The Year to Come and Year in Review summarise a selection of major developments you should be aware of from 2021, and a selection of key developments expected in 2022.
Updates to
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key areas in 2021 and 2022
National Security and Investment Act: The National Security and Investment Act comes into force on 4 January 2022, radically overhauling foreign investment screening in the UK by creating a standalone regime with some of the highest levels of scrutiny in the world.
Capital raising and public offers of securities reforms: For related content, see Capital Markets.
Listing rule changes: For related content, see Capital Markets.
Interest rate reform: Whilst the actions of the UK authorities aim to provide certainty to market participants as to who can rely on synthetic LIBOR from 4 January 2022, the FCA has made clear that it will be keeping an eye on firms’ progress in continuing to actively transition away from LIBOR during 2022.
National Security and Investment Act: For related content, see Mergers and Acquisitions.
Addressing insolvency practitioner regulation: For related content, see Restructuring and Insolvency.
Economic crime levy likely to be introduced: The Government’s proposed economic crime levy is likely to come into effect. The levy, which will be paid by regulated entities, is intended to raise £100 million to fight economic crime.
Corporate criminal liability: The Law Commission is expected to report in 2022 following its consultation on the review of corporate criminal liability.
Capital raising and public offers of securities reforms: The prospectus regime is likely to be reformed and changes to secondary capital raising processes are expected to be recommended.
Listing rule changes: New rules on diversity disclosures by listed companies are expected and the Government is proposing a new power to block listings on grounds of national security.
PRIIPs: Changes to the UK onshored Packaged Retail and Insurance-Based Investment Products (PRIIPs) regime are expected to come into effect on 1 January 2022. HM Treasury also announced that the current exemption for UCITS funds from PRIIPs requirements will be extended by five years to 31 December 2026.
Interest rate reform: Whilst the actions of the UK authorities aim to provide certainty to market participants as to who can rely on synthetic LIBOR from 4 January 2022, the FCA has made clear that it will be keeping an eye on firms’ progress in continuing to actively transition away from LIBOR during 2022.
UK European Market Infrastructure Regulation: The proposed amendments to the UK EMIR reporting requirements following consultation by the FCA and Bank of England are expected to be published by mid-2022. The Bank of England proposes to implement its policy, currently subject to consultation, on third country CCPs in July 2022.The phase-in of initial margin for uncleared derivatives will be completed with phase 6 counterparties coming into scope from 1 September 2022.
Pay gap reporting obligations: The Government will undertake a review of the gender pay gap reporting regime and changes are anticipated in 2022.The Government is also due to respond to its ethnicity pay gap reporting consultation.
Phasing in of climate reporting requirements: Premium listed companies must report in line with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). A similar rule will apply to standard listed companies for years starting on or after 1 January 2022 and a TCFD-based reporting obligation will apply to large companies and LLPs starting on or after 6 April 2022. The Government has announced a plan for new integrated Sustainability Disclosure Requirements from 2023.
Regulation of corporate governance and audit: The Government is expected to indicate how it plans to proceed with corporate governance and audit reforms on which it consulted in March 2020.
Data protection reform post-Brexit: The Government has released its proposals to reform UK data protection laws which suggest the GDPR will be retained but significant changes will be made so the law is more flexible.
Digital reforms: The EU aims to finalise the Digital Markets Act in 2022, which will reshape how digital businesses operate in Europe and regulate online “gatekeepers”, such as Amazon and Facebook. In the UK, similar reforms are expected in respect of firms with “Strategic Market Status”.
Compulsory ADR: The Civil Justice Council’s finding that the introduction of compulsory ADR into the English civil justice system would be lawful and may be desirable is expected to lead to further developments in 2022.
Reform of non-compete clauses: The Government is due to respond to its consultation on reform of non-compete clauses in employment contracts and this may lead to significant change in the use of restrictive covenants.
Pay gap reporting obligations: For related content, see Corporate Governance.
Downstream Oil Resilience Bill 2021: If enacted, the Downstream Oil Resilience Bill 2021 will give the Government new powers to ensure continuity of supply of crude oil based fuels. It will also prohibit certain acquisitions in the UK downstream oil sector without the consent of the Secretary of State.
National Security and Investment Act: For related content, see AFIG or Mergers and Acquisitions.
Interest Rate Reform: For related content, see Banking.
Sustainable Finance: For related content, see Investment Funds.
Phasing in of climate reporting requirements: For related content, see Corporate Governance.
Capital raising and public offers of securities reforms: For related content, see Capital Markets.
Listing rule changes: For related content, see Capital Markets.
Phasing in of climate reporting requirements: For related content, see Corporate Governance.
Sustainable Finance: For related content, see Investment Funds.
Our new edition of the ESG Outlook is out now. In this publication we explore key global ESG themes we believe will shape the legal outlook for businesses in 2022. We also look at the evolving ESG landscape in 30 jurisdictions.
Investment firms: The prudential and remuneration regime for investment firms (IFPR) will apply from 1 January 2022. The new remuneration rules for investment firms come into force for performance periods commencing on or after 1 January 2022.
Payments: The Government will consult on bringing systemically important firms in payments chains into Bank of England supervision in the first half of 2022. The deadline for implementing Strong Customer Authentication in the UK is 14 March 2022.
Operational resilience: From 31 March 2022, the FCA, PRA and Bank of England joint rules on operational resilience for financial services firms will start to apply.
Anti-money laundering: The Treasury is expected to publish its final report on reforms to the AML regulatory and supervisory regime before the end of June 2022.
Culture and conduct: The FCA is considering diversity and inclusion as regulatory issues and a joint consultation paper on diversity in financial services is expected in Q1 2022.
Preventing consumer harm: The FCA is expected to publish its final rules for a new consumer duty by 31 July 2022. New rules to regulate the Buy-Now Pay-Later sector are also likely to be finalised.
Interest rate reform: Whilst the actions of the UK authorities aim to provide certainty to market participants as to who can rely on synthetic LIBOR from 4 January 2022, the FCA has made clear that it will be keeping an eye on firms’ progress in continuing to actively transition away from LIBOR during 2022.
Changes to the prudential regulatory framework: The PRA will issue a consultation paper in Q1 2022 on implementation in the UK of a series of “final” reforms to the Basel Committee’s prudential regulation framework in the UK.
Prudential framework for non-systemic UK banks: The Discussion Paper considering various policy options for simplifying the prudential regulation of non-systemic UK banks and building societies known as the “strong and simple framework” closed for comment on 9 July 2021. The PRA is due to publish a summary of comments and an initial Consultation Paper is planned for the first half of 2022.
Wholesale Markets Review: In July 2021, the Treasury published its proposals for a review of the regulatory requirements applicable to wholesale financial markets including the removal of the share trading obligation and double volume cap from the UK MIFID regime. Legislation to implement the proposals is expected in 2022.
Data protection reform post-Brexit: For related content, see Data Privacy.
Digital reforms: For related content, see Data Privacy.
Cryptoassets: The FCA temporary registration regime for cryptoasset firms ends on 31 March 2022.
Review of UK Solvency II: The Government is reviewing the UK’s ‘onshored’ version of Solvency II and a consultation on a package of reforms is expected in early 2022.
Long-Term Asset Funds: The FCA will be consulting in the first half of 2022 on broadening the base of eligible investors for the LTAF, a new category of open-ended authorised fund, and on changes to the depositary rules.
Sustainable Finance: The FCA set out its expectations and principles regarding greenwashing for UK funds. The Government also published its Green Finance Roadmap outlining the UK sustainable finance legislative and regulatory changes that will be made over the next five years.
New tax regime for asset holding companies: For related content, see Tax.
National Security and Investment Act: The National Security and Investment Act comes into force on 4 January 2022, radically overhauling foreign investment screening in the UK by creating a standalone regime with some of the highest levels of scrutiny in the world.
Downstream Oil Resilience Bill 2021: For related content, see Energy and Infrastructure.
Pension scheme reporting obligations: New requirements for sponsoring employers of defined benefit pension schemes to report corporate transactions to the Pensions Regulator are expected to come into force in April 2022.
New defined benefit scheme funding regime: A package of changes to the pension scheme funding regime is expected to come into force in 2022.
Covid-19 commercial rent arrears: The Commercial Rent (Coronavirus) Bill is expected to come into force by March 2022 to continue (and extend) emergency protection measures for affected tenants (including the moratorium on forfeiture for non-payment of rent for commercial leases), to ring fence rent arrears and impose a binding arbitration regime for related disputes.
Winding up petitions – tapering of restrictions: For related content, see Restructuring and Insolvency.
Companies in distress and creditors’ interests: In BTI 2014 LLC v Sequana SA, the Supreme Court will rule on the trigger for directors to consider the interests of creditors when a company is in financial distress.
Addressing insolvency practitioner regulation: The Government is expected to report in 2022 on its consultation into the regulatory framework for insolvency practitioners following a critical report by the All Party Parliamentary Group on Fair Business Banking.
Winding up petitions – tapering of restrictions: Temporary restrictions on the use of winding-up petitions including the uplift in the minimum debt threshold to £10k and the exclusion of commercial pandemic induced rent arrears are set to expire on 31 March 2022.
Data protection reform post-Brexit: For related content, see Data Privacy.
Major reform of the international tax rules: 136 countries and jurisdictions have agreed to the OECD’s reform of the international tax system. From 2023 multinationals will become subject to a minimum 15% tax rate and taxing rights may be reallocated to countries where such groups operate and generate profits.
New tax regime for asset holding companies: The UK is set to introduce a new tax-advantaged regime for qualifying asset holding companies, designed to enhance the attractiveness of the UK as a location for these vehicles. There will also be targeted changes to the tax regime for REITs.
Interest rate reform: LIBOR publication will largely cease at the end of 2021, although the majority of USD LIBOR settings will continue until end-June 2023. The 1, 3 and 6 month settings of GBP and Yen LIBOR will also continue for a time limited period, but in a ‘synthetic’ form for legacy use only. The Critical Benchmarks (References and Administrators’ Liability) Bill includes contractual continuity provisions to assist in interpretation of contracts once synthetic LIBOR is published.
New rules under the UK Takeover Code: For related content, see Mergers and Acquisitions.
Section 2 CJA notices: In R v SFO, the Supreme Court found that the SFO's power under section 2 Criminal Justice Act 1987 does not extend to ordering the production of documents held outside the UK by foreign parties.
New UK sanctions to tackle global corruption: A new sanctions regime targeting international criminals looking to use the UK and its financial system to launder the proceeds of crime was introduced on 26 April 2021.
Brexit: On 1 January 2021 the Brexit transition period ended and the EU-UK Trade and Cooperation Agreement took effect. Most EU derived law in effect on 1 January 2021 was retained, with appropriate modifications, in the UK.
Encouraging UK-listed SPACs: Changes were made to the listing rules to: (i) allow certain types of special purpose acquisition companies to avoid a suspension of listing under the FCA’s reverse takeover rules on making an acquisition, (ii) reduce the free float requirement and (iii) make it possible to list a company with enhanced founder voting rights on the premium listing segment.
MiFID II and MiFIR: Many UK Quick Fix amendments to support market recovery following the pandemic took effect on 26 July 2021 including a relaxation of the commodity derivatives regime and a relaxation of several investor protection measures.
Interest rate reform: LIBOR publication will largely cease at the end of 2021, although the majority of USD LIBOR settings will continue until end-June 2023. The 1, 3 and 6 month settings of GBP and Yen LIBOR will also continue for a time limited period, but in a ‘synthetic’ form for legacy use only. The Critical Benchmarks (References and Administrators’ Liability) Bill includes contractual continuity provisions to assist in interpretation of contracts once synthetic LIBOR is published.
UK European Market Infrastructure Regulation: Amendments to the margin rules for uncleared derivatives came into force on 30 June 2021. The requirement for CCPs to transact on fair, reasonable, non-discriminatory and transparent commercial terms (FRANDT) became applicable from 1 July 2021. Phase 5 counterparties came into scope for initial margin on uncleared derivatives from 1 September 2021.
All reasonable and best endeavours: In CIS v IBM, the High Court decided that “all reasonable endeavours” is weaker than “best endeavours”.
Exclusion clauses: In Acerus v Recipharm, the High Court decided that an exclusion clause in a commercial contract was not effective because it was in a wider clause primarily addressing liability to third parties. The context of the wider clause was used to interpret the exclusion clause to apply only to liability to third parties.
Liquidated damages and liability caps: In Triple Point Technology v PTT Public Company, the Supreme Court held that liquidated damages for delay accrue up to termination of a contract unless the contract states otherwise and “negligence” in a carve-out from a cap on liability meant both the tort of negligence and breach of a contractual duty of care.
Parent company liability: For related content, see Environment and Climate Change.
Physical stamping and retirement of stamp presses: For related content, see Tax.
Data breach class actions: The Supreme Court has dismissed Mr Lloyd’s claim against Google. The judgment is likely to make future collective actions for data breaches much harder to bring.
Data breach class actions: The Supreme Court has dismissed Mr Lloyd’s claim against Google. The judgment is likely to make future collective actions for data breaches much harder to bring.
Lawful act duress: In Pakistan International Airline Corporation v Times Travel (UK) Ltd, the Supreme Court held that lawful act duress exists as a doctrine and identified the elements required to establish it.
Professional negligence: In Manchester Building Society v Grant Thornton, the Supreme Court refined the scope of duty principle in professional negligence explaining that it was rooted in the objective purpose of the advice.
Arbitration: In Kabab v Kout Food Group, the Supreme Court deployed its approach from last year’s Enka decision in the context of the enforcement of an arbitration award under the New York Convention.
Judicial review reforms: The Government’s much-anticipated review of judicial review resulted in only modest reform proposals, set out in the Judicial Review and Courts Bill.
Equal pay: In Asda Stores v Brierley, the Supreme Court resolved the first stage of a large-scale equal pay claim, by holding that female store employees could compare themselves to male distribution employees for the purposes of an equal pay claim.
Employment rights: In Uber v Aslam, the Supreme Court found that Uber’s drivers were workers, with the right to receive the national minimum wage and holiday pay.
Hydrogen Strategy: In August 2020, the UK Government released its much-awaited Hydrogen Strategy as part of its commitment to reaching net-zero carbon emissions by 2050.
UK Infrastructure Bank: In June 2021, the UK Infrastructure Bank (UKIB) opened its doors. The UKIB has the dual objectives of investing in projects to help mitigate and adapt to climate change and to support regional economic growth across the UK.
Interest Rate Reform: For related content, see Banking.
Parent company liability: In Okpabi v Royal Dutch Shell, the Supreme Court found that a tort claim against a UK parent company for environmental damage allegedly caused by a subsidiary was arguable.
Hydrogen Strategy: In August 2020, the UK Government released its much-awaited Hydrogen Strategy as part of its commitment to reaching net-zero carbon emissions by 2050.
UK Infrastructure Bank: In June 2021, the UK Infrastructure Bank (UKIB) opened its doors. The UKIB has the dual objectives of investing in projects to help mitigate and adapt to climate change and to support regional economic growth across the UK.
UK Infrastructure Bank: For related content, see Energy and Infrastructure or Environment and Climate Change.
Our new edition of the ESG Outlook is out now. In this publication we explore key global ESG themes we believe will shape the legal outlook for businesses in 2022. We also look at the evolving ESG landscape in 30 jurisdictions.
Preventing consumer harm: The FCA intends to consult on rule changes to strengthen its financial promotion rules for high-risk investments in Q4 2021.
MiFID II and MiFIR: Many UK Quick Fix amendments to support market recovery following the pandemic took effect on 26 July 2021 including a relaxation of the commodity derivatives regime and a relaxation of several investor protection measures.
Prudential framework: The PRA published a policy statement in June 2021 setting out its supervisory expectations of “new and growing” non-systemic UK banks.
Anti-money laundering: The Treasury consulted on changes to the AML regime, including introducing the ‘travel rule’ under which crypto service providers would have to share more information about parties to cryptoasset transfers.
Interest rate reform: LIBOR publication will largely cease at the end of 2021, although the majority of USD LIBOR settings will continue until end-June 2023. The 1, 3 and 6 month settings of GBP and Yen LIBOR will also continue for a time limited period, but in a ‘synthetic’ form for legacy use only. The Critical Benchmarks (References and Administrators’ Liability) Bill includes contractual continuity provisions to assist in interpretation of contracts once synthetic LIBOR is published.
UK European Market Infrastructure Regulation: Amendments to the margin rules for uncleared derivatives came into force on 30 June 2021. The requirement for CCPs to transact on fair, reasonable, non-discriminatory and transparent commercial terms (FRANDT) became applicable from 1 July 2021. Phase 5 counterparties came into scope for initial margin on uncleared derivatives from 1 September 2021.
Basel 3 implementation in UK: The PRA consulted during 2021 on its implementation of the Basel III rules and published its final Basel 3 rules in October 2021. The PRA’s Basel 3 rules come into effect on 1 January 2022.
Leverage ratio and extended UK regime: Currently only major UK banks and building societies are required to comply with the leverage ratio framework. The FPC has proposed that the PRA should extend the leverage requirements to designated holding companies, major investment firms and UK banks or investment firms with significant non-UK assets.
Cryptoassets: The Treasury set out proposals to regulate stablecoins and to take forward the recommendations set out in the Kalifa Review to boost the UK fintech sector.
AI and inventorship in the UK: For related content, see Intellectual Property.
Anti-money laundering: For related content, see Financial Regulation.
AI and inventorship in the UK:
In Thaler v Comptroller-General of Patents, Designs and Trade Marks, the Court of Appeal held that a UK patent cannot be granted where the AI system is named on the patent application as the inventor.
Arbitration: In Kabab v Kout Food Group, the Supreme Court deployed its approach from last year’s Enka decision in the context of the enforcement of an arbitration award under the New York Convention.
New rules under the UK Takeover Code: New rules introduced in July under the UK Takeover Code aim to introduce consistent treatment of all regulatory conditions, including those relating to EU and UK merger control clearances. The new rules have made it harder for bidders to walk away from deals and amend the contractual offer timetables, with consequences for deal costs and related financing arrangements.
Stronger powers for the Pensions Regulator: Changes for trustees and sponsoring employers of occupational pension schemes came into force on 1 October 2021, including new criminal offences, changes to the contribution notice regime and changes to strengthen the Regulator’s powers.
Covid-19 commercial rent arrears: In November 2021, the Government issued a new Code of Practice offering guidance on how parties should resolve Covid-19 commercial rent disputes as a precursor to the new binding arbitration regime being introduced under the Commercial Rent (Coronavirus) Bill.
Landlord/tenant CVAs: For related content, see Restructuring and Insolvency.
Landlord/tenant CVAs: Amongst high profile landlord/tenant CVAs in 2021, the decision in New Look illustrated the flexibility of CVAs while shedding light on “vote swamping” and unfair prejudice concerns.
Part 26A restructuring plans: Use of the new cross-class cram down power in Virgin Active provides significant comfort for in-the-money creditors. Hurricane Energy’s failed plan serves as a reminder about the importance of establishing a ‘relevant alternative’.
Anti-money laundering: For related content, see Financial Regulation.
Physical stamping and retirement of stamp presses:
An electronic process was adopted for stamping documents (such as stock transfer forms), ending 300 years of physical stamping and 100 years of service of the stamp presses.
Independent trade policy emerges: The UK has established the new Trade Remedies Authority to assess disputes on dumping and subsidies recommend remedies.
Brexit: For related content, see Brexit.
Trust Registration Service extended: From 6 October 2020 the requirement for certain trusts to be registered on HMRC’s trust register has been expanded, so that many more trustees will now need to register their trusts.
Explore our Year to Come 2022 and Year in Review 2021 series across 20+ jurisdictions and a number of legal topics.