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Corporate Counseling & Governance

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On 15 August 2016, the Malaysian Minister of Finance (MOF) revoked the Malaysian Code on Take-Overs and Mergers 2010 (Old Code). In its place is the Malaysian Code on Take-Overs and Mergers 2016 (New Code). Contemporaneous with this replacement, the Securities Commission Malaysia (SC) has also issued the Rules on Take-Overs, Mergers and Compulsory Acquisition 2016 (Rules).

Earlier this summer, the U.S. Securities and Exchange Commission adopted a new rule requiring disclosure of payments made by “resource extraction issuers” to governments. Securities Exchange Act Rule 13q-1 will require SEC-registered public companies that engage in the development of natural resources to file a report with the SEC disclosing payments to the U.S. federal government or to any foreign government for the commercial development of oil, natural gas, or minerals. Resource extraction issuers must comply with this rule for fiscal years ending on or after September 30, 2018. For calendar year companies, the first reports will be due at the end of May, 2019.

New restricted stock

On April 28, 2016, Japan’s Ministry of Economy, Trade and Industry (METI) published a Guidebook for Introducing New Stock Compensation (restricted stock) as Board Members’ Compensation to Encourage Companies to Promote Proactive Business Management.

Restricted stock is a type of incentive compensation to executives in the form of stock, which they are prohibited from disposing of for a certain period of time.

Amendments to Japanese tax laws effective April 1, 2016 made the issuance of restricted stock to executives permissible where:

  1. The issuing corporation can claim the compensation as a deductible expense; and
  2. It is a taxable event to executives when they are able to dispose the shares of the stock.

In light of a landmark energy reform that overhauled Mexico’s energy sector, the National Pension System Commission (CONSAR) has consistently amended its regulations, including the sole financial guidelines, in an effort to increase investments carried out by Mexican pension funds (AFORES or Administradoras de Fondos de Ahorro para el Retiro) in other asset classes, such as CERPIs.

CERPIs are certificates offered through the Mexican Stock Exchange by means of a Mexican issuing trust to finance or invest in certain projects in Mexico.  These are a new breed of asset class created as an alternative to the existing certificates for capital development or CKDs. Only institutional and qualified investors under Mexican law can purchase CERPIs.