SEC to Consider Amendments to Cross Border Rules
The SEC announced on April 29, 2008, that it will consider modifications to rules concerning U.S. investor participation in certain mergers and acquisitions involving non-U.S. target companies. In January 2000, the SEC adopted regulations (Regulations 800 through 802 under the Securities Act of 1933) permitting U.S. investors to participate under certain circumstances in business combinations involving a target company that is a foreign private issuer. The nature and extent of the relief granted under these rules from U.S. takeover legislation is conditioned on a range of factors, including the level of voting share ownership by U.S. persons in the foreign private issuer. The new regulations announced by the SEC are expected to add clarity, in particular to the manner in which U.S. ownership of the securities of a target company is calculated, and may also provide additional exemptive relief permitting U.S. investor participation in a broader array of cross-border business combinations.
We will circulate a detailed update on the proposed amendments when the SEC publishes its proposed rules for public comments. In the interim, please click here to review the SEC's April 29 announcement.