Connected fund managers and connected principal traders
A fund manager or principal trader will be “connected with” an offeror or an offeree company if it is controlled by, controls or is under the same control as (i) that offeror or offeree company (or any person acting in concert with either of them) or (ii) a connected adviser to any such person.
A connected fund manager or connected principal trader will be presumed to be acting in concert with the offeror or offeree company with which it is connected, such that dealings in relevant securities by the connected fund manager or connected principal trader may have consequences under the Takeover Code for that offeror or offeree company.
Exempt fund managers and exempt principal traders
Fund managers and principal traders may be granted exempt status by the Panel if they are able to demonstrate their independence from their group’s corporate advisory and corporate broking operations. If a connected fund manager or connected principal trader has exempt status, and that exempt status is relevant during an offer (because the sole reason that the fund manager or principal trader is “connected” is that it is a member of the same group as a connected adviser to an offeror, the offeree company or a person acting in concert with either of them), the exempt fund manager or exempt principal trader will not be presumed to be acting in concert with the offeror or offeree company with which it is connected. Accordingly, the fund manager or principal trader will continue to be able to deal in relevant securities during the course of the offer without those dealings having consequences under the Takeover Code for the offeror or the offeree company (as appropriate).
Special exempt status
A fund manager based overseas may be granted special exempt status, subject to the satisfaction of certain conditions. In summary, UK funds under the fund manager’s management must not exceed £50m and should represent no more than 10% of the total funds under management.
Ad hoc exempt status
A fund manager or principal trader may be granted exempt status (but not special exempt status) in relation to a particular offer on an ad hoc basis, subject to the satisfaction of certain conditions.
Review and charges
The Panel carries out periodic reviews of all groups which benefit from exempt fund manager or exempt principal trader status. Exempt fund managers are reviewed every two years and exempt principal traders are reviewed annually.
A charge of £6,000 for each exempt entity is payable at the time of review. No charge is payable in relation to special or ad hoc exempt status.
Recognised intermediary status
In summary, if a trading desk has recognised intermediary status and is acting in a client-serving capacity:
- for the purpose of Rule 9.1 (When a mandatory offer is required and who is primarily responsible for making it), it will not be treated as interested in any securities by virtue of any option or derivative position in those securities; and
- any dealings by it in relevant securities during an offer period will not be required to be publicly disclosed under Rules 8.3(a) to (d) of the Takeover Code.
Review and charges
The Panel carries out annual reviews of all groups which benefit from recognised intermediary status.
A charge of £6,000 for each entity which benefits from recognised intermediary status is payable at the time of review.
For further information on exempt status or recognised intermediary status, please contact the Exempt Groups Unit at firstname.lastname@example.org.