New regulations have been made to remove the requirement for banking companies and the holding companies of credit institutions to disclose in their accounts details of individual loans to directors. Instead, banks will be required to disclose the aggregate total amount of loans, guarantees and credits to their directors, with no individual breakdown per director. This marks a return to the position as it was under the Companies Act 1985. The change is effected by amending Section 413(8) of the Companies Act 2006 and will apply for financial years beginning on or after 23 December 2009.
The regulations follow a Government consultation issued in August 2009 (see here for background). The amendments to Section 413(8) were made in a short timeframe in order that companies with a 31 December year-end can benefit from them for the 2009 accounts. The consultation response also raises the possibility of more general changes to the regime of disclosure of loans in the notes to companies’ accounts for all companies. Any such changes will be made on a longer timeframe following a further consultation which would include the full terms of the proposed amendments.
See The Companies Act 2006 (Amendment of Section 413) Regulations 2009 (SI 2009/3022), available here. The consultation response is available here.
