Ongoing Review of Guidance Material

Published 1 May 2014

The Panel has published two new Guidance Notes as part of the ongoing review and consolidation of the guidance material on the Panel’s website.

The Panel has also updated two Guidance Notes to keep them up to date with current Panel policy.

Consolidated Guidance Note on Target Company Statements

The Panel has issued a Guidance Note on Target Company Statements that consolidates the numerous guidance documents published since 2001 relating to the requirements for target company statements under Schedule 2 of the Code. The consolidated Guidance Note supersedes the nine previous relevant publications. The content of the original publications has been retained. However, the Panel has updated its guidance relating to the disclosure in target company statements of the assumptions underlying prospective financial information.

Consolidated Guidance Note on “Creeping” under Rule 7(e)

The Panel has published a new consolidated Guidance Note on “Creeping” under Rule 7(e) of the Code. The new Guidance Note replaces two previous publications. The substantive material from the previous publications has been retained in the new consolidated Guidance Note.

Updated Guidance Note on Exemptions

The Panel has updated its Guidance Note on Exemptions to include sections on the following:

Effect of amalgamation on a pre-existing exemption

The Panel has declined a recent application for an exemption from the fundamental rule of the Code on the basis that the exemption was unnecessary. The application involved a question of whether an amalgamated company would retain the benefit of a pre-existing exemption that applied to one of the amalgamating companies. An explanation of the application is set out in the Guidance Note.

Explanation of the class exemptions for proxies and associates

From time to time the Panel receives enquiries about the meaning of the exemptions in the Takeovers Code (Class Exemptions) Notice (No 2) 2001 that exempt proxy holders and certain associates from rule 6(1) of the Code. An explanation of these exemptions is set out in the Guidance Note.

Scrip offers and overseas shareholders

The Panel has updated its policy for granting exemptions from rule 20 of the Code for scrip takeover offers made to shareholders who reside in jurisdictions other than New Zealand.

In order to better facilitate the making of scrip offers, the Panel has decided that applicants seeking an exemption from rule 20 will no longer be required to take the step of obtaining legal advice on compliance with securities legislation in overseas jurisdictions.

Updated Guidance Note on Independent Advisers

The Panel has updated its Guidance Note on Independent Advisers to explain its role in approving independent advisers

In summary, the Panel is not required to, and does not consider the merits of an independent adviser’s opinion. However, the prohibition on misleading or deceptive conduct (rule 64 of the Code) applies to every person, including to independent advisers in relation to their opinions.

Updated Comments on Anti-Avoidance Rules

The Panel has declined two recent applications for exemptions from the fundamental rule of the Code. Each application related to a deeming rule in rule 6(2) of the Code and was declined on the basis that the relevant transactions involved would not infringe the fundamental rule and therefore could be put into effect without the need for an exemption. The examples are illustrative of the Panel’s interpretation of rule 6 and the deeming rules.