31 January 2012
Securities and Futures Commission ("SFC") published its "Guidelines to fund managers on dealing disclosure obligations under Rule 22 of the Code on Takeovers and Mergers (Takeovers Code)" ("Guidelines") on 29 December 2011 to set out some practical guidance which fund managers (being "associates" as defined in the Takeovers Code) may follow to ensure timely and appropriate compliance with their dealing disclosure obligations under the Takeovers Code.
Rule 22 of the Takeovers Code requires parties to an offer and their respective associates to disclose dealings in relevant securities of the offeree company and the offeror (in the case of a securities exchange offer) conducted for themselves or on behalf of discretionary clients during an offer period.
An "associate" is defined in the Takeovers Code to mean any person who owns or controls 5% or more of any class of relevant securities.
Some practical guidelines on the steps which fund managers may follow for the purpose of satisfying their dealing disclosure obligations are summarised as follows:
- Identifying relevant companies in offer periods and monitoring takeovers-related articles - relevant information can be obtained from or via (a) the Offer Period Tables on the SFC website; (b) announcements made by relevant companies posted on the website of Hong Kong Exchanges and Clearing Limited ("HKEx"); (c) News Alert subscribed from the HKEx website; and (d) other media sources such as newspapers and financial news services.
- On-going training of staff - all appropriate staff should have proper, regular and on-going training on the relevant provisions of the Takeovers Code including the meaning of "associate" and the dealing disclosure obligations under Rule 22 and Schedules I and II of the Takeovers Code. Also, compliance officers should keep themselves updated about amendments made to the Takeovers Code. Some relevant sources of information include Practice Note 9, Takeovers Bulletin and Update Alert service on the SFC website (to receive notifications about takeovers-related news).
- Proper compliance system - fund managers should implement adequate and proper compliance systems to discharge their obligations properly.
You can download copies of the Guidelines via the link below:
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