The Takeover Code is a framework within which takeovers can be conducted in an orderly manner. In development since as early as 1968, the code has transformed over the years into the modern regulation seen today.
What is Rule 8?
Rule 8 (http://www.thetakeoverpanel.org.uk/disclosure/rule-8-summary) specifically deals with the disclosure of dealings and positions. It requires that various parties, within an offer period, make public disclosures of their positions or dealings in relevant securities of the parties involved in the offer. In certain cases, these disclosures will be made in private to the Panel only. With cash offers, disclosures are not necessary.
How old is Rule 8?
Rule 8 has been part of the Takeover Code since 2006 when it was implemented as part of the Companies Act 2006. It is enforced by the Panel on Takeovers and Mergers (POTAM), whose statutory functions can be seen under Chapter 1 of Part 28 of the Companies Act 2006.
Who are the “Panel”?
POTAM is an independent body set up in 1968 in order to issue and administer the City Code on Takeovers and Mergers. They also supervise and regulate takeovers to ensure the regulations from the “Code” are met. Its main goal is to ensure the fair treatment of all shareholders in takeover bids.
An amendment to the Code was made as recently as September 2011 which aimed to increase transparency and offer further securities to all parties involved in a takeover.
The effects of Takeover Code Rule 8
Anyone who is interested in 1% or more of any class of relevant security offered on any UK Regulated market must make an Opening Position Disclosure. The Disclosure must be made before 3.30pm GMT on the 10th business day following the start of the offer period.
If the person deals in any relevant securities and is interested, or becomes interested, in 1% or more of any class of relevant securities, they must make a Dealing Disclosure. As with the Opening Position Disclosure, this Disclosure must be made before 3.30pm GMT – but on the business day after the date of the relevant dealing.
UnaVista can provide a number of tools in order to keep up to date and within financial regulations. Tools such as their Rules Engine make sure regulations are met.