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A brief history
As part of the government’s major corporate law review in the early 1990s, the Companies Act 1993 and the Takeovers Act 1993 were implemented. The Takeovers Panel was established under the Takeovers Act and was given the task of recommending a takeovers code to the government. The Panel recommended a code in June 1995. Several more years were to pass before the Takeovers Code was enacted, under the Takeovers Code Approval Order of 2000.
The Panel and the Code ensure fair and equitable takeover processes
The role of the Panel and of the Code is to ensure that all shareholders have a fair opportunity to participate in control-change transactions in Code companies (such as takeovers and allotments or acquisitions of parcels of shares). The Code also ensures that shareholders have adequate information to assist their decision-making for these transactions.
The Panel's approach facilitates an efficient takeovers market
The Panel has made a number of formal determinations on its interpretation of the Code in specific fact situations. The Panel also issues guidance for market participants on various aspects of the Code and the Panel's policy on applying it. The Panel executive reviews many takeover documents in draft to ensure that they comply with the Code.
The Panel is more than just an enforcer
While enforcement activities (including the ‘soft enforcement’ activity of the review of draft documents) are a key focus of the Panel’s role, the Panel has several other functions. The Panel approves the independent advisers who advise shareholders on each Code-regulated transaction; it considers exemption applications and, if appropriate and consistent with the objectives of the Code to do so, grants exemptions from compliance with the Code; the Panel keeps under review market practice and recommends any changes to takeovers law that that the Panel believes are necessary; it promotes public understanding of takeovers law and practice; it participates in international co-operation amongst takeovers regulators.
The Panel's role within the broader financial markets
The Panel has a sharply focused regulatory role (takeovers law and practice) within a broad matrix of prudential and financial markets regulation, including that exercised by the Reserve Bank, the Financial Markets Authority and the Registrar of Companies. In addition, NZX Limited undertakes a supervisory role of its listed market participants. Other regulators whose roles also impact on the financial markets include the Overseas Investments Office and the Commerce Commission.
For more information, refer to the Panel's latest Annual Report.