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	Buybacks (continued)      months and the additional voting rights are not exercised before that elimination (clause 5). If a code company buyback reduces a person’s control of the voting rights in a code company, that person may subsequently increase its holding - i.e. top up. However, this must happen within six months of the decrease and the amount of the top up is restricted. It must only take the person’s voting control percentage to the lesser of: a.  the control percentage of the person immediately before the increase plus an additional 5 percent of the voting rights of the code company; or b.  the control percentage of the person immediately before the decrease (clause 6). EXAMPLE Company A holds 30% of the voting control in Company B. Company B buys back a number of its shares with the result that A’s voting control reduces to 20%. Within six months of that decrease, A may increase its voting control to 25% (see a. above). Acquisitions by associates in the six months following the decrease will also need to be taken into account in calculating the thresholds permitted by this exemption. ALLOTMENTS If a shareholder increases its control of the voting rights in a code company as a result of an allotment of securities by a code company, that shareholder is exempted from the fundamental rule if either:   the allotment is made within six months after, and pursuant to, an initial public offering of voting securities by a company (whereby it becomes a code company), and the offer complies with certain disclosure requirements (clause 7); or   the allotment is made as a result of a pro rata offer to all shareholders, or under a dividend reinvestment scheme, and the increased voting control is eliminated (wholly or, in some cases, in part only) within six months and the additional voting rights are not exercised before that elimination (clause 8). If a person’s voting control decreases as a result of a code company’s pro rata offer or dividend reinvestment scheme, clause 9 permits that person to top up its voting control to the previous level within six months. Increases in voting control by the shareholder’s associates in this period will need to be taken into account. If the decrease is as a result of some other allotment by the code company, clause 10 provides that the top up must only take the shareholder’s voting control percentage to the lesser of: a.  the control percentage of the person immediately before the increase plus an additional 5% of the voting rights in the code company; or b.  the control percentage immediately before the decrease. EXAMPLE Company X holds 53% of the voting control in Company Y. Company Y makes a non-pro rata allotment with the result that X’s voting control reduces to 50%. Within six months of that decrease, X may increase its voting control back to 53% (see b. above).	Acquisitions by associates in the six months following the decrease will also need to be taken into account in calculating the thresholds permitted by this exemption. LENDERS AND RECEIVERS Lenders (including persons holding security interests for lenders) and receivers appointed by lenders, are exempted from the fundamental rule if they acquire control over voting rights in a code company under the terms of a security interest. This is subject to the condition that the security interest is held in the lender’s ordinary course of business and as part of a bona fide transaction for lending of money or provision of other financial services that does not have any purpose of circumventing the code (clauses 11 and 12). There are consequential exemptions for those who control lenders, their associates and associates of lenders or receivers. PROXIES AND CORPORATE REPRESENTATIVES Subject to certain conditions (including that no consideration is paid to the appointer), persons who are appointed as corporate representatives or as proxies for meetings of code companies are exempted from the fundamental rule (clauses 13 to 16). There are consequential exemptions for those who control proxies, their associates and associates of proxies or corporate representatives. SHAREBROKERS Subject to certain conditions, sharebrokers are exempted from the fundamental rule when, in the ordinary course of their business, they acquire control over code company voting rights, so long as they exercise those rights only in accordance with the instructions of their clients. There are consequential exemptions for those who control sharebrokers and associates of sharebrokers (clauses 17 and 18). UNDERWRITERS If bona fide underwriters (or those who control them) increase their voting control because they are required to acquire securities under an underwriting arrangement entered into in the ordinary course of business, they are exempted from the fundamental rule so long as the increased voting control is eliminated (wholly or, in some cases, in part only) within six months and the additional voting rights are not exercised before that elimination (clause 19). EXECUTORS AND TRUSTEES Persons whose voting rights in code companies increase to a level which would otherwise put them in breach of the fundamental rule are exempted from the fundamental rule if the increase results from:   their acting as trustee or executor of a will; or   their being left property in a will; or   their acting as an administrator of an intestate estate; or   an acquisition on intestacy (clauses 20 to 22). There are consequential exemptions for those who control executors and trustees and for their associates. (continued p3)

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