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45 Cards in this Set

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Listed company regulations
FSA (UKLA) regulates through Listing Rules, DTRs and Prospectus Rules the admission of securities on the UK Official List and the 'continuing obligations'. Co must also comply with SE's Admission and Disclosure Standards.

Unltd civil penalties & criminal prosecutions. Ultimate sanction is withdrawal of authorisation.

FSA authorises investment business and approves various financial markets (RIEs or clearing house).
Role of SE
Regulated primary market and secondary market for securities. Main markets of LSE:
- UK and foreign co shares - Official List, AIM, techMARK
- govt stocks (gilts) - interest-bearing bonds issued by B of Eng for loan of money from investors
- options
SE market as primary market (new issue)
Raise capital (cash) by issuing securities (shares) - IPOs. Safeguards to demonstrate soundness of bus + convince sponsor to act on their behalf. How to ring securities to the market:
- offers for sale - issue prospectus - new or existing securities first acquired by issuing house then offered to public
- offer for subscription - issue prospectus - new securities issued directly to the applicants of the co
- placings - securities purchased by issuing house + placed with investment clients (small proportion through the market)
- intermediaries offers - passed mainly to private client investors who then allocate to their own clients
- vendor consideration issue (or vendor placing) - co acquiring a bus issues to the vendor instead of/in addition to cash.
- rights issue - new shares to existing s/hs in proportion to shares already held
- open offer - same as rights issue but benefits of rights can't be traded
- bonus issue (capitalisation) - fully paid shares allotted for no payment to existing s/hs in proportion
- exchanges and conversions - new securities listed as result of existing securities being exchanged or converted into new ones
- exercise of options or warrants - rights for holder to subscribe for cash for further secs - issued when rights exercised
- employee share scheme
LSE as a secondary market
SETS (SE Electronic Trading Service) - electronic trading for securities via an electronic order book. Sellers/buyers matched & trades auto. If unmatched orders retained on order book for future execution or to be returned.

SETSqx (SE Electonic Trading Service - quotes and crosses) - trading platform for securities less liquid than those on SETS. Combines a periodic electronic auction book with stand-alone quote driven market making.

SEAQ (SE Automated Quotation) / SEATSplus (SE Alternative Trading Service) - support for trading in the remainder of the UK market.
The UK Listing Regime
Principles:
- balance between ready access to market and protection for investors
- promote standards of disclosure - confidence
- facilitate open + efficient market
- ensure full and timely disclosure
- give holders time to consider changes in bus

Additional guidance from UKLA:- comprehensive website, Model Code, tel helplines, templates for announcements, free newsletter.

Centred on 3 rules:
- The Listing Rules - continuing obligations, Listing Principles, Model Code + listing application process
- The Disclosure and Transparency Rules - DTRs implement EU legislation in Market Abuse Directive (disclosure of price sensitive info + info re dealings by persons exercising mngr resps) + implement Transparency Obligations Directive (financial reporting, notifications of major interest in VRs, continuing obligations)
- The Prospectus Rules - implement provisions of EU legislation obtained in Prospectus Directive (when req'd, format/contents, process for submitting, AIU).
Conditions for listing
Advs: access to reg world-class SE, prestige of full listing, ability to raise finance through debt/equity.
Disadvs: costs, empt resources, disclosure req's, mngt time/effort to satisfy best practice for CG.

Req's from FSMA - main criteria:
- duly incorporated + acting in acc w/ Arts
- filed audited a/cs for last 3 yrs
- at least 75% of bus supported by historic revenue-earning record covering last 3 yrs
- current key execs played sig role in co's activities
- decisions made independently of any controlling s/h
- shares freely transferable (to encourage liquidity)
- first shares to be listed just have aggregated market value of at least £700k capital (or £200k for debt capital)
- at least 25% of co's share cap must be in public hands - assist open market
- shares must be eligible for electronic settlement (CREST)
- must be a plc
Listing process - professional advisers
Produce Prospectus approved by FSA - dev'd w/ prof advisers. Some 'housekeeping'.

Prof advisers - must appoint a sponsor to submit app, lodge supporting docs, act as channel for discussion between co/UKLA. Advise form issue should take, timing, cap reorg, issue price. Resp for accuracy w/ d's. Need access to records.

Accountants and solicitors also needed. Many also appoint PR consultants, registrars and receiving agents.

Principal financial and legal advisers meet with C/CEO/FD/cosec to decide amount/nature of cap to be issued, approx price, issue structure, fees/commissions, timing.
Listing process - the prospectus
Info re co + its shares. Solicitors or sponsors prepare 1st draft. Includes:
- details of persons resp for it
- types of share
- issuer and its capital
- description of group's activities
- issuer's A&Ls, financial positions inc WC and P&Ls
- mngt
- recent devt of/prospects for group (inc risks).

Some info inc by way of reference (if info already approved).
May be a single doc or three-part doc:
- reg doc (info re co - valid for 12 months once lodged)
- securities note (info re shares to be offered & admitted to Official List)
- summary (key info re co, shares, associated risks)

Confidentiality essential - omit profit forecast and proposed issue price from drafts. Inc app form w/ a closing date for receipt if apps. Allotment committee (rep of co, sponsor, broker) decide basis of allotment.
Listing process - the application
Should contact FSA to agree date on which app will be considered. Penultimate day before listing - BM held to approve all documentation ('48-hr docs') + give go ahead.

Docs to be submitted to FSA by midday 2 bus days before FSA consider app:
- app for admission of secs to OL (to UKLA)
- standard app to LSE for secs to be admitted for trading - sent to LSE on provisional basis at least 10 bus days prior to consideration
- prospectus
- circular published in connection w app
- copy of res of BM allowing secs - if necy should've already obtained s/h approval

On day of consideration, by 9am, completed s/h stmnt signed by a sponsor on FSA form must be submitted. Admission effective when decision has been announced through a RIS.

ASAP after consideration - submit stmnt if no of secs issued and a completed issuer's declaration using prescribed FSA form. Also pay listing fees.

Approved prospectus (by FSA) must be filed w FSA + made avail to public in acc w PRules (published in 1+ widely circulated newspapers; in printed form avail from co/agent; on co's or LSE website).
Listing process - the issue price
Cannot be fixed until just before the issue b/c it has to reflect prevailing market conditions. If too low - oversubscribed + obtain less than full value, if too high - insuff apps + subj to underwriting. Low take-up could affect public's appetite for co's secs in future.

Offer for subscription or offer for sale - issue price fixed. If over subscribed - some/all allotments reduced so that some/all allotted fewer shares + some rejected.

Tender - at price or stated min. Then allotted at a 'striking price' agreed by issuer/advisers - usually price that ensure full subscription on basis that no applicant pays more than price at which he tendered + all pay same price.
Main underwriter must agree to purchase any secs not subscribed for + pay fixed issue price. Fee of around 2.25% of issue value + may also offset his risk by sub-underwriting w banks/pension funds. Provides assurance that will be fully subscribed - esp imp if need to raise specific amount for particular purpose.
Annual Information Updates

(under Prospectus Rules)
Contains all info released by listed co to a RIS or otherwise madero public pursuant to CA06 over previous 12mnths. Give short desc if nature of info + state where info can be obtained. Must file w FSA by releasing it to a RIS w/in 20 days after publication of its ARA.
Premium and standard listings
Premium - only open to equity shares that are issued by commercial companies. Subject to 'super-equivalent' provisions which are higher standards than the EU regulatory req's re governance + disclosure.

Standard - if don't meet criteria for premium listing.

Secs of each co must be described as either/or so that any 3rd party knows standard secs meet.
The Listing Principles

(continuing obligations and key disclosure requirements)
Imp role in maintaining market confidence + ensuring fair/orders markets. Principles ensure spirit and the letter of Listing Regime observed.

6 Listing Principles - req a listed co to:
Take reasonable steps to enable d's to understand their resps + obligations
Take reasonable steps to establish/maintain adequate procedures/systems/controls to comply
Act with integrity towards holders/potential holders of its listed equity secs
Communicate info to holder/potential holders in way so as to avoid creation/continuation of a false market
Ensure treat all holders of same class that are in same position equally re rights
Deal w FSA in an open and cooperative manner.
Disclosure of information - guidance from DTRs

(continuing obligations and key disclosure requirements)
Must submit announcements to a RIS which is a PIP (primary info provider) service approved by FSA to disseminate reg info to market. (If closed, distribute to 2+ national newspapers + 2 newswire services).

Underlying principle - info must be released to market as promptly as poss + def by end of following bus day.

Continuing obligations req co to notify UKLA of following:
- info/devts re substantial movement in price of secs
- change in co's expected perf if materially diff from expectoration of market
- alterations to capital
- changes to class rights
- major acquisitions or disposals
- full and half-year results
- purchase of own shares or redemption of secs
- info re major s/hs where they control major VRs
- outcome of any decisions made by s/hs in GM
- substantial change in way co managed e.g. change of ARD
- board's decisions on dividends
- change in d's (inc areas of resp)
- change in PDMR's interests in shares or debentures inc any options granted/exercised
- issue of co's statutory accounts and half-year report
Disclosure of information - guidance from DTRs - delays in announcements & process

(continuing obligations and key disclosure requirements)
Ltd circs where delay warranted e.g. unexpected event - need to clarify any material uncertainties. Poss provisional 'holding' announcement esp if poss of announcement being prematurely leaked. Also delay if to avoid prejudice to co's legitimate interest (negotiations w/ 3rd party + could affect outcome) but it must not mislead public + confidentiality must be maintained to avoid leaks. Cannot be used just b/c in financial difficulty.

Inside info released to a RIS must also be posted on co's Internet site by COB following day of announcement (stay on for at least 1 yr). Must not appear beforehand.

All notices and circulars unless v routine submitted to UKLA for approval. When issued, 2 copies of circulars and proposed resolutions lodged w FSA + 2 copies of following as well unless no unusual features:
- Arts, trust deeds, employees share schemes, temp docs of title inc renounceable docs, definitive docs of title, proxy forms.
Disclosure of information - guidance from DTRs - financial reporting

(continuing obligations and key disclosure requirements)
Must also produce accounts confirming to IFRS.

- AR must be published w/in 4 months of ye
- preliminary results stmtns now optional but. If made must comply w/ LR reqs
- half-yr reports published w/in 2 months of period-end (no longer req to send to s/hs or publish in newspaper)
- new req to publish IMSs during a period no more than 10 wks from start of financial period + 6 wks from end

2 copies sent to UKLA's DVF. Appoint named primary point of contact. Available for public inspection on NSM.
Protection of shareholder interests (other safeguards other than announcements)

(continuing obligations and key disclosure requirements)
UKLA reqs:

- no restriction on reg of transfers of fully paid shares
- open offer cannot be purchased by d's unless exceptional circs
- publication of regular financial info
- notices of GMs at which non-routine bus to be transacted must be accompanied by explanatory note
- if GM matters will inc right to vote for s/hs d's must inc a recommendation re if proposal in best interests of members as whole + if intend to support it w/ shares they hold
- three-way proxy cards
- changes to the board notified
- changes to co's name or ARD notified
Oversea companies

(continuing obligations and key disclosure requirements)
If apply for primary listing must comply with Listing Regime as long as not contrary to rules of country of inc. Exception is CG Code other than d's service contracts.

Secondary listing cos subj to various modifications of the rules:
- sponsor doesn't have to report on cos WC
- usual to submit 3 yrs AAs but most recent can be up to 12 months old
- if secs listed on overseas SE must confirm compliance w/ that authority

Continuing obligations similar except for those w/ a secondary listing - only make available info that is not misleading, false or deceptive and mustn't omit anything sig.
Delisting from the Official List

(continuing obligations and key disclosure requirements)
Inform FSA, special resolution req'd, send circular convening GM - inc anticipated date of cancellation (not less than 20 business days following passing of resolution). Must explain reasons.

At same time as issuing circular, announcement made through an RIS explaining intended cancellation and covering GM. If res passed, further announcement made through a RIS + various documentation as prescribed in LRs sent to FSA.
Role of cosec

(continuing obligations and key disclosure requirements)
A good cosec:
- detailed K of Listing Regime + advise board
- provide board w updates re changes to rules
- clarify queries raised by board
- advise board of practical implications of changes in Listing Regime.

Nb - FSA has power to levy unltd fines on ind d's and issuers for breaches of rules. May not be reimbursed under D&O liability insurance cover.
AIM - the Alternative Investment Market
Regulated separately - AIM rules (less demanding) published by LSE. Still subj to Model Code and FSMA, and also chptr 5 of DTRs.

No req'd size, trading history, certain % of shares in public hands. But if main activity is bus which hasn't been independent and revenue-earning for at least 2 yrs it must agree d or e/e owning none than 0.5% of shares must disco if then for at least 1 yr from date of admission.

To join - appoint nominated broker and nominated advisor to:
- help w/ app process + ensure d's aware of resps
- confirm to LSE that co complied w/ rules + prospectus complete
- bring buyers/sellers together + match transactions
- point of contact for info between co and investment community.

Adviser must be from a register of approved firms kept by LSE.
Admission to AIM
Info given to LSE at least 10 bus days before expected date of admission:
- co's name, RO, co of inc, directors
- brief description of bus
- details re co's securities & if intend to raise further cap
- details of maj shs
- name/add of nominated adviser and broker

Info given to LSE at least 3 days before expected date of admission:
- pay AIM admission fee
- application form
- confirmation declaration executed by nomad
- ltr from co's broker confirming ongoing appointment
- submit admission doc (prospectus) - stays on co's website - incs full desc of co, principal activities, trading history, market trends, perf, mngt structure. Either Prospectus Directive (if public offer, rights issue or takeover triggers the PD + exceed applicable exemption limits re size of offer), otherwise shorter disclosure req called AIM-PD. Info includes:
- audited financial info (inc WC)
- names/functions/d details
- stmnts by directors that taken due care in prep of financial forecasts
- maj s/h details
- anticipated timetable re admission.

Admission effective when LSE issues a dealing notice to market. After 2 yrs can apply to join the Official List w/out producing full prospectus.
AIM companies: continuing obligations

- app and retain nomad & nombro
- AIM not reg market under EU regs so DTRs don't generally apply
- published a/cs (conform to IFRS)
- appropriate arrangements for settlement of secs
- adopt Model Code for AIM co's by board res
- publish annual audited a/cs win 6 mnths of ye
- prepare half-yr reports (unaudited) w/in 3 mnth of half-ye
- make copies of any docs sent to s/hs available to public for at least a mnth from date of announcment
- ensure shares freely transferable
- forward 6 copies of all announcements, circulars, reports etc to an RIS when issued to s/hs.
AIM companies: continuing obligations - announcements that must be notified:
- changes in financial conditions (not public K + price-sensitive)
- d's disclosures re interests in the co
- changes of d's details
- publication of audited a/cs + any ARD changes
- resig/dismissal/change of nomad or nombro
- issue of new secs or cancellation of existing secs
- decisions made to pay a div or other distribution
- details of substantial transactions
- transactions w/ related parties where size in excess of 55% of set of ratios
- material diffs between forecast and actual perf
AIM companies: continuing obligations - certain details to be published on a website:
- co must notify market of relevant website address
- website should be own (but may be hosted by other party)
- info must be kept up-to-date + date of last update must be given
- info must be easily accessible - shouldn't be necy to use a search facility to find it
- must be a stmnt that the info is being disclosed for purposes of the AIM rules

Must disclose:
- desc of bus
- if investing co, its investing strategy
- names/bios of directors
- desc of resps of board/committees
- country of inc & main co of operation
- if not a UK co, stmnt that members' rights may differ from those of a UK co
- current constitutional docs
- details of any other exchanges or trading platforms on which secs listed/traded
- re AIM secs - no. is issue (nb any in treasury), % not in public hands, identity/% holdings of sig s/hs - updated every 6 mnths
- restrictions on the transfer of its AIM secs
- most recent AR & all half-yearly, quarterly or similar reports published subsequently
- all notifications it has made in past yr
- most recent admission docs & any circulars or similar docs sent to s/hs in previous yr
- details of its nomad and other key advisers.
Delisting from AIM
Must notify market at least 20 bus days ahead, stating reasons for delisting. S/h approval req'd. Circular convening GM issued which contains reasons/consequences of delisting & sp. res must be passed to effect delisting. Ltd exemptions from req to pass res available from LSE.
Takeovers and mergers
Purpose of takeover - acquisition by 1 co of whole/majority of share capital of another in exchange for an issue of shares/cash payment combi.

- Purchase by public offer - most common (offer made to s/hs to acquire holdings - follow CC)
- Purchase by acquisition of individual blocks of shares (stake-building) - build base from which to launch takeover.
- Purchase by formal agreement w/ individual s/hs (only practicable if few s/hs - formal a/g sets out details of shares to be acq'd, price, date for completion, arrangements for paying for expenses - P&S a/g executed/exchanged, transfers/exchange for payment, Registrar notified - SH01, update statutory registers). If listed, ann. to UKLA, press, customers/e/es.
- Arrangements and reconstructions (CA06, Part 26)
The City Code on Takeovers and Mergers - General Principles

(published by the Panel on Takeovers and Mergers (The Panel))
Bodies nominate members of the Panel (ABI, AIC, APCIMS, BBA, CBI, ICAEW, IMA, LIBA, CFCSTC, NAPF).

Code intended to ensure fair & equal treatment of all s/hs during a takeover, doesn't look to deal w financial implications. Applies when bidder increases shareholding to 30% or more.

General principles:
1. offeree s/hs must be given equivalent treatment (protected)
2. offeree s/hs must have enough info to make informed decision + given enough time (board gives view)
3. offeree board must act in interests of the co as a whole
4. must not create false markets in offeree shares, offeror, or any co concerned by bid
5. offeror must ensure they can meet any cash consideration in full before announcing bid
6. offeree co must not be hindered in conduct of its affairs for longer than reasonable
The City Code on Takeovers and Mergers - Summary of the principal rules
1. Offer must first be made to board of offeree co or to its advisers disclosing identity
2. When any firm intention to make offer notified to board, must publicise it by press w/out delay - copy of notice/circular sent by offeree co to s/hs. Poss temp suspend dealings.
3. In period prior to announcement, confidentiality imp.
4. Boards of both co's must obtain competent ind. advice + passed on to s/hs.
5. Any info given to offeror co should be given on request to a less welcome but bona fide potential offeror.
6. Any doc/advert addressed to s/hs must be prepared w/ same standards of care re stmnts made as if a prospectus.
7. Content of announcements + offer docs rules followed. Timetable must give s/hs fair opp to consider it.
The City Code on Takeovers and Mergers - Amendments to the Code
- identity of offeror must be made clear at first formal announcement
- potential offerors must clarify their position w/in short period of time - 'put up or shut up' regime. Clarify w/in 28 days following announcement, unless extension granted.
- clarification that the board of the offeree co is not ltd in what can take into a/c in giving opinion on offer
- improved quality of info re offeror's intentions re offeree co + its e/es. Also, better ability for e/es to make views know.
The City Code - announcements and documentation
- copies of all public announcements must be lodged with the Panel at same time made/dispatched.
- board of offeree co ensures share transfers registered promptly
- imp provisions re dealings prior to announcement of any offer that could give rise to acquiring co being obliged to make an offer (once announced offeror should take care re further acquisitions)
- if any dealings take place for price in excess of offer price - poss obli to increase price specified in general offer (must be disclosed)
- offeror/offeree + associates must disclose holdings if traded options/other derivatives in the offeree co
- a dawn raid - acquires a substantial shareholding in target co before price rises - DTRs inc procedures re notifying UKLA + an RIS of a substantial shareholding. Key notification req triggered when s/h holds 3% or more in listed co - further reqs when increases/decreases by whole % integer (e.g. 3.1% to 4.1%).

Panel - endorsed by FSA - supervisory authority to carry out reg functions re EU Directive Takeover Bids. Statutory functions set out in CA06. Compliance w/ provisions statutory obligation now - sanctions/disciplinary actions/enforcement.
Takeover and mergers - public offers
Strict compliance with the Code, offer made to all s/hs, offer docs sent to s/hs of target co by merchant bank or issuing house. May be necy to call GM re bidding co if offer is a 'shares for shares' offer - to approve allotment as consideration. Appropriate docs should be sent to UKLA for approval if co is listed. If these shares will be listed on OL + admitted to trading on SE, offer doc inc prospectus, in compliance w/ the LRs and PRs.
Takeover and mergers - public offers - Competition Commission
If 2 major cos in same field, may be referred by OFT to Competition Commission. Under EA 2002, co may notify CC voluntarily in advance of intended merger. If not referred w/in period allowed for consideration following pre-notification, it cannot subsequently be referred if nerve effected w/in following 6 months. But advance clearance may attract publicity and cause share price to rise + increase cost of acquisition. Offeror may make offer conditional on not being referred to CC. Instead of referring to CC, sec of state may accept undertakings from both instead - legally binding and must be published. If merger is referred, bidder can't acquire shares w/out consent from sec of state while investigation carried out/referral withdrawn/CC made report.
Takeover and mergers - public offers - preparing the documentation
- detailed logistical timetables
- appoint printers - specialist if contained price-sensitive material
- d's legally resp for accuracy of docs despite issuing house/solicitors carrying out most work
- comply with Listing Regime if either listed - 3 copies of the offer doc/related doc submitted in draft to listing applications dept for approval prior to release
- doc issued to s/hs of offeree co must constitute a transfer of sec to offeror co
- existing div mandate applicable to shares in offeree co will be applied to shares in offeror co unless instructed otherwise
- cos whose share settled w/in CREST will need to liaise w/ registrars to ensure appropriate procedures are established to ensure s/hs to accept the offer w/in CREST.

Sensible to prepare in advance - envelopes addressed for offer docs to offeree s/hs and for circular letters to offerors s/hs, and further address labels for both cos in case further circulars.
Takeover and mergers - public offers - the closing date
Be prepared for last-minute rush of acceptances. Stringent procedures followed to avoid double counting:
- cross-check w/ register of members of target co that form of acceptance/transfer completed correctly and correct sh cert returned
- forms w/ no sh cert treated as valid but keep separate is can be completed when sh cert rec'd
- acceptances may also be allowed if sh cents not been prepared b/c recent purchase

If sh cert lost - usual procedure, and if form signed by rep or under POA - app docs must have been registered first.

During period of offer - offeree should notify offeror of any transfers rec'd so that offer docs can be sent to new s/hs.

Usual to advertise reminder of final acceptance date in the press. If cash alternative, subj to underwriting arrangements, will restrict time cash alts remain open for acceptance. If no underwriting, offer may be extended indefinitely w/ proviso that offer must be declared unconditional by the 60th day after it was first posted.
Takeover and mergers - public offers - after the closing date
- calc totals of (in)complete acceptances - suff for bid to be declared unconditional/bid extended/improve terms of offer
- once unconditional, prep sh certs to be issued to s/hs in offeree co
- draw cheques for those accepted cash alternative
- offeror co should establish a committee to make allotments of secs
- send out certs or cash consideration 21 days after the date the valid acceptances are received
- arrange to obtain a listing of the secs issued if co increased sh capital in order to implement offer
- if e/es of offeree co had share options - terms of acq would have stated how options treated on change of control - proved appropriate doc to them.

Omnibus transfer = transfer executed by or on behalf of offeror co to put shares of offeree co into own name. Simplified arrangement - schedule of forms of acceptance sent to HMRC + stamp duty calculated on this basis rather than individually. Poss to obtain exemption re transfers. Completed forms of acceptance and transfer, w/ sh certs + stamped bulk transfer loved w/ offeree co.
Compulsory acquisition

CA06, ss. 974-989
Designed to protect rights if minority to resist compulsory acquisition if reasonable grounds. Ensure treated no less fairly than s/hs who have accepted the offer.

Offeror has right w/in 3 months from last day on which offer may be accepted to give notice (on form 980(1)) to any s/h who hasn't accepted offer that it plans to acquire minority holders' shares on terms of offer. 90% minimum (excls sh's already held in if offeror's name at time offer made + treasury sh's).

Copy of notice w/ stat dec signed by d sent to co w/in 2 months of date on which 90% acceptance reached. Unless s/h applies to court to cancel/vary order w/in 6 weeks of date of form notice, bidding co must acquire shares in original terms of the offer (inc cash alt.). Offeror co sends copy of notice to offeree w/ instrument of transfer, w/ cheque or cert. Offeree co must register transfer + hold consideration on trust for former s/h w/ any cash in sep bank a/c. Former s/h can obtain consideration by applying to offeree co, surrendering any sh certs or giving indemnity. Target co has duty to take reasonable steps to trace former s/h. If not found w/in 12 yrs or offeree co liq before this, paid into court.

Minority s/hs who haven't accepted offer, also given right for shares to be bought by offeror co where reached 90%. Offeror must send notice (form 984) to any s/hs who have not assented to the takeover offer. This is must be sent by offeror w/in 1 months of reaching 90% level + explain rights exercisable + period. Rights of minority s/h to require offeror to acq share are not exercisable after end of 3 mnth period from when offer can be accepted or (if later) the date of the notice given on form 984.
Schemes of arrangement

CA06 s.897
Examples of more complicated arrangements:
- new holding co is established to take over 2 co's concerned w/ a view to merging their operations - a/g
- liq under provisions of IA86, s.110 or under a scheme of arrangement under CA06 s.897 - provides for a 'compromise or arrangement' w/ members/creditors.

SofA - make poss mergers + other restructurings which would not otherwise be poss, e.g. where a bidder wants to acquire 100% ownership but not poss to obtain req'd 90% level of acceptances necy for compulsory acquisition.

Req's approval of the court + sp resolutions of the members +/or creditors (75% rather than 90%). B/c shares acq'd not transferred but cancelled by the court order, no stamp duty liability. B/c of involvement of the court, the documentation for such scheme must be settled by counsel + legal advisers of co's concerned will be closely involved.
Insider dealing
Occurs where an individual w/ insider K of devts w/in a co uses this to his advantage (e.g. by dealing in shares). Only on regulated market. Criminal offence under CA93, Part V:

- knowingly dealing in secs in basis of inside info
- encouraging another to engage in such dealing
- disclosing inside info otherwise than in proper perf of one's empt/office/profession

Not inside info just b/c not published. Info must have been obtained by defendant as a d/emp/sh of co or directly/indirectly from such a person + must have known that info was inside info.
Insider dealing - definitions of 'inside info' and 'made public'
'Inside info' re secs described in FSMA, s.118C and CJA, Part V as info of a precise nature which:
- is not generally available
- relates directly or indirectly to a co
- would, if generally available, be likely to have a sig effect on the price of the co's secs - test to be applied is whether or not a reasonable investor would be likely to use info as part of basis of investment decisions.

'Made public' (CJA s.58):
- suff for info to be published in acc w/ rules of a recognised market or to be readily available
- info may be treated by court as having been made public even if only on a restricted basis e.g. acq'd by 'persons exercising diligence or expertise or by observation' or communicated only to section of public on payment of fee, or published outside the UK.
Defences
- to 'disclosing' offence - show that didn't expect any person to deal b/c of disclosure or didn't expect any such dealing to result in a profit attributable to price sensitivity of info.
- to 'dealing' offence - show that defendant would have dealt in same way even w/out info. E.g. d under financial pressure.

Insider dealing provisions apply to dealings in co shares, debentures, loan stock, future and options, futures linked to indexes and related options, gilt-edged securities.
Market abuse

FSMA, Part VIII
FSA can impose unltd civil fines or censure any person found guilty of market abuse. Allows civil penalties (on balance of probabilities) for behaviour that has characteristics of insider dealing but which is more diff to secure criminal prosecution.

Is behaviour re secs or investments traded on a UK market which amounts to:
- misuse of info - behaviour based on info not generally available to market but which regular user would regard as relevant when deciding terms on which transactions effected
- misleading/false impression - behaviour likely to give a regular user of the market a misleading/false impression as to supply/demand for or the price/value of investments
- market distortion - behaviour that would be regarded by regular user of the market as likely to give rise to market distortion.

FSA req'd under FSMA to publish a Code of Market Conduct giving guidance.
The Model Code
Freedom of PDMR's of listed co's to deal in co's secs restricted by statue, CL, req of LRs - comply w/ terms no less exacting than the Model Code (restrictions beyond those imposed by law).

Principal terms of the Model Code:
PDMR must not deal during prohibited period
PDMR w/in a co shouldn't buy/sell secs w/out giving written notification of intention to deal - clearance must be given (d or cosec from C or designated d; C from CEO or SID or auth committee; CEO same but C; if C/CEO combi from board; non-d's from cosec or designated d).
PDMRs may not be given clearance during close period (60-day period immediately preceding prelim. ann. of annual results; ann. of half-yearly results; if shorter, periods from relevant financial period end to time of ann.; 30-day period preceding ann. re 1st/2nd/3rd quarterly a/cs or if shorter period from relevant financial period-end to time of ann; 60-day period for 4th quarterly a/cs (of if shorter etc). No close period auto apply re IMS req'd under DTR 4 but should impose prohibition if co consider it to be price sensitive.
Sales of secs permitted in exceptional circs - notified to SE inc. stmnt of circs.
Secs inc secs listed in any member state or traded on any reg market. Also incs secs that are convertible into such secs.
PDMRs can't deal in cos secs on considerations if a ST nature - w/in a period of 1 yr.
PDMRs should take reasonable steps to ensure that connected persons also don't deal in prohibited period + observe code.
Model Code - trading plan
Provision made in acc w/ MC under which PDMR may enter into a/g to deal in shares in an open dealing period which may be subsequently executed in an open or a prohibited dealing period. In writing and made w/ independent 3rd party. Must set out deals re quantity, price + timescales envisaged. Can only be entered into in an open dealing period + subj to usual process of seeking permission to deal.

If any doubts if PDMRs proposed dealing caught under MC, UKLA or co's broker advisor should be contacted for guidance.

Usually cosec's role to ensure PDMRs aware of close periods. Send written notification informing them well in advance of close period starting. Poss send duplicate so can countersigned one copy and return to acknowledge receipt.
Insider lists
Register of persons who have access to inside info - req'd for listed co's. Incs e/es and advisers. Make arrangements to ensure advisers maintain list or listen co must maintain it.

DTRs req insider lists to be kept at least 5 yrs from when created or last updated. FSA may also demand list from co - must oblige to ASAP.