October 21, 2016
Making Sense of Europe
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
For today’s “Meet the Speaker” interview, we feature Bob Grayson of Tapestry Compliance, who will lead the session “Making Sense of Europe.”
Here is what Bob had to say:
NASPP: Why is Europe a particularly timely topic right now?
Bob: This summer the UK voted to the leave the European Union. The process of the UK’s withdrawal from the EU is unprecedented and the withdrawal process is unknown. The exit will need to be negotiated with the EU and the UK and it is possible that other members of the EU will also start to review their relationship with the EU. Many UK laws are based on EU Directives and Regulations. The UK will take time to consider what will be changed where certain laws are no longer required by virtue of EU membership. So laws relevant to share plans based on EU Directives and Regulations like data privacy, employment and securities laws have not immediately changed in the UK, but it is possible that they will do in the medium to long term if the UK decides not to follow the route adopted by the EU. As well as looking at how laws are made in the EU we will also look at this hot topic about what laws Britain may change as a result of “Brexit.” We will explore this in detail in our “making sense of Europe” presentation.
NASPP: What is a common mistake companies make and how can they avoid this?
Bob: A common mistake is to assume that there is always a uniform or “one size fits all” position in Europe. The EU was supposed to be a “single market.” It does not, however, have one set of laws which apply across the EU. European law takes the form of either a directive or a regulation. A regulation is a legal act of the EU that becomes immediately enforceable as law in all member states simultaneously (e.g., the Market Abuse Regulation (EU) No 596/2014) which came into effect on 3 July 2016). Directives, however, need to be transposed into national law and therefore offer some flexibility for member states in implementing them. As long as the objective is achieved, stricter requirements may be implemented if a member state wishes. This has resulted in significant inconsistencies in the EU. For example, the European Prospectus Directive 2003/71/EC (as amended) provides some de minimis thresholds whereby for offers falling below those thresholds, no prospectus is required. One of those is where the total consideration for the offer in the EU is less than €5 million (calculated over 12 months). But the Netherlands for example have set this at €2.5 million. To avoid this common mistake—be careful! Do not assume that the position in one member state is the same as another. Advice should be obtained in each member state particularly in relation to aspects fundamental to running a compliant incentive program such as whether a prospectus is required or the data protection requirements to be applied when transferring participant’s data.
NASPP: What is the silver lining to compliance in Europe?
Bob: Europe is difficult—but it is not impenetrable. Companies have to adopt a sensible European compliance program relative to their businesses that is defensible on audit. So companies should make themselves aware of the difficulties, issues and risks and use specialists who know the pitfalls and the solutions. It is therefore possible to “make sense of Europe”!
NASPP: What is something people don’t know about you?
Bob: One of us is a cheese connoisseur and can name (and correctly guess the weight of!) over 150 different cheeses, the other lived in and taught at a school in Lesotho—guess which is which!
Don’t miss Bob’s session, “Making Sense of Europe,” at the NASPP Conference!
About the NASPP Conference
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda. Online registration is now closed but we are happy to register attendees onsite in Houston.