On 6 May this year, the Securities and Exchange Commission (SEC) proposed significant changes to its cross-border M&A rules, aiming to expand and enhance their usefulness. The rules, first adopted in 1999, provide relief from the US tender offer and registration requirements that would otherwise apply to takeovers of non-US public companies with US shareholders, whether or not such companies have a US listing. They encourage bidders to include US shareholders in bids for non-US companies, while providing US shareholders with the protections of the US federal securities laws where necessary.
The amendments now being proposed reflect experience gained by the SEC since adoption of the rules and acknowledge the increased globalisation of the world’s capital markets. They follow recent and welcomed rule-making initiatives by the SEC that affect non-US companies, in particular the amendments to the de-registration rules for leaving the US regulatory system and the accommodation of financial statements prepared in accordance with international financial reporting standards, without reconciliation to the US’s Generally Accepted Accounting Principles (GAAP).
