Final CNS AR 2020 - Flipbook - Page 30
Anti-takeover provisions in our charter documents and Delaware law may delay or prevent a change in control
of us, which could decrease the trading price of our common stock.
Our certificate of incorporation and bylaws and Delaware law contain certain anti-takeover provisions that could have
the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire,
control of the Company without negotiating with our board of directors. Such provisions could limit the price that certain
investors might be willing to pay in the future for the Company’s common stock. Certain of these provisions allow the
Company to issue preferred stock with rights more senior to those of our common stock, impose various procedural and other
requirements that could make it more difficult for stockholders to effect certain corporate actions, and set forth rules about
how stockholders may present proposals or nominate directors for election at annual meetings.
We believe these provisions protect our stockholders from coercive or other unfair takeover tactics by requiring
potential acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess
acquisition proposals. However, these provisions apply even if an acquisition proposal may be considered beneficial by some
stockholders and could have the effect of delaying or preventing an acquisition. In the event that our board of directors
determines that a potential business combination transaction would be beneficial to the Company and its stockholders, such
stockholders may elect to sell their shares in the Company and the trading price of our common stock could decrease.
Legal and Regulatory Risks
We may be adversely impacted by legal and regulatory changes in the U.S. and internationally.
We operate in a highly regulated industry and are subject to new regulations and revisions to, and evolving
interpretations of, existing regulations in the U.S. and internationally. In recent years, regulators in the U.S. and abroad have
increased oversight of the financial services industry, which may result in regulation that increases the Company’s cost of
conducting its business and maintaining its global compliance standards or limit or change the Company’s current or
U.S. regulatory agencies have proposed and adopted multiple regulations that could impact the mutual fund industry.
The SEC’s final rules and amendments that modernize reporting and disclosure, along with other potential upcoming
regulations, could, among other things, restrict the funds we manage from engaging in certain transactions, impact flows, and/
or increase expenses as well as compliance costs.
In Europe, rules and regulations under MiFID II and MiFIR, along with substantially similar national rules of the U.K.
and implementing rules and regulations, have had, and will continue to have, direct and indirect effects on our operations in
Europe, including increased costs for investment research and increased compliance, disclosure, reporting, and other
obligations. In addition, European and international regulations and rules around environmental, social, and governance
disclosures are expected to have direct and indirect effects on our global operations, including increased costs for increased
compliance through disclosure and reporting, among other obligations.
There has been an increase in data and privacy regulations globally. In addition to the European Union’s General Data
Protection Regulation (GDPR), U.S. state data breach and privacy legislation, including the California Consumer Privacy
Act, have come into effect requiring us to comply with stringent requirements, and we expect that there will be further
regulation and legislation that will come into effect in the future that will require us to comprehensively review our systems
and processes and may result in additional costs.
The U.K.’s exit from the European Union on January 31, 2020 (referred to as Brexit) and end of the transition period on
December 31, 2020 may continue to disrupt our business operations and impact our reported financial results as well as the
liquidity and value of our investments. Brexit has caused significant geo-political and legal uncertainty and market volatility
in the U.K. and elsewhere, which may continue during continued negotiations between the U.K. and Europe. CSUK’s ability
to market and provide its services or serve as a distributor of financial products within the European Union could be restricted
temporarily or in the long term as a result of Brexit. Our contingency plans for Brexit require the cooperation of
counterparties or a regulator of financial services to make timely arrangements. While we believe it is in the best interests of
counterparties and regulators to cooperate, we cannot guarantee that counterparties or regulators will cooperate or the
timeliness of their cooperation. Our operating expenses have increased as we implement our plan to continue to market and
provide our services and distribute our products in the short and/or long term.
The expected discontinuation of LIBOR and uncertainty around the identification and use of alternative reference rates
introduces a number of risks for us, our clients, and the financial services industry more widely. See “The expected
discontinuation of LIBOR, and uncertainty around the identification and use of alternative reference rates, may adversely
affect the value of certain LIBOR-based assets we manage and expose us to additional risks.”