“derivative has the meaning set out in section 8(4) of the Financial Markets Conduct Act 2013

“financial product, in relation to a code company,—

• “(a) means—

  • “(i) an equity security within the meaning of section 8 of the Financial Markets Conduct Act 2013, whether or not the security carries voting rights:

  • “(ii) a debt security, within the meaning of section 8 of the Financial Markets Conduct Act 2013, that carries the right to vote at any annual or general meeting of the code company:

  • “(iii) a managed investment product, within the meaning of section 8 of the Financial Markets Conduct Act 2013, that carries the right to vote at any annual or general meeting of the code company; and

• “(b) includes a financial product that is convertible, at the option of the product holder, into a financial product of the type referred to in paragraph (a)(i), (ii), or (iii)

“licensed market has the meaning set out in section 6(1) of the Financial Markets Conduct Act 2013

“licensed market operator has the meaning set out in section 6(1) of the Financial Markets Conduct Act 2013

“listed issuer has the meaning set out in section 6(1) of the Financial Markets Conduct Act 2013

“minimum acceptance condition means—

• “(a) a condition referred to in rule 23; or

• “(b) any condition to which an offer is subject that relates to the offeror receiving a specified minimum level of acceptances in respect of voting securities

“quoted, in relation to financial products of a person, means financial products of the person that are approved for trading on a licensed market (and, to avoid doubt, financial products do not cease to be quoted merely because trading in those financial products is suspended)

“relevant interest has the meaning set out in sections 235 to 238 of the Financial Markets Conduct Act 2013

“stock exchange has the meaning set out in section 2(1) of the Companies Act 1993

“underlying has the meaning set out in section 6(1) of the Financial Markets Conduct Act 2013”.

• “(a) is a listed issuer that has financial products that confer voting rights quoted on a licensed market; or”.

“4A Transitional, savings, and related provisions

• The transitional, savings, and related provisions set out in Schedule 1AA have effect according to their terms.”

• “(c) the licensed market operator (if any voting securities of the target company are quoted on a licensed market operated by the operator).”

• “(d) the licensed market operator (if any voting securities of the target company are quoted on a licensed market operated by the operator).”

• “(a) be given no later than the day after the date of acquisition,—

  • “(i) if any of the offeror, any holding company of the offeror, or the target company is a listed issuer, to the target company, the licensed market operator, and the Panel; or

  • “(ii) if none of the offeror, any holding company of the offeror, or the target company is a listed issuer, to the target company and the Panel; and”.

• “(3) In subclause (2), every relevant document means every product disclosure statement or other document that must be registered or lodged with, or produced to, any of the following persons or bodies for the offer to comply with the Financial Markets Conduct Act 2013 (including any exemption granted under that Act or any mutual recognition scheme established under that Act) or with the laws of any overseas jurisdiction in which the offer of the financial products is to be made:

  • “(a) the Registrar of Financial Service Providers (including any equivalent person or body in an overseas jurisdiction):

  • “(b) any regulatory body (including a regulator in an overseas jurisdiction):

  • “(c) any offeree of the financial products.”

• “(1) If the target company is a listed issuer, the offeror must send (electronically, if possible) to the licensed market operator a copy of the documents that the offeror is required to send under rule 41.”

• “(1) If it is a listed issuer, the target company must, immediately on receipt of a takeover notice,—

  • “(a) notify the licensed market operator in writing that a takeover notice has been received; and

  • “(b) send (electronically, if possible) to the licensed market operator a copy of the notice and the documents that accompanied it under rule 41.”

• “(ii) any document required to accompany the takeover notice sent under rule 41(2) that is required by the Financial Markets Conduct Act 2013 or any other applicable law to be given in relation to, or to accompany, an offer of financial products; and”.

• “(2) Subclause (1)(b) applies only if the offeror's or the target company's voting securities are quoted on a licensed market that is operated by the licensed market operator.”

• “(C) the licensed market operator (if the voting securities of the target company or the offeror are quoted on a licensed market that is operated by the operator); and”.

• “(2) If the target company or the offeror or any holding company of the offeror is a listed issuer, the offeror must provide the licensed market operator with the same notification that is required under subclause (1).”

• “(d) the licensed market operator (if any voting securities of the target company are quoted on a licensed market that is operated by the operator).”

• “(c) the licensed market operator (if any voting securities of the target company are quoted on a licensed market that is operated by the operator).”

“51 Notification of dominant ownership

• If a person becomes a dominant owner in a code company, that person must immediately send a written notice of that fact to the code company, the Panel, and (if any voting securities of the code company are quoted on a licensed market that is operated by a licensed market operator) the licensed market operator.”

• “(a) sent immediately to the code company, the Panel, and (if the code company is a listed issuer) the licensed market operator; and”.

• “(a) immediately to the Panel and, if the target company is a listed issuer, to the licensed market operator; and”.

• “(a) immediately to the Panel and, if the target company is a listed issuer, to the licensed market operator; and”.

• “(3) For the purposes of this clause, if a person has a relevant interest in a derivative for which the underlying is 1 or more equity securities of the target company, the person must be treated as holding or controlling the number of the underlying equity securities that is determined under clause 7C.”

• “(4) For the purposes of subclauses (1)(a) and (2),—

  • “(a) if a person (A) has acquired or disposed of a relevant interest in a derivative for which the underlying is 1 or more equity securities of the target company, A must be treated as having acquired or disposed of the number of the underlying equity securities that is determined under clause 7C; and

  • “(b) A must be treated as having acquired or disposed of those underlying equity securities on the same day on which A acquires or disposes of the relevant interest in the derivative; and

  • “(c) disposed of, in relation to a relevant interest in a derivative, does not include A ceasing to have a relevant interest in a derivative because the relevant agreement has expired.

• “(5) Nothing in subclause (4) applies to subclause (1)(b) or (c).”

“7A Composition of non-derivative and derivative holdings

• “(1) This clause applies if—

  • “(a) a person (A) referred to in clause 6(1) has a relevant interest in a derivative as referred to in clause 6(3); or

  • “(b) a person (B) referred to in clause 6(1)(a) to (d) has, during the 6-month period referred to in clause 7(3), acquired or disposed of a relevant interest in a derivative as referred to in clause 7(4).

  “(2) If this clause applies, it applies to—

  • “(a) each statement made under clause 6(1) for A in which the number of equity securities includes a number of equity securities that A is treated as holding or controlling under clause 6(3) (including where the number that A is treated as holding or controlling is 0); and

  • “(b) each statement made under clause 7(1)(a) for B in which the number of equity securities includes a number of equity securities that B is treated as having acquired or disposed of under clause 7(4) (including where the number that B is treated as having acquired or disposed of is 0).

  “(3) For each statement made under clause 6(1) for A, a further statement that discloses for each number of each class of equity securities of the target company held or controlled by A—

  • “(a) the number, designation, and percentage of the class of equity securities held or controlled by A before applying clause 6(3); and

  • “(b) the number that A is treated as holding or controlling under clause 6(3); and

  • “(c) for each derivative, the details in clause 7B.

  “(4) For each statement made under clause 7(1)(a) for B, a further statement that discloses for each total number of each class of equity securities of the target company acquired or disposed of by B—

  • “(a) the total number and the designation of the class of equity securities acquired or disposed of by B before applying clause 7(4); and

  • “(b) the total number that B is treated as having acquired or disposed of under clause 7(4); and

  • “(c) for each derivative,—

    • “(i) the date on which the derivative was entered into; and

    • “(ii) the details in clause 7B.

“7B Disclosure about derivatives

• For the purposes of clause 7A, the details of the derivative to be disclosed are—

  • “(a) the type of derivative (for example, option or swap agreement); and

  • “(b) the full names of the parties to the derivative; and

  • “(c) if the person to whom the statement relates is not a party to the derivative, the nature of the relevant interest in the derivative; and

  • “(d) the notional value of the derivative (if any) (which is the face value or the notional amount in respect of the derivative as at the date on which the relevant agreement is entered into) or the notional number of underlying equity securities; and

  • “(e) whether the derivative is cash settled or physically settled; and

  • “(f) the maturity date of the derivative (if any); and

  • “(g) the expiry date of the derivative (if any); and

  • “(h) the prices specified in the terms of the derivative (if any) (for example, the strike price of an option or the price at which a contract for difference was acquired); and

  • “(i) any other details needed to understand how the amount of the consideration payable under the derivative or the value of the derivative is affected by the value of the underlying equity securities.

“7C How to determine number of equity securities underlying derivatives

• “(1) In clauses 6 and 7, the number of equity securities that a person (A) must be treated, at a particular date, as holding or controlling, or as having acquired or disposed of, is determined as follows:

  • “(a) if the derivative gives A, in economic substance, the financial benefits of holding an ascertainable number of the equity securities for a period determined under the derivative and the derivative is a cash-settled derivative, that number of equity securities:

  • “(b) if the derivative is a cash-settled option to buy or sell an ascertainable number of equity securities at an agreed price on, or on or before, an agreed date and the derivative gives A a long position on those securities, the number that is equal to the ascertainable number of those securities multiplied by the delta of the derivative at the end of the most recent trading day:

  • “(c) in any other case for which there is a framework or methodology issued under subpart 4 of Part 9 of the Financial Markets Conduct Act 2013 in relation to regulation 132 of the Financial Markets Conduct Regulations 2014, the number calculated in accordance with that framework or methodology.

  “(2) However, if A is a derivatives issuer, the offeror, in determining the number of equity securities that A must be treated as holding or controlling, or as having acquired or disposed of, must not take account of any number to the extent that—

  • “(a) the number arises as a result of the application of clause 6(3) or 7(4) to derivatives entered into in the ordinary course of A’s derivatives-issuing business for the purpose of hedging A’s obligations under other derivatives entered into with 1 or more investors in a client-serving capacity; and

  • “(b) A and the investor or investors are not associated persons; and

  • “(c) the exemption in regulation 145 of the Financial Markets Conduct Regulations 2014 applies to A.

  “(3) Subclause (2) applies only to the extent that the offeror is aware of the matters referred to in that subclause.

  “(4) In this clause,—

  • “(a) ascertainable number, in relation to the particular date referred to in subclause (1), means a number that is specified in, is determined in accordance with, or can be ascertained on that date under the terms of the derivative:

  • “(b) associated person has the meaning set out in section 12(1) of the Financial Markets Conduct Act 2013:

  • “(c) dealing, derivatives issuer, FMA, and investor have the meanings set out in section 6(1) of the Financial Markets Conduct Act 2013:

  • “(d) financial benefit means capital, earnings, or other financial returns.

  “(5) For the purposes of subclause (1)(b),—

  • “(a) A will have a long position if, under the terms of the derivative, A may benefit if the price of the underlying equity securities increases (rather than decreases); and

  • “(b) the delta of the derivative must be calculated in accordance with accepted market practice for applying a delta calculation to determine how many equity securities a counterparty should hold at the end of the most recent trading day to hedge the counterparty’s obligations under the derivative (whether or not the counterparty chooses to hedge this way in practice).

  “(6) For the purposes of subclause (2)(a), a derivatives issuer acts in a client-serving capacity when it deals in derivatives by fulfilling orders received from an investor or responding to an investor's request to trade (rather than dealing on its own behalf).”

• “(2A) For the purposes of subclause (1) and (2), and in clause 6(3), if a person has a relevant interest in a derivative for which the underlying is 1 or more equity securities of the target company, the person must be treated as holding or controlling the number of the underlying equity securities that is determined under clause 6C.”

• “(4) For the purposes of subclauses (1)(a) and (2),—

  • “(a) if a person (A) has acquired or disposed of a relevant interest in a derivative for which the underlying is 1 or more equity securities of the target company, A must be treated as having acquired or disposed of the number of the underlying equity securities that is determined under clause 6C; and

  • “(b) A must be treated as having acquired or disposed of those underlying equity securities on the same day on which A acquires or disposes of the relevant interest in the derivative; and

  • “(c) disposed of, in relation to a relevant interest in a derivative, does not include A ceasing to have a relevant interest in a derivative because the relevant agreement has expired.

• “(5) Nothing in subclause (4) applies to subclause (1)(b).”

“6A Composition of non-derivative and derivative holdings

• “(1) This clause applies if a person (A) referred to in clause 5(1)—

  • “(a) has a relevant interest in a derivative as referred to in clause 5(2A); or

  • “(b) has, during the 6-month period referred to in clause 6(1), acquired or disposed of a relevant interest in a derivative as referred to in clause 6(4).

  “(2) If this clause applies, it applies to—

  • “(a) each statement made under clause 5(1) for A in which the number of equity securities includes a number of equity securities that A is treated as holding or controlling under clause 5(2A) (including where the number that A is treated as holding or controlling is 0); and

  • “(b) each statement made under clause 6(1)(a) for A in which the number of equity securities includes a number of equity securities that A is treated as having acquired or disposed of under clause 6(4) (including where the number that A is treated as having acquired or disposed of is 0).

  “(3) For each statement made under clause 5(1) for A, a further statement that discloses for each number of each class of equity securities of the target company held or controlled by A—

  • “(a) the number, designation, and percentage of the class of equity securities held or controlled by A before applying clause 5(2A); and

  • “(b) the number that A is treated as holding or controlling under clause 5(2A); and

  • “(c) for each derivative, the details in clause 6B.

  “(4) For each statement made under clause 6(1)(a) for A, a further statement that discloses for each total number of each class of equity securities of the target company acquired or disposed of by A—

  • “(a) the total number and the designation of the class of equity securities acquired or disposed of by A before applying clause 6(4); and

  • “(b) the total number that A is treated as having acquired or disposed of under clause 6(4); and

  • “(c) for each derivative,—

    • “(i) the date on which the derivative was entered into; and

    • “(ii) the details in clause 6B.

“6B Disclosure about derivatives

• For the purposes of clause 6A, the details of the derivative to be disclosed are—

  • “(a) the type of derivative (for example, option or swap agreement); and

  • “(b) the full names of the parties to the derivative; and

  • “(c) if the person to whom the statement relates is not a party to the derivative, the nature of the relevant interest in the derivative; and

  • “(d) the notional value of the derivative (if any) (which is the face value or the notional amount in respect of the derivative as at the date on which the relevant agreement is entered into) or the notional number of underlying equity securities; and

  • “(e) whether the derivative is cash settled or physically settled; and

  • “(f) the maturity date of the derivative (if any); and

  • “(g) the expiry date of the derivative (if any); and

  • “(h) the prices specified in the terms of the derivative (if any) (for example, the strike price of an option or the price at which a contract for difference was acquired); and

  • “(i) any other details needed to understand how the amount of the consideration payable under the derivative or the value of the derivative is affected by the value of the underlying equity securities.

“6C How to determine number of equity securities underlying derivatives

• “(1) In clauses 5, 6, and 13A, the number of equity securities that a person (A) must be treated, at a particular date, as holding or controlling, or as having acquired or disposed of, is determined as follows:

  • “(a) if the derivative gives A, in economic substance, the financial benefits of holding an ascertainable number of the equity securities for a period determined under the derivative and the derivative is a cash-settled derivative, that number of equity securities:

  • “(b) if the derivative is a cash-settled option to buy or sell an ascertainable number of equity securities at an agreed price on, or on or before, an agreed date and the derivative gives A a long position on those securities, the number that is equal to the ascertainable number of those securities multiplied by the delta of the derivative at the end of the most recent trading day:

  • “(c) in any other case for which there is a framework or methodology issued under subpart 4 of Part 9 of the Financial Markets Conduct Act 2013 in relation to regulation 132 of the Financial Markets Conduct Regulations 2014, the number calculated in accordance with that framework or methodology.

  “(2) However, if A is a derivatives issuer, the target company, in determining the number of equity securities that A must be treated as holding or controlling, or as having acquired or disposed of, must not take account of any number to the extent that—

  • “(a) the number arises as a result of the application of clause 5(2A), 6(4), or 13A(5) to derivatives entered into in the ordinary course of A’s derivatives-issuing business for the purpose of hedging A’s obligations under other derivatives entered into with 1 or more investors in a client-serving capacity; and

  • “(b) A and the investor or investors are not associated persons; and

  • “(c) the exemption in regulation 145 of the Financial Markets Conduct Regulations 2014 applies to A.

  “(3) Subclause (2) applies only to the extent that the target company is aware of the matters referred to in that subclause.

  “(4) In this clause,—

  • “(a) ascertainable number, in relation to the particular date referred to in subclause (1), means a number that is specified in, is determined in accordance with, or can be ascertained on that date under the terms of the derivative:

  • “(b) associated person has the meaning set out in section 12(1) of the Financial Markets Conduct Act 2013:

  • “(c) dealing, derivatives issuer, FMA, and investor have the meanings set out in section 6(1) of the Financial Markets Conduct Act 2013:

  • “(d) financial benefit means capital, earnings, or other financial returns.

  “(5) For the purposes of subclause (1)(b),—

  • “(a) A will have a long position if, under the terms of the derivative, A may benefit if the price of the underlying equity securities increases (rather than decreases); and

  • “(b) the delta of the derivative must be calculated in accordance with accepted market practice for applying a delta calculation to determine how many equity securities a counterparty should hold at the end of the most recent trading day to hedge the counterparty’s obligations under the derivative (whether or not the counterparty chooses to hedge this way in practice).

  “(6) For the purposes of subclause (2)(a), a derivatives issuer acts in a client-serving capacity when it deals in derivatives by fulfilling orders received from an investor or responding to an investor's request to trade (rather than dealing on its own behalf).”

• “(5) For the purposes of subclause (1), if a person has a relevant interest in a derivative for which the underlying is 1 or more equity securities of the target company, the person must be treated as holding or controlling the number of the underlying equity securities that is determined under clause 6C.”

• “(a) if any voting securities of the target company are quoted on a licensed market, the annual report and financial statements (including the auditor's report on those financial statements) that the target company is required by the licensed market operator to send or make available to the target company's equity security holders; or”.

• “(a) if any voting securities of the target company are quoted on a licensed market, the half-yearly report and half-yearly financial statements (including the auditor's report on such financial statements, if any) that the issuer is required by the rules of the licensed market to send or make available to equity security holders of the issuer; or”.