commissioner

Reg. 35 expressly stipulates that PMDNs (Perusahaan Penanaman Modal

Dalam Negeri or Domestic Capital Investment Companies) are prohibited from

appointing foreign nationals as commissioner.

The requirement to employ Indonesians for every foreigner employed is no

longer in effect

Reg. 35 removes the requirement under Reg. 16 to employ 10 Indonesian

nationals for every foreign national employed, and as confirmed from our further

discussion with the MOM, no such ratio requirement shall be required.

Change in the types of activities qualified for Temporary RPTKA and IMTA

The list of work activities which are qualified for Temporary RPTKA and IMTA

has been revised to the following:

a. making commercial films, provided that the permit from the authorized

agency has been obtained;

b. performing audits, production quality control, or inspection of the

company’s branches in Indonesia for a period of more than 1 month; and

c. conducting work related to machine installation, electrical installation, after

sales services, or trial products.

As a result of the above, the following activities which were in the old list under

Reg.16 have been removed from the list by Reg. 35:

a. providing guidance, counseling, and training in industrial technology

application and innovation for the purpose of improving product quality and

design and enhancing overseas marketing cooperation;

b. giving lectures;

c. attending meetings held by the head office or representative office in

Indonesia;

d. testing the work capability of foreign workers; and

e. performing work which can be completed within one time frame.

Foreign Manpower Employment Compensation Fund or Dana Kompensasi

Penggunaan Tenaga Kerja (“DKP-TKA”) Payment

One of the notable provisions under Reg. 35 with regard to DKP-TKA payment is the

removal of the obligation to make such payments in Rupiah, as previously required by

Reg. 16. Other than that, Reg. 35 stipulates that any DKP-TKA payment which has

been made for:

• non-resident foreign directors and commissioners or foreign Trustee,

Management and Supervisory Board members; and

• temporary IMTA for the activities that have been removed by Reg. 35,

will not be refunded.

As a general remark, it is of note that the MOM has implemented a via-Skype

interview mechanism with the management of a sponsoring company in order to help

the MOM in verifying the RPTKA application which has been submitted. (by: Priscilla

Rotua Manurung)

© ABNR 2008 - 2015

Page | 1

RE-ENGINEERING THE PROFESSION

Datin Faizah Jamaludin highlights some key amendments to the laws that regulate the engineering profession in Malaysia

On 31 July 2015, the Registration of Engineers (Amendment) Act 2015 came into force,

amending the Registration of Engineers Act 1967 (“Act”). On the same day, the Registration of

Engineers Regulations 1990 (“Regulations”) were amended to supplement the amended Act.

These amendments come in the wake of efforts to liberalize one of a myriad of service sectors in

Malaysia. To truly appreciate the impact of the amendments to the Act and Regulations, one

should first know the motivations behind it.

LAYING THE GROUNDWORK

The Trade, Commerce and Economic Ministers (“Economic Ministers”) of the Member States of

the Association of Southeast Asian Nations (“ASEAN”) signed the ASEAN Framework Agreement

(“AFAS”) on Services in Bangkok in 1995, in pursuit of the common goal of creating the ASEAN

Economic Community (“AEC”). The objectives of AFAS are threefold:

(1) to enhance cooperation in services amongst Member States in order to improve the

efficiency and competitiveness, diversify production capacity and supply and distribution of

services of their service suppliers within and outside ASEAN;

(2) to eliminate substantially restrictions to trade in services amongst Member States; and

(3) to liberalise trade in services by expanding the depth and scope of liberalisation beyond

those undertaken by Member States under the General Agreement on Trade in Services

(GATS), with the aim to realising a free trade area in services.

In furtherance of these objectives, further meetings were held between the Economic Ministers

of ASEAN to monitor the progress of the Member States and continuously discuss strategies and

commitments which the Member States would undertake to achieve the AFAS objectives. One of

the more notable meetings was the 37th ASEAN Economic Ministers’ Meeting, which was held in

Vientiane in 2005, ten years after AFAS was signed. It was at this meeting that the Economic

Ministers collectively agreed that the deadline for the liberalisation of all services sectors

(including the engineering sector) would be 2015.

We are now approaching the end of 2015, and the foundation laid at the signing of AFAS in 1995

is being built upon in various service sectors in Malaysia.

Page | 2

The amended Act and Regulations represent the beginning of these changes in the engineering

services sector in Malaysia. The changes within the Act and the Regulations which are likely to

have the most impact on the engineering profession in Malaysia can be divided into three broad

categories, as detailed below.

REINVENTING THE ENGINEER

“New” engineers, new responsibilities

While the Act previously recognized and regulated only Professional Engineers, Graduate

Engineers and Engineering Consultancy Practices (“ECP”), the amended Act adds three

categories of engineers, namely Engineering Technologists, Accredited Checkers and Inspectors

of Works, who may be registered with the Board of Engineers Malaysia (“BEM”) and whose

services are regulated by the Act. Such persons are required to hold a “qualification recognized

by BEM”, but neither the Act nor the Regulations clarify what these qualifications are.

The amended Act also divides the old “Professional Engineer” class into two categories: a

Professional Engineer with Practising Certificate and a Professional Engineer (without a Practising

Certificate). A Professional Engineer obtains his Practising Certificate by sitting for the

examinations set by BEM. There is, however, a redeeming clause in the new Section 10D(2)

which provides that all existing Professional Engineers may apply to become Professional

Engineers with Practising Certificate without having to sit for the required examinations.

Directly related to the above is the amended Section 8 of the Act which now states that only a

Professional Engineer with Practising Certificate or an ECP providing professional engineering

services in Malaysia, shall be entitled to submit plans, engineering surveys, drawings, schemes,

proposals, reports, designs or studies to any person or authority in Malaysia. Professional

Engineers may no longer do so; they may only submit plans or drawings where such plans or

drawings are in relation to an equipment, a plant or a specialised product invented or sold by him

or his employer.

One immediate effect of this is that Professional Engineers (and engineers who are part of an

ECP) must now obtain their Practising Certificates in order to do those things which they would

previously simply have been able to do in their capacity as Professional Engineers. For instance,

it would seem that in order to submit building plans to local authorities for the purposes of the

Street, Drainage and Building Act 1974, one must be a Professional Engineer who has obtained

his Practising Certificate from BEM. Similarly, the Certificate of Completion and Compliance

required to certify the safety of new buildings may not be issued by an engineer unless he is a

Professional Engineer with Practising Certificate.

Page | 3

The expatriate engineer

Arguably, the biggest change to the registration of engineers is the removal of the nationality

requirement to be a Professional Engineer registered with BEM. Under the old Act, only citizens

and permanent residents of Malaysia could be registered with BEM as Professional Engineers.

The amended Act now allows a person of any nationality to be registered as a Professional

Engineer with BEM provided that he meets all the relevant requirements stipulated in the Act and

Regulations and has been residing in Malaysia for at least six months prior to his application for

registration.

A new kind of ECP

A direct impact of the relaxation of the nationality requirement is that ECPs may now apparently

be owned by foreign persons and/or foreign bodies corporate. However, this is not to say that any

person may set up and run an ECP. The Act and Regulations provide that:

(1) at least two-thirds of the directors of an ECP must be Professional Engineers with

Practising Certificates; and

(2) at least seventy per cent of the share equity of an ECP must be held by Professional

Engineers with Practising Certificates; the remaining share equity may be held by any

person or body corporate.

It is not clear as yet whether a body corporate consisting entirely of Professional Engineers with

Practising Certificates may count towards the seventy per cent share equity requirement.

The amended Regulations also dictate that an ECP must have a minimum paid-up capital of

RM50,000 whilst the amended Act requires the day-to-day affairs of an ECP to be under the

control and management of a person who is:

(1) a Professional Engineer with Practising Certificate; and

(2) authorized under a resolution of the board directors to make all final engineering decisions

on behalf of the ECP in respect of the requirements under the Act or any other law relating

to the supply of professional engineering services by an ECP.

GAME CHANGER?

The liberalization of the engineering services sector is likely to be good for Malaysia’s economy in

the long term, for two main reasons.

Page | 4

Raising the Game

Firstly, the relaxation of the nationality requirement removes a significant barrier to entry for

talented foreign engineers to the Malaysian market for engineering services. This will increase

competitiveness within the engineering services sector, while simultaneously exposing local

engineers to the capabilities and standards of engineers outside of Malaysia, consequently

raising the standards for Malaysian engineers.

Raising the Stakes

Secondly, the fact that foreign persons and foreign bodies corporate may now hold equity in an

ECP is likely to encourage foreign investment in the Malaysian engineering scene. We may see

state of the art technology being brought to Malaysian shores in future, which local engineers

may learn from or capitalize on to speed up innovation in the domestic engineering scene.

CONCLUSION

It may be presumptuous at this early stage to assume that we will observe these benefits

immediately, or even in the near future. However, given the nature of the professional

engineering services sector, we are likely to see the beneficial effects of the amended Act and

Regulations spill over to other economic sectors within the country.

As more and more ASEAN Member States liberalize their engineering services sector, we are

more likely to see development and innovation in the engineering sector increase at a rapid rate

over the next decade or so. Applied correctly, this opportunity for learning and foreign investment

will push us closer towards achieving the AFAS objectives, the ASEAN goal of the AEC, and our

own ideal of a truly modernized Malaysia.

The liberalisation of the engineering services sector in other ASEAN Member States will give

Malaysian engineers the opportunity to export their services and bring economic benefits to the

country through foreign exchange earnings.

DATIN FAIZAH JAMALUDIN ([email protected])

Faizah is a Partner in the Corporate Division of Skrine. She is the Head of the Competition Law and the

Oil and Gas and Utilities Practice Groups.

Faizah extends her appreciation to Caroline Leong and Karyn Khor, pupils in Skrine, for their

assistance in writing this article.

1

L E G A L U P D A T E

November, 2015

MINIMUM TECHNICAL CONDITIONS FOR INTERCONNECTION

On November 5, 2015, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, “IFT” for its acronym in Spanish), published in the Official Gazette of the Federation (“DOF” for its acronym in Spanish), the Resolution in which the minimum technical conditions for interconnection between concessionaires operating public telecommunications networks are published.

As part of its authorities, the IFT has the obligation to publish during the last quarter of the year, the minimum technical conditions for interconnection, which will be applicable to all concessionaires operating public telecommunications networks who are interested in interconnection with other networks through the execution of the relevant agreement (article 137 of the Federal Law on Telecommunications and Broadcasting “LFTR”).

The LFTR establishes that the following interconnection services are compulsory for the economic preponderant agent, and that the services mentioned in numerals I to VI are compulsory for other concessionaries:

I. conduction of traffic, including origination and termination, as well as calls and short message services;

II. transmission links;III. access ports;IV. signalling;V. transit;VI. collocation;VII. infrastructure sharing;VIII. related support; andIX. billing and collection.

In case you require additional information, please contact the partner responsible of your account or any of the following attorneys:

Mexico City office: Mr. Jorge León-Orantes B., [email protected] (Partner) Mr. Carlos Díaz S., [email protected] (Associate) Phone: (52 55) 5279-5400

Monterrey office: Mr. Jorge Barrero S., [email protected] (Partner) Phone: (5281) 8133-6000

Tijuana office: Mr. Aarón Levet V., [email protected] (Partner) Phone: (52 664) 633-7070

Queretaro office: Mr. José Ramón Ayala A., [email protected] (Partner) Phone: (52 442) 290-0290






Cartel criminalisation cancelled

December 09, 2015

Contacts

Partners Anne Callinan (http://www.simpsongrierson.com/people/anne-callinan), James Craig

(http://www.simpsongrierson.com/people/james-craig)

Senior Associates Alicia Murray (http://www.simpsongrierson.com/people/alicia-murray)

The Government announced yesterday that cartel conduct will not be criminalised under the proposed Commerce (Cartels and Other Matters) Amendment Bill (known as the Cartels Bill).

Previous FYIs have provided information on the changes proposed by the Cartels Bill (What does the

Cartel Bill mean for your business? (/articles/2013/what-does-the-cartel-bill-mean-for-your-

business) and Cartel Bill: report back from the Select Committee (/articles/2013/cartel-bill-

report-back-from-the-select-committee)). The change that received the most publicity was the

introduction of criminal penalties for cartel conduct. Yesterday's announcement is a significant

change in position from the Government.

Potential chilling effect cited as reason for change

The Minister of Commerce and Consumer Affairs, Paul Goldsmith, cites the potential that cartel

criminalisation would have a chilling effect on pro-competitive behaviour as a reason for the change.

Mr Goldsmith said that the goal is legislation "that promotes healthy competition giving consumers

confidence and choice".

Mr Goldsmith commented: "The criminalisation of cartels has remained an issue of major contention

with the Bill. I have re-examined the case for criminalisation, and on balance I have recommended that

the criminalisation provisions be removed". Mr Goldsmith noted that cartel behaviour "will continue to

be subject to civil sanctions, and these are strengthened in the Bill".

Under the current law, businesses that engage in cartel conduct already face sanctions of up to

$10 million, or three times the commercial gain resulting from the conduct, or 10% of annual turnover

- whichever is the greater number. It is yet to be seen how these civil penalties will be strengthened as

stated by the Minister.

Cartels Bill will still impact significantly on New Zealand competition law

The Bill will still introduce significant changes into New Zealand competition law. Whereas currently

only price fixing automatically breaches the Commerce Act, under the Bill this will be expanded so

that price fixing, output restrictions and market allocation are all considered "cartel conduct" that

automatically breaches the Act.

The Bill also introduces an exemption for cartel conduct for "collaborative activity" that is broader

than the current joint venture exemption. Businesses will also be able to seek clearance from the

Commerce Commission for any proposed collaborative activities, similar to the clearance regime

currently operated by the Commission for acquisitions. This will give businesses certainty that

proposed collaborative activities will not fall afoul of the Commerce Act.

Where to for shipping?

Another important change proposed in the Cartels Bill was to allow international shipping to be

covered by the Commerce Act. Indications were that debate over this issue was one of the causes of

the delay in the passing of the Cartels Bill. Interestingly there was no mention of shipping in the

Minister's announcement yesterday.

Cartels Bill on track to become law in 2016

Mr Goldsmith says he will shortly introduce a supplementary order paper to the House to give effect to

these changes. Mr Goldsmith announced that Act and United Future have agreed to support these

changes to the Bill, allowing it to progress through its final stages in the House. On this basis the Bill

should come into force in 2016.

If you have any questions about the Cartels Bill please contact one of our authors.

Competition law - reform and updates (inc Cartel Bill) (/resources/competition-law-reform-and-updates-inc-cartel-bill)

Contributors [email protected]

(mailto:[email protected])

Proposal of Draft Amendment to the Design Patent Substantive

Examination Guidelines Announced by the Intellectual Property Office

11/30/2015

Massenet Kang‐Chi Liang

The Intellectual Property Office (IPO) announced a proposal of draft amendment to the Design Patent Substantive

Examination Guidelines ("the Guidelines") on 2 November 2015 and will initiate public hearings to further discuss the

proposal. The main changes proposed in the draft amendment are as follows:

I) Adding the following provisions to Section 1, Chapter 1 of the Guidelines, entitled "Principles of Disclosures for the

Specification and Drawings":

(1)If the design patent application does not claim a color(s), the drawings should be presented by ink drawings,

greyscale computer graphics or black‐and‐white photos.

(2)The boundary is a virtual imaginary line and belongs to the portion not claimed in the design patent application.

II)Adding the following provisions to Chapter 6 of the Guidelines, entitled "Amendments, Post‐grant Amendments and

Correction of Translation Errors":

(1)The patent scope of a design patent is determined by "the portion claimed in the design application" illustrated in the

drawings. Such patent scope can be adjusted by amendments based on the disclosure of the as‐filed specification and

drawings of the design patent application.

(2) If the drawings cannot clearly differentiate "the portion claimed in the design patent application" from "the portion

not claimed in the design patent application," amendments with an added boundary in the form of broken lines, such as

a dot‐dash line, can be made for the purpose of confirming the boundary of the scope.

III)Adding the following provisions to Chapter 7 of the Guidelines, entitled "Division and Conversion of Patent

Applications ":

(1)The applicant can file a divisional application(s) to cover the design(s) which is/are disclosed in the as‐filed

specification or drawings but not claimed in the patent application, such as the one(s) disclosed in the reference views,

or to cover the design(s) which is/are clearly illustrated by the broken lines.

www.leeandli.com

The FAST Act: What Does It Mean To You?

11 December 2015

Updates

On December 4, 2015, President Obama signed into law the Fixing America’s Surface Transportation Act, or the “FAST Act.” Although most of its 1,300 plus pages address matters relating to transportation and infrastructure, the FAST Act provides important changes to rules governing access to the capital markets and reporting under SEC regulations. The full text of the legislation can be found here.

The changes that we find most interesting include the following:

Improving the IPO Process for Emerging Growth Companies

1. Initial Filing of IPO Registration Statement May Omit Financial Statements That Will Not Be Included In the Final Prospectus. Before the FAST Act, an Emerging Growth Company, or EGC, was required to include at least two years of audited financial statements in its IPO registration statement, even if the financial statements for the earlier of the two years would not ultimately be required to be included in the prospectus used in the IPO. Under Section 71003 of the FAST Act, an EGC may omit historical financial information otherwise required to be included in an IPO registration statement by Regulation S-X if the EGC “reasonably believes” that financial information for a given historical period will not be required to be included in the registration statement at the time of the “contemplated offering.” Prior to the launch of the IPO, the EGC must amend its registration statement to include all historical financial information required at the time of such amendment. The change is effective 30 days after enactment of the law (January 3, 2016), and the SEC is charged with amending the instructions to Form S-1 and Form F-1 by such date to reflect this change.

What does this mean for our clients? This new law could save significant time and expense by avoiding preparation and inclusion of financial statements for historical periods that will not ultimately be required to be included in the prospectus used in the IPO. For example, there might be an EGC that decides to make its first filing of its IPO registration statement in the third quarter of 2015. Currently, this EGC would be required to include 2013 and 2014 financial statements. Under the FAST Act, if this EGC reasonably believes that its IPO will

Ideas

launch after the date on which 2013 audited financials are no longer required to be included in the registration statement (i.e., after February 16, 2016), then the EGC could omit 2013 financial statements from the registration statement all together (i.e., the first few filings of the registration statement would only include 2014 financial statements). This EGC would amend the registration statement to include 2015 financial statements when they became available in the first quarter of 2016 and with sufficient time for the Staff of the SEC to review the new financial statements in advance of the launch of the IPO. In the meantime, this EGC would have advanced the SEC review process and avoided spending time and money on an audit of the 2013 financial statements. When the SEC amends Forms S-1 and F-1, it may impose additional requirements on this process.

2. EGCs Can Keep The S-1 Confidential Longer. Currently, an EGC that has submitted its IPO registration statement confidentially must file that registration statement publicly at least 21 days before commencing the IPO roadshow. Section 71001 of the FAST Act shortens this time period to 15 days. This change is effective upon enactment of the law.

What does this mean for our clients? The public filing of an IPO registration statement by an EGC is often viewed as a clear signal of the timing of the IPO. The shorter time period during which the registration statement is required to be public may limit the time during which the market will speculate before the launch of the roadshow. It may also provide the issuer with a greater ability to access available market “windows,” as it is not uncommon for the 21-day public filing requirement to be the gating item for launching an offering that has otherwise substantially completed the SEC review process.

3. An EGC Has a Grace Period If It Loses EGC Status During the IPO Process.Currently, if the IPO registration process for an issuer who qualifies as an EGC at the time it first filed or confidentially submitted its IPO registration statement crosses a fiscal year end and the issuer had $1 billion of revenue in the recently completed fiscal year, then the issuer will no longer be considered an EGC and will be unable to take advantage of the related benefits of an EGC during the rest of the IPO registration process. Section 71002 of the FAST Act provides that an issuer that was an EGC at the time it first filed or confidentially submitted its IPO registration statement, but subsequently lost its EGC status will, during a grace period, still be treated as an EGC. The grace period ends on the earlier of (i) the consummation of the issuer’s IPO under the relevant registration statement or (ii) one year after the issuer ceased to be an EGC. This change is effective upon enactment of the law.

What does this mean for our clients? This amendment will only impact the subset of IPO issuers that is close to the line in terms of qualifying as an EGC or experience a significant increase in revenues during the registration process. In these cases, this amendment will provide EGCs with a greater degree of certainty while working through the IPO registration process with the SEC. We note, however, that the FAST Act specifically amends Section 6(e)(1) of the Securities Act, which deals with confidential submissions by EGCs. It is not yet clear whether its application will ultimately be limited to an EGC’s ability to

make confidential submissions or will be applied more broadly to other advantages given to EGCs in the IPO registration process.

New Resale Exemption

4. New Exemption for Private Resale of Restricted Securities. Currently, Section 4(a)(2) of the Securities Act provides a statutory exemption for private sales of securities by the issuer if certain conditions are met. Although practice and legal doctrine has developed that provides comfort around certain private resales of securities by persons other than the issuer (i.e., the “4(a)(1 1/2) exemption”), no express statutory exemption existed. The FAST Act establishes a new statutory exemption from registration for private resales of control and restricted securities under Section 4(a)(7) of the Securities Act. To qualify for the exemption, the transaction must satisfy certain conditions, including participation only by accredited investors, no general solicitation, provision of certain financial and other information, no offering by the issuer and no “bad actor” involvement. The issuer must be “engaged in business” and not in the organizational stage or in bankruptcy, and the securities sold must be of a class of securities that have been outstanding for more than 90 days. Securities sold under Section 4(a)(7) will be “restricted securities” for purposes of Rule 144 and “covered securities” under the Securities Act that are exempt from certain aspects of state “blue sky” regulation. This amendment is effective upon enactment of the law.

What does this mean for our clients? The new statutory exemption should make transfers of unregistered securities easier to accomplish. This should help facilitate the market for the securities of private companies by providing an additional method for resales of restricted securities, and may also increase the potential investor base for public companies seeking to use privately placed securities for capital raising activities in lieu of accessing the public markets.

Simplifying the Process for Smaller Reporting Companies Using Form S-1

5. Smaller Reporting Companies May Forward Incorporate by Reference in Form S-1. Currently, a shelf registration statement on Form S-1 does not automatically incorporate Exchange Act filings made by the issuer after the effective date of the shelf registration statement. In other words, Form S-1, unlike Form S-3, does not permit “forward incorporation by reference.” In order to keep a shelf registration statement on Form S-1 current and incorporate subsequent Exchange Act filings, an issuer must frequently file prospectus supplements or amendments to the Form S-1 (some of which have to be declared effective by the SEC). This is a burdensome process, particularly for those smaller issuers who do not qualify to use Form S-3. Under Section 84001 of the FAST Act, the SEC must revise Form S-1 to permit a “smaller reporting company” (generally defined as an issuer with a public float of less than $75 million as of the last business day of its most recently completed second fiscal quarter) to automatically incorporate by reference Exchange Act filings made by the issuer after the effective date of the registration statement. The SEC is charged with revising Form S-1 to reflect this change within 45 days after enactment of the law.

What does this mean for our clients? Adding the feature of forward incorporation by reference to Form S-1 registration statements provides one of the key benefits of Form S-3 to a group of issuers that are not large enough to qualify to use Form S-3. This will result in significant time and cost savings for smaller reporting companies that seek to maintain a shelf registration statement in order to access the capital markets. It may also make PIPEs and other private placements more accessible to smaller reporting companies as they can more easily provide investors with a resale registration statement following the private placement.

Simplifying Disclosure Requirements and Revisiting Regulation S-K

6. Issuers May Submit Summary Pages with Form 10-K. Section 72001 of the FASTAct requires the SEC to issue regulations within 180 days after enactment permitting all registrants to submit a summary page with their Annual Report on Form 10-K that provides cross-references to the more detailed discussion in the body of the Form 10-K. The cross-reference may include a hyperlink to the applicable section of the Form 10-K.

What does this mean for our clients? This change will impact all reporting companies, whether large or small. Until the SEC regulations are published, it is hard to predict exactly how brief the summary will be and whether registrants will take advantage of the option to include the summary pages with their Form 10-K. If registrants adopt the practice, it would not be surprising for the summary to become, to some extent, a marketing or investor relations tool (similar to the summary sections of CD&A a few years ago).

7. SEC is Charged with Simplifying Regulation S-K. The FAST Act requires the SECto simplify Regulation S-K and eliminate duplicative or unnecessary requirements. The FAST Act also requires the SEC to conduct a study of ways for issuers to provide material information to investors at reduced costs. The SEC is charged with issuing the regulations within 180 days after enactment of the law and submitting the results of its study to Congress within 360 days after enactment of the law.

What does this mean for our clients? There is clearly a focus on both simplifying disclosure so that it will be more easily understood by investors and reducing the burdens on smaller issuers such as EGCs and smaller reporting companies. It remains to be seen what changes will result from these “simplification” requirements, how quickly those changes will be implemented by the SEC and whether they will have a meaningful impact on the compliance costs of issuers.

12.01.15

By Jason T. Froggatt

If you have recently received a notice from the U.S. Department of Labor (DOL), titled

“Tips for Selecting and Monitoring a Plan Auditor,” do not be alarmed. It does not mean that you are being audited by the

DOL and it does not mean that you have done anything wrong. These notices are addressed to the Plan Administrator and

specifically name the plan, but they are not an investigation or enforcement action. They do not require action on your part

and they do not indicate that your plan is at special risk of an investigation or enforcement action. Instead, these notices

are part of the DOL’s ongoing outreach efforts with respect to audit quality.

In May 2015, the DOL released a report titled, “Assessing the Quality of Employee Benefit Plan Audits,” which found that

almost 40% of plan audits had “major deficiencies.” The report makes a number of recommendations, including increasing

DOL outreach and enforcement related to audit standards. The recent notice sent to Plan Administrators, providing tips for

selecting and monitoring plan auditors, was part of that DOL outreach. The notice also references the DOL’s pamphlet,

“Selecting an Auditor for Your Employee Benefit Plan.”

The notice encourages, but does not require, Plan Administrators to consider the following factors in selecting an auditor:

• The number of employee benefit plans the CPA audits each year, including the

types of plans;

• The extent of specific annual training the CPA receives in auditing plans;

• The status of the CPA’s license with the applicable state board of accountancy;

• Whether the CPA has been the subject of any prior DOL findings or referrals, or has

been referred to a state board of accountancy or the American Institute of CPA’s for

investigation; and

• Whether or not the CPA’s employee benefit plan audit work has recently been peer

reviewed by another CPA and, if so, whether the review resulted in negative

findings.

DOL Notice on Tips for Selecting and Monitoring an ERISA Plan Auditor Alarms Recipients – Fear Not!

Although the notice does not direct the Plan Administrator to take any action, a sensible follow-up (if you received

the notice) would be to forward it to your auditor with a request for a response. Your auditor should be able to

provide a written response that you can use to document the reasonableness of your auditor selection in

satisfaction of your fiduciary duties under ERISA. Even if you did not receive the notice, you can follow-up on the

DOL recommendations by reaching out to your auditor about the DOL findings and its tips for selecting an auditor. If

your auditor does not respond, or if you are not satisfied with the response from your auditor for any reason, you

should consider selecting a different auditor for the plan.

If you are considering engaging an auditor for your employee benefit plan(s), it may make sense to include the

information identified by the DOL in your requests for proposal to prospective auditors. You should document the

information you receive from prospective auditors, as part of your selection process.

DisclaimerThis advisory is a publication of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our

clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for

specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.

©1996-2015 Davis Wright Tremaine LLP. ALL RIGHTS RESERVED. Attorney Advertising. Prior results do not guarantee a similar outcome.

See note below about Hogan Lovells

SEC Update December 11, 2015

2016 proxy season: SEC staff issues important guidance on key shareholder proposal exclusions The SEC's Division of Corporation Finance recently issued Staff Legal Bulletin No. 14H (CF) (SLB 14H) to provide guidance on two significant interpretive issues under Exchange Act Rule 14a-8, which sets forth the requirements applicable to proposals submitted by shareholders for inclusion in their company’s annual proxy statement. The new guidance will govern staff action in the 2016 proxy season on company requests for the exclusion of shareholder proposals under two of the 13 substantive bases for exclusion contained in the rule. In SLB 14H, the staff announced positions that:

• Narrow the circumstances in which a shareholder proposal willbe deemed to “directly conflict” with a company proposal andthereby afford the company a basis for excluding the proposal inreliance on Rule 14a-8(i)(9)

• Reaffirm the staff’s long-standing approach to deciding whethera shareholder proposal that focuses on significant social policyissues precludes the company from excluding the proposalunder Rule 14a-8(i)(7) on the basis that it relates to thecompany’s “ordinary business operations”

SLB 14H is the most recent of several staff legal bulletins in which the staff has provided guidance on the requirements of Rule 14a-8. The bulletins highlight the need for companies and proponents to be sensitive to the staff’s evolving view of these requirements. SLB 14H can be found here.

Exclusion under Rule 14a-8(i)(9) of shareholder proposals that directly conflict with a company proposal

Background. Rule 14a-8(i)(9) permits a company to exclude from its proxy statement a shareholder proposal that “directly conflicts with one of the company’s own proposals to be submitted to the shareholders at the same meeting.” The staff historically has interpreted the rule to allow exclusion of a shareholder proposal if (a) management intends to include in the proxy statement a proposal addressing the same matter and (b) inclusion of both proposals would present “alternative and conflicting decisions for shareholders” and create the potential for “inconsistent and ambiguous results.”

Contacts

Peter J. Romeo (Co-editor)Washington, [email protected]+1 202 637 5805

Richard J. Parrino (Co-editor)Washington, [email protected]+1 202 637 5530

Todd M. AmanNorthern [email protected]+1 703 610 6104

C. Alex BahnWashington, [email protected]+1 202 637 6832

Laura A. BerezinSilicon [email protected]+1 650 463 4194

Alan L. DyeWashington, [email protected]+1 202 637 5737

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https://www.sec.gov/interps/legal/cfslb14h.htm

Companies have relied on this standard to exclude shareholder proposals that seek to implement a practice or policy which management concurrently proposes for a shareholder vote, but on different terms. For example, companies have been able to exclude shareholder proposals requesting action intended to enhance shareholder rights (such as approval of a bylaw allowing holders of a specified minimum percentage of the company’s voting securities to call a special meeting of stockholders) by including in the proxy statement a company proposal to establish a similar right, but containing different terms (such as a higher minimum ownership requirement for calling a special meeting).

During the 2015 proxy season, the staff’s interpretation of the exclusion was called into question by the response of many companies to a shareholder proposal seeking to implement “proxy access,” which would enable shareholders to include their own director nominees in the company’s proxy statement. These companies sought to exclude the proposal under Rule 14a-8(i)(9) by proposing to shareholders their own version of proxy access. After the staff issued a no-action letter to Whole Foods Market, Inc. early in the proxy season allowing it to exclude a proxy access proposal (avail. Dec. 1, 2014, recon. Jan. 16, 2015), SEC Chair Mary Jo White directed the Division of Corporation Finance to review the proper scope and application of Rule 14a-8(i)(9). As a result of this directive, the staff announced that it would express no views on the application of Rule 14a-8(i)(9) for the remainder of the 2015 proxy season.

New staff guidance. Following the mandated review, the staff issued guidance in SLB 14H that narrows the circumstances under which a shareholder proposal will be deemed to “directly conflict” with a company proposal for purposes of Rule 14a-8(i)(9). The staff noted that this exclusion was intended to prevent shareholders from using Rule 14a-8 to circumvent the stringent procedural and disclosure requirements that govern action by a shareholder soliciting proxies in opposition to a management proposal. Appealing to the rule’s history and this purpose, the staff concluded that a direct conflict will be deemed to exist only “if a reasonable shareholder could not logically vote in favor of both proposals, i.e., a vote for one proposal is tantamount to a vote against the other proposal.” The staff acknowledged that this formulation of the direct-conflict test might impose a “higher burden” on companies seeking to exclude a proposal than the prior formulation’s emphasis on “shareholder confusion and inconsistent mandates.”

According to the staff, a “direct conflict” between a shareholder proposal and a company proposal will be deemed to exist where, for example:

• a shareholder proposal asks shareholders to vote against a merger, while the company’s proposal seeksshareholder approval of the merger, or

• a shareholder proposal asks for the separation of the positions of company chairman and CEO, while thecompany’s proposal seeks shareholder approval of a bylaw provision requiring the CEO to serve aschairman at all times.

In contrast, the staff said that a “direct conflict” will be deemed not to exist where, for example:

• a shareholder proposal seeks to allow shareholders who have held at least 3% of the company’s stock forat least three years to nominate up to 20% of the company’s directors, while the company’s proposalwould allow shareholders who have held at least 5% of the company’s stock for at least five years tonominate up to 10% of the company’s directors, or

• a shareholder proposal asks the compensation committee to implement a policy that equity awards underan incentive plan will be subject to at least four-year annual vesting, while the company’s proposal seeksshareholder approval of an incentive plan that gives the compensation committee discretion to establishthe vesting provisions for equity awards.

In the latter case, according to the staff, a reasonable shareholder could logically vote for both proposals. The staff observed that the inclusion of competing proposals in a company’s proxy statement could result in shareholder approval of both proposals, which would require the board of directors to “consider the effects of both proposals” in assessing the outcome of the vote. The staff concluded, however, that the board’s decision on how best to proceed in these circumstances is not the kind of direct conflict the rule was intended to address.

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Significant social policy exception to exclusion under Rule 14a-8(i)(7) of shareholder proposals that relate to the company’s ordinary business operations

Background. Rule 14a-8(i)(7) permits a company to exclude a shareholder proposal that relates to the company’s “ordinary business operations.” The exclusion is based on the general principle of state corporate law that a corporation’s directors and officers, not its shareholders, are responsible for conducting the corporation’s day-to-day operations, and shareholders therefore should vote only on major corporate issues. The uncertainty regarding the scope of the exclusion, which has long been the subject of contention between the shareholder and corporate communities, and the case-by-case basis on which the staff applies the rule have resulted in frequent appeals to the courts to resolve disputes over the scope of the exclusion. Recent court decisions prompted the staff to issue guidance in SLB 14H on the exception to the exclusion that is afforded to proposals that raise “significant social policy issues.”

The SEC first articulated the “significant social policy” exception to the ordinary business exclusion in 1976. The exception is not contained in the rule itself, but has been developed in numerous no-action letters issued by the SEC staff. Under the exception, if a proposal that deals with ordinary operations “focuses” on “significant social policy issues,” it generally is not excludable, because such issues “transcend day-to-day business matters.” The scope of this exception has never been clear, particularly the extent to which the proposal must “focus” on a significant social policy. In some cases, even proposals that raise a significant social policy issue may be excludable under Rule 14a-8(i)(7) if the proposal implicates other ordinary business matters not related to the social policy issue.

The litigation that resulted in the recent guidance arose in a shareholder proponent’s challenge to the staff’s issuance in March 2014 of a no-action letter to Wal-Mart Stores, Inc. (avail. Mar. 20, 2014). The staff concurred that a proposal which, in substance, sought to require Wal-Mart’s board to develop and oversee guidelines governing Wal-Mart’s decision to sell certain products, particularly guns equipped with high-capacity magazines, was excludable under Rule 14a-8(i)(7). Wal-Mart noted in its letter to the staff that, although the staff previously had determined that proposals addressing issues of gun violence address significant social policy issues, the proposal received by Wal-Mart was not limited to matters concerning gun violence, but instead applied more broadly to other types of products as well.

The proponent subsequently petitioned a federal district court to enjoin Wal-Mart from distributing its proxy materials without including the proposal. The district court declined to enjoin Wal-Mart, but later held that the proposal was not excludable under Rule 14a-8(i)(7), because the proposal did not require that Wal-Mart cease selling certain products but rather asked the board of directors to oversee a policy that might affect the sales of certain products. The district court also held that the proposal raised a significant social policy issue (gun violence) and thus qualified for the exception to the ordinary business exclusion.

On appeal, the U.S. Court of Appeals for the Third Circuit reversed the district court, holding that the proposal was excludable because it was related to Wal-Mart’s ordinary business operations and did not fall within the significant social policy exception. The majority of the Third Circuit panel employed a two-part test to analyze the exclusion. It said that, for the significant social policy exception to apply, “a shareholder must do more than focus its proposal on a significant policy issue; the subject matter of its proposal must ‘transcend’ the company’s ordinary business,” and therefore that, in this analysis, the significant policy issue must be “divorced from how a company approaches the nitty-gritty of its core business.” The court’s two-pronged approach, which requires consideration of both the significance of the social policy issue and whether it transcends ordinary business operations, departs from the staff’s traditional one-step approach to the exception, which, as discussed below, treats the “significance” and “transcendence” determinations as interrelated, rather than independent, concepts.

New staff guidance. Although the Third Circuit agreed with the staff’s conclusion that the proposal submitted to Wal Mart was excludable under Rule 14a-8(i)(7), the staff expressed concern in SLB 14H that the court’s two-part test to the social policy exception might “lead to the unwarranted exclusion of shareholder proposals” by introducing an additional requirement not present in the staff's traditional analysis of the exception. Under the two-part test, a shareholder proposal that focuses on a significant policy issue nevertheless could be excludable if it pertains to ordinary business matters. In contrast, under the staff's approach, any proposal that focuses on a significant policy issue necessarily must transcend a company's ordinary business. As the third judge on the Third Circuit panel explained in a concurring opinion sympathetic to the staff’s analysis, the Commission has stated that proposals focusing on a significant policy issue are not excludable under the ordinary business exception “because the proposals would transcend the day-to-day business matters and raise policy issues so significant that it would be appropriate for a shareholder vote.”

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The staff announced in SLB 14H that it will continue to utilize its one-step test to determine the availability of the significant social policy exception. Under that test, the staff confirmed, “proposals that focus on a significant policy issue transcend a company’s ordinary business operations and are not excludable under Rule 14a-8(i)(7).” In the Rule 14a-8 no-action letter process, therefore, companies should continue to analyze the excludability of ordinary business proposals under the staff’s traditional approach.

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