Companies Act 2006 Explanatory Notes

Part 2: Amendments of Companies (Audit, Investigations and Community Enterprise) Act 2004

1666.Paragraphs 14 and 15 amend section 14 and 15 of the C(AICE) Act 2004. The amendments mean that periodic accounts and reports of issuers required under corporate governance rules or transparency rules may be examined by the FRRP.

Section 1273: Corporate governance regulations

1667.Section 1273 provides the Secretary of State with a regulation-making power similar to the power given to the Authority in new section 89O of FSMA inserted by section 1269.

1668.The Secretary of State may make regulations for the purposes of implementing, enabling the implementation of or dealing with matters arising out of Community obligations on corporate governance for UK companies whose securities are traded on a regulated market in the UK or elsewhere in the EEA.

1669.Subsection (3)(a) allows for regulations to be made by reference to any code regulating corporate governance. This could include, for example, the Combined Code on Corporate Governance (issued by the Financial Reporting Council).

1670.Subsection (4) specifies that any criminal offence created by the regulations may not impose a greater penalty than an unlimited fine.

1671.Subsection (5) provides for regulations to be made by way of negative resolution. However, by virtue of section 1292(4), it will also be possible to make regulations under this power by affirmative procedure.

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